TG Therapeutics, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; comparisons are with Q1 2023 unless otherwise noted. TG Therapeutics is a commercial-stage biopharmaceutical company. BRIUMVI (ublituximab-xiiy), its marketed treatment for relapsing forms of multiple sclerosis (RMS), is approved in the U.S., EU and UK. The company also has early-stage pipeline programs.
Financial performance
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Total revenue | $63.5 million | $7.8 million |
| BRIUMVI product revenue, net | $50.5 million | $7.8 million |
| License, milestone, royalty and other revenue | $13.0 million | Less than $0.1 million |
| Operating loss | $9.3 million | $37.0 million loss |
| Net loss | $10.7 million; $0.07 per share | $39.2 million loss; $0.28 per share |
| Operating cash flow | $8.2 million used | $59.9 million used |
| Cash, cash equivalents and restricted cash at quarter-end | $76.8 million | $62.7 million at March 31, 2023 |
Q1 2024 license and related revenue included a $12.5 million Neuraxpharm milestone for BRIUMVI’s first key-market commercial launch in the EU. Product revenue growth reflected increased U.S. shipments and market penetration. Higher revenue narrowed the operating and net losses despite increased expenses.
Costs, liquidity and debt
- Cost of revenue was $5.4 million, including BRIUMVI manufacturing, distribution, overhead and royalties. Management cautioned that reported product gross margin benefits from pre-approval inventory costs previously expensed as R&D; it expects to use remaining pre-commercialization inventory through Q1 2025, after which product gross margin is anticipated to decrease modestly.
- R&D expense rose to $32.7 million from $15.9 million, primarily due to the Precision license agreement and manufacturing costs. Selling, general and administrative expense increased to $34.6 million from $28.1 million, mainly reflecting commercialization-related costs and personnel.
- At March 31, 2024, current assets were $360.6 million and current liabilities were $99.7 million. Cash and cash equivalents were $75.5 million; short-term investment securities were $134.3 million and long-term securities were $1.3 million. The company separately reported $209.8 million in cash, cash equivalents and investment securities.
- Inventory increased to $77.7 million from $39.8 million at year-end, primarily to support forecast sales, safety stock and supply commitments to Neuraxpharm. It consisted of BRIUMVI inventory; management reported no reserve for excess or obsolete inventory was required.
- Operating cash use declined year over year, partly reflecting the lower net loss and a $40.2 million increase in accounts payable and accrued expenses; inventory and accounts receivable also absorbed cash. Investing activities used $9.3 million, largely reflecting investment-security purchases. Financing provided $0.01 million; the prior-year period included a $25.0 million loan advance.
- Hercules loan principal was $95.0 million; its carrying amount was $101.3 million, including the accrued final payment fee and net of unamortized debt issuance costs. The loan matures January 2026, with interest-only payments through August 2025 subject to extension conditions. The company reported compliance with its financial covenants at quarter-end.
Changes, outlook and risks
- In January 2024, TG licensed Precision BioSciences’ azer-cel program for autoimmune and other non-oncology indications. The agreement included a $7.5 million upfront payment, partly in cash and partly in Precision shares, plus potential future payments and royalties. TG said it expected to commence an autoimmune-disease trial in 2024.
- Neuraxpharm launched BRIUMVI commercially in Germany in February 2024, with additional EU markets expected to follow. TG received the $12.5 million launch milestone and may receive up to $492.5 million in additional milestones plus tiered royalties of up to 30% under the agreement.
- Management expects near-term operating losses and says profitability is uncertain. It believes existing cash, cash equivalents and investments, together with projected U.S. and ex-U.S. BRIUMVI revenue, will fund anticipated operating cash needs for at least 12 months following the filing date. No specific revenue guidance is provided in the filing text.
- Key risks include BRIUMVI market acceptance, reimbursement and competition; product safety and post-approval obligations; reliance on third-party manufacturing and supply; clinical and regulatory uncertainty for pipeline candidates; and the possibility that future financing may be needed. The company reported no material pending legal proceedings and no material change in market-risk exposure.
Investor verification priorities
- Track BRIUMVI prescriptions, net sales, reimbursement access and launch progress in Germany and other EU markets; distinguish recurring product revenue from milestone revenue.
- Monitor inventory levels, sales forecasts, supply commitments and the expected post-Q1 2025 gross-margin normalization, including any inventory write-downs.
- Reconcile cash, investment balances and operating cash use over subsequent quarters; assess the stated 12-month liquidity outlook against commercialization and development spending.
- Review Hercules debt terms, interest and payment obligations, covenant headroom and any need for additional financing or equity issuance.
- Verify azer-cel trial timing and progress, and the clinical, regulatory and commercial milestones that could trigger additional Precision payments.