TG Therapeutics, Inc. — Q3 2022 Form 10-Q
Business context and reporting period. This unaudited quarterly report covers the three and nine months ended September 30, 2022. TG Therapeutics is a biopharmaceutical company developing treatments for B-cell diseases. Its principal near-term regulatory focus was ublituximab for relapsing forms of multiple sclerosis (RMS); it reported no marketed products after UKONIQ was withdrawn.
Financial results and position
| Metric | Three months ended September 30, 2022 | Nine months ended September 30, 2022 |
|---|---|---|
| Total revenue | $94,000 | $2.7 million |
| Operating loss | $35.0 million | $140.8 million |
| Net loss | $35.8 million | $145.3 million |
| Basic and diluted loss per share | $0.26 | $1.08 |
| Cash used in operating activities | Not presented separately for the quarter | $152.3 million |
- Q3 revenue included $56,000 of product revenue, consisting of adjustments to prior-period UKONIQ sales estimates, and $38,000 of license revenue. Nine-month product revenue was $2.6 million; license revenue was $114,000.
- Q3 research and development expense was $20.8 million and selling, general and administrative expense was $14.3 million. For the nine months, these were $95.7 million and $47.5 million, respectively. The filing does not provide a meaningful ongoing product margin given the withdrawal of UKONIQ and minimal current revenue.
- At September 30, cash and cash equivalents were $109.9 million, with investment securities of $87.8 million, for $197.7 million combined. Restricted cash was an additional $1.3 million. Total current assets were $182.9 million and current liabilities were $36.4 million.
- Loan payable was $70.0 million in principal; the reported carrying amount was $70.0 million after accrued final-payment liability and unamortized issuance costs. The Hercules facility matures January 2026; cash interest is the greater of prime plus 2.15% or 5.40%, with 3.45% paid-in-kind interest. Interest-only payments run to February 2025, potentially extendable to August 2025 subject to milestones.
Material changes versus the prior comparable period
- Compared with Q3 2021, revenue fell from $2.0 million to $94,000 and net loss narrowed from $85.6 million to $35.8 million. Lower R&D and SG&A spending—partly reflecting lower clinical, consulting, marketing and compensation costs—drove much of the reduction.
- For the first nine months, revenue declined from $4.4 million to $2.7 million, while net loss narrowed from $254.8 million to $145.3 million. Operating cash use decreased from $208.7 million to $152.3 million.
- Cash, cash equivalents and restricted cash fell by $189.0 million from the beginning of 2022. Investment purchases increased investing cash outflow; the company said operating cash use declined largely because of higher license milestone and clinical-trial spending in 2021.
- Equity declined to $100.5 million from $237.2 million at December 31, 2021. The company issued no shares through its active at-the-market program during the nine months; it had an active shelf and ATM available for potential future financing.
Outlook, commentary, risks and unusual items
- The FDA’s PDUFA goal date for the ublituximab RMS application was extended to December 28, 2022, after a company submission was treated as a major amendment. The filing does not report the eventual FDA decision.
- Management stated that September 30 cash and investments were expected to fund operations for more than 12 months from the filing date. It also expects continued operating losses and says significant future financing will be needed for long-term operations; additional financing may be unavailable or dilutive.
- Following updated UNITY-CLL overall-survival data showing an imbalance potentially favoring the control arm, the company withdrew the U2 CLL/SLL applications and voluntarily withdrew UKONIQ. FDA approval of UKONIQ was formally withdrawn effective May 31, 2022. The company paused or closed several oncology programs and was reassessing others.
- Q3 spending comparisons were affected by substantially higher 2021 costs associated with the ublituximab RMS BLA submission, manufacturing and clinical trials, as well as UKONIQ marketing. In 2022, the company also expensed advanced UKONIQ manufacturing payments following withdrawal; it reported a $7.1 million increase in manufacturing expense for the nine-month period related primarily to this one-time charge.
- Key risks include regulatory uncertainty, clinical and commercial manufacturing and supply reliance on third parties, market acceptance and launch execution for ublituximab, debt covenants and service costs, and potential dilution or limited access to capital. The company reported a partial FDA clinical hold on UKONIQ and ublituximab trials in CLL/NHL.
- A putative securities class action filed in July 2022 alleges misleading statements concerning ublituximab and umbralisib; the company intends to contest the claims. The case was described as being in its early stages.
- Management concluded disclosure controls were effective as of September 30, 2022, and reported no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- The FDA’s decision and any subsequent commercial launch timing, costs and requirements for ublituximab in RMS.
- Actual cash burn, committed manufacturing and commercialization spending, and whether management’s stated liquidity runway remains achievable.
- Hercules facility cash requirements, minimum-cash and other covenant compliance, and access to any undrawn loan capacity or additional financing.
- Progress and decisions on the oncology pipeline following UKONIQ’s withdrawal and the U2 survival-data concerns.
- Developments in the securities class action, and any potential financial or operational effects.