TG Therapeutics, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; filed February 29, 2024. This is an annual report, not a standalone fourth-quarter report. TG Therapeutics is a commercial-stage biopharmaceutical company focused on B-cell-mediated diseases. BRIUMVI (ublituximab) was its only marketed product.
Financial performance and position
| Metric | FY2023 | FY2022 |
|---|---|---|
| Total revenue | $233.7 million | $2.8 million |
| BRIUMVI net product revenue | $92.0 million | — |
| License, milestone and other revenue | $141.7 million | $0.2 million |
| Operating income (loss) | $20.6 million | $(192.8) million |
| Net income (loss) | $12.7 million | $(198.3) million |
| Research and development expense | $76.2 million | $125.4 million |
| Selling, general and administrative expense | $122.7 million | $70.0 million |
- The $140.0 million non-refundable Neuraxpharm upfront payment, recognized as license revenue in 2023, was the principal driver of reported profitability. Management expects operating losses to continue in the near term and cautions that profitability is not assured.
- Cash and cash equivalents were $92.9 million; short-term investment securities were $124.6 million. Together, cash, cash equivalents and investments totaled about $217.5 million at year-end. Management said these resources plus projected BRIUMVI revenue were expected to fund operations for more than 12 months from the filing date.
- Operating cash use was $31.4 million, versus $176.2 million in 2022; investing cash use was $50.7 million; financing provided $72.7 million. The lower operating cash use was primarily associated with the Neuraxpharm upfront payment. Year-end accounts receivable was $51.1 million and inventory was $39.8 million.
- Loan payable, net, was $100.1 million, all classified as non-current. The Hercules facility has a stated maturity of January 2026, paid-in-kind interest, final-payment fees, restrictive covenants and collateral over substantially all assets other than intellectual property. TG reported compliance with financial covenants at year-end.
- Current assets were $317.9 million and current liabilities $53.7 million. Accumulated deficit was $1.5 billion. The filing does not provide a standalone product gross margin; reported cost of revenue was $14.1 million, and some BRIUMVI manufacturing costs for units sold had been expensed before approval.
Material changes and business developments
- BRIUMVI launched in the U.S. in January 2023 following FDA approval in December 2022. Its U.S. net product revenue was $88.8 million; international product revenue was $3.2 million, reflecting shipments to Neuraxpharm beginning in November.
- The European Commission approved BRIUMVI in June 2023 and the UK regulator approved it in November 2023. Neuraxpharm launched in Germany on February 26, 2024; TG said it would receive a $12.5 million first-EU-launch milestone.
- The July 2023 Neuraxpharm agreement granted commercialization rights in specified territories outside the U.S., Canada and Mexico, subject to existing Asian partnerships. TG received $140.0 million upfront and is eligible for up to $505.0 million in milestones, plus tiered double-digit royalties of up to 30% on net sales. Milestones and royalties are contingent; none were recognized in 2023.
- R&D expense declined from 2022, primarily due to lower manufacturing, milestone and clinical-trial costs. SG&A rose with BRIUMVI launch and commercialization activity and higher stock-based compensation. TG sold 1.386 million shares through its ATM program in 2023, receiving $46.3 million net.
Outlook, risks and unusual items
- No specific revenue or earnings guidance is provided in the supplied filing text. Management expects near-term operating losses and identifies commercialization of BRIUMVI, clinical development spending and licensing activity as important cash requirements.
- BRIUMVI’s commercial performance depends on uptake, reimbursement, pricing, competition and continued adequate supply. Post-approval safety studies and other regulatory commitments may affect costs, labeling or use.
- TG relies on contract manufacturers, including Samsung Biologics for BRIUMVI, and warns of single-source supply, manufacturing-quality and interruption risks. The company has no manufacturing facilities of its own.
- Pipeline programs TG-1701 and TG-1801 remained in Phase 1. In January 2024, TG licensed azer-cel for autoimmune and other non-oncology indications, with a planned 2024 trial; the agreement includes upfront and potential milestone payments, including up to $288 million in additional milestones, plus royalties.
- Other key risks include competition in MS, regulatory and clinical uncertainty, drug-pricing and reimbursement changes, intellectual-property disputes, third-party partner performance, debt and financing needs, and cybersecurity threats. TG reported no material pending legal proceedings and said cybersecurity events had not materially affected it.
- KPMG issued unqualified opinions on the financial statements and internal control over financial reporting. The audit identified revenue accounting for Neuraxpharm’s optional product-purchase terms as a critical audit matter, focusing on whether the terms conveyed a material right.
Investor facts to verify
- How much of future revenue and cash generation comes from recurring BRIUMVI sales versus the one-time $140 million license payment and contingent partner milestones?
- Whether U.S. launch growth, access and reimbursement support the company’s commercial expectations, and whether the European rollout produces the expected milestone and royalties.
- BRIUMVI net pricing, rebates and other gross-to-net adjustments, customer collections, inventory usage and the expected increase in cost of revenue as pre-approval inventory is depleted.
- Outstanding Hercules principal, interest and fees, remaining borrowing availability, covenant thresholds and repayment requirements.
- Funding needs and execution milestones for azer-cel, TG-1701 and TG-1801, including the timing and cost of clinical programs and potential dilution from future equity issuance.