TG Therapeutics, Inc. — Q3 2021 Form 10-Q
Reporting period: Three and nine months ended September 30, 2021. The company is a commercial-stage biopharmaceutical business focused on B-cell malignancies and autoimmune diseases. Its first marketed product, UKONIQ (umbralisib), received FDA accelerated approval in February 2021 for certain relapsed or refractory MZL and FL patients; U.S. sales began that month.
Financial performance and position
Amounts are in millions of dollars, except per-share data.
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Total revenue | $2.03 | $0.04 | $4.37 | $0.11 |
| Net product revenue | $1.99 | — | $4.25 | — |
| Operating loss | $(85.13) | $(85.72) | $(251.82) | $(186.81) |
| Net loss | $(85.64) | $(87.16) | $(254.76) | $(191.16) |
| Basic and diluted loss per share | $(0.65) | $(0.73) | $(1.93) | $(1.70) |
| Operating cash used | Not separately stated | Not separately stated | $(208.73) | $(162.48) |
- Q3 total expenses were $87.16 million, including $51.97 million of R&D and $34.90 million of SG&A. Product cost was $0.29 million. The resulting reported product gross margin is not representative of ongoing manufacturing economics: costs to manufacture the UKONIQ units sold had been expensed before approval.
- For the first nine months, total expenses were $256.19 million, including $159.93 million of R&D and $95.68 million of SG&A. The company attributed higher R&D spending to late-stage development, manufacturing, BLA-related consulting and license milestones; higher noncash R&D compensation also contributed. SG&A rose with UKONIQ commercialization and preparations for potential launches.
- At September 30, cash and cash equivalents were $326.51 million; short- and long-term investment securities totaled $54.89 million. Combined cash and investments were approximately $381.4 million. Current assets were $371.78 million against current liabilities of $87.66 million.
- Operating cash use increased by $46.24 million year over year. Cash, cash equivalents and restricted cash declined $226.92 million over the nine-month period to $327.78 million.
- Recorded loan payable was $16.00 million, all current, after $14.59 million of principal payments. The Hercules term loan matures March 1, 2022, with monthly principal payments through maturity. Lease liabilities totaled $11.49 million. Total liabilities were $98.17 million.
Changes, outlook and risks
- UKONIQ generated $1.99 million in Q3 net product revenue and $4.25 million for the first nine months; there were no product sales in the comparable 2020 periods. Nine-month revenue also included $0.11 million of license revenue.
- Q3 net loss narrowed by $1.53 million versus 2020, while the nine-month net loss widened by $63.60 million. Nine-month operating cash use also increased. The company reported $46.92 million of stock-based compensation for the nine months, broadly level with the prior-year $46.77 million.
- Management said cash and investments at September 30 were expected to fund operations for more than 12 months from the filing date, but also stated that significant future financing would be needed and that losses were expected to continue. No specific revenue or earnings guidance is provided in the supplied filing text.
- The company expected SG&A to rise through the remainder of 2021 as it prepared for potential 2022 launches. It expected to use remaining pre-commercialization UKONIQ inventory for sales through Q2 2022; product costs could rise relative to revenue as that inventory is depleted.
- The FDA accepted the BLA and supplemental NDA for ublituximab plus UKONIQ (U2) for CLL/SLL, with a March 25, 2022 PDUFA goal date. A BLA for ublituximab in relapsing forms of multiple sclerosis was submitted in September 2021. Management reported that the ULTIMATE I and II trials met their primary endpoint; approval and commercialization remained uncertain.
- UKONIQ’s MZL and FL approvals are accelerated approvals contingent on confirmatory evidence of clinical benefit. Other key risks include acceptance and reimbursement of UKONIQ, competition, clinical and regulatory outcomes, manufacturing and supply dependence, COVID-19-related disruption, continued cash burn, and the need for additional financing. Management reported no material pending legal proceedings and effective disclosure controls.
Important facts for investors to verify
- UKONIQ sales trajectory, gross-to-net deductions, channel inventory and the timing of transition to inventory with capitalized manufacturing costs.
- Progress and FDA decisions on the CLL/SLL applications and the RMS BLA, including any regulatory review or manufacturing requirements.
- Confirmatory-trial progress and post-marketing obligations supporting UKONIQ’s accelerated approvals.
- Cash burn, updated runway assumptions, financing plans and dilution risk; management’s runway estimate is not a guarantee of future liquidity.
- Repayment of the Hercules loan by its March 2022 maturity and any changes to debt or covenant compliance.