TG Therapeutics, Inc. — 2015 Form 10-K
Reporting period: Fiscal year ended December 31, 2015. This is an annual filing; quarterly figures below are included only where the filing reports them. The company is a clinical-stage biopharmaceutical developer, with no approved products and no product sales.
Business context and pipeline
Lead clinical programs target B-cell hematologic malignancies: TG-1101 (ublituximab), an anti-CD20 antibody, and TGR-1202, an oral PI3K-delta inhibitor. IRAK4 inhibitors and anti-PD-L1/anti-GITR antibodies remained preclinical. The company reported Phase 3 studies of TG-1101 plus ibrutinib (GENUINE) and TG-1101 plus TGR-1202 (UNITY-CLL), both conducted under FDA Special Protocol Assessments.
Financial performance and liquidity
| Metric | 2015 | 2014 |
|---|---|---|
| License revenue | $0.152 million | $0.152 million |
| Total costs and expenses | $63.33 million | $55.87 million |
| Operating loss | $63.18 million | $55.72 million |
| Net loss | $62.95 million | $55.78 million |
| Basic and diluted loss per share | $1.38 | $1.64 |
| Cash used in operating activities | $44.69 million | $35.06 million |
| Cash, investments and interest receivable at year-end | $102.42 million | $78.86 million |
- 2015 R&D expense was $47.71 million, including $43.45 million excluding noncash compensation; G&A was $15.63 million. The filing attributes increased R&D principally to TG-1101 and TGR-1202 manufacturing and clinical trial costs.
- Net cash provided by financing was $68.72 million, chiefly from the ATM program and warrant exercises. The ATM issued 4.09 million shares for about $68.2 million gross proceeds. Shares issued rose from 44.97 million at year-end 2014 to 54.10 million at year-end 2015.
- Year-end assets were $113.47 million, liabilities $11.90 million and stockholders’ equity $101.57 million. Notes payable were carried at $0.212 million; separately, the filing reports approximately $19.9 million of cumulative principal and accrued interest on the 5% notes, with no payments made. The notes matured in March 2015 and the company describes its obligations as limited to specified product cash flows and a conversion feature.
- Management said available cash and investments were expected to fund anticipated operating requirements for more than 24 months from December 31, 2015. This is an estimate dependent on trial timing and other assumptions; the company expects further financing will be needed beyond that period.
- Operating lease commitments totaled $16.34 million through 2031. The filing reported no material off-balance-sheet arrangements.
Material changes and notable items
- Net loss increased about 13% year over year as total expenses rose; operating cash use also increased. Loss per share narrowed from $1.64 to $1.38, while weighted-average shares increased materially.
- R&D excluding noncash compensation increased from $26.00 million to $43.45 million. The company expected further increases in 2016 as Phase 3 enrollment expanded and launch preparation proceeded; it expected modestly higher other G&A.
- Quarterly unaudited net loss was $17.61 million in Q4 2015, versus $18.80 million in Q4 2014; Q4 2015 loss per share was $0.37 versus $0.48.
- Management reported effective disclosure controls and internal control over financial reporting; the auditor expressed unqualified opinions on the financial statements and internal controls.
Outlook, risks and contingencies
- Company estimates for Phase 3 milestones: GENUINE Part I/ORR endpoint targeted for 2017 with estimated remaining cost of about $10 million; UNITY-CLL relevant portion targeted for 2018 with estimated cost of about $15 million. These are management estimates, not guaranteed completion dates or total program costs.
- Preliminary clinical reports described responses and tolerability in small or interim study populations. These results do not establish efficacy or safety in larger trials; the filing highlights risks of trial failure, adverse events, enrollment delays, regulatory rejection and combination-drug toxicity. In the obinutuzumab/chlorambucil combination, reported adverse events included elevated rates of neutropenia, thrombocytopenia and transaminase elevations.
- The company had no commercial infrastructure or internal manufacturing capability and relied on third parties, including single-source manufacturers. Supply interruptions, scale-up, quality or comparability issues could delay development or commercialization.
- Further capital is a key dependency. Future equity financing could dilute shareholders; the company also cited competition, reimbursement and pricing uncertainty, patent challenges, and dependence on licensors and collaborators.
- Related-party matters include arrangements with Fortress/Checkpoint and Opus, entities connected to Executive Chairman and Interim CEO Michael Weiss; the filing describes collaboration payments, shared services, office arrangements and potential royalties. Review the terms and governance around these arrangements.
Most important facts for investors to verify
- Current cash runway and actual burn relative to management’s “more than 24 months” estimate, including expected Phase 3 and manufacturing spending.
- Latest GENUINE and UNITY-CLL enrollment, interim/final results, safety data, and regulatory status; confirm how the SPAs affect—but do not guarantee—approval.
- Reconciliation of the $0.212 million carrying value of the matured 5% notes with the approximately $19.9 million cumulative obligation disclosed, including conversion and cash-flow provisions.
- Share dilution from ATM sales, warrants, restricted stock and future financing; compare current shares outstanding with the 54.10 million reported at year-end 2015.
- Manufacturing capacity and backup-supplier readiness, material changes in product formulation, and the financial and governance terms of related-party agreements.