TG Therapeutics, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023. Amounts below are in U.S. dollars; financial statement figures are unaudited. TG is a commercial-stage biopharmaceutical company focused on B-cell diseases. BRIUMVI, its treatment for relapsing forms of multiple sclerosis (RMS), launched in the U.S. in January 2023 and received European Commission approval in June 2023. TG’s other lead candidates, TG-1701 and TG-1801, were in Phase 1.
Financial results and position
| Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Total revenue | $16.1 million | $0.6 million | $23.9 million | $2.6 million |
| Net product revenue | $16.0 million | $0.6 million | $23.8 million | $2.5 million |
| Cost of product revenue | $1.9 million | $0.02 million | $2.8 million | $0.3 million |
| Operating loss | $44.7 million | $38.9 million | $81.7 million | $105.8 million |
| Net loss | $47.6 million | $40.5 million | $86.8 million | $109.5 million |
| Net loss per share, basic and diluted | $(0.34) | $(0.30) | $(0.62) | $(0.81) |
| Operating cash flow | Not separately stated for the quarter | $(101.9) million | $(117.8) million |
- Revenue and margins: 2023 product revenue was from U.S. BRIUMVI sales. The prior-year comparison reflects UKONIQ, withdrawn from the U.S. market in May 2022. The filing does not provide a clear reported gross-margin figure. TG notes that some BRIUMVI manufacturing costs had been expensed to R&D before approval, so they are not included in current product cost; it expects product costs to rise as this inventory is depleted.
- Expenses: Q2 total costs and expenses were $60.7 million, up from $39.5 million; H1 expenses were $105.5 million, down from $108.4 million. H1 R&D declined to $44.0 million from $74.9 million, primarily due to lower manufacturing and clinical-trial spending. H1 SG&A rose to $58.8 million from $33.2 million, reflecting commercialization costs and higher noncash compensation.
- Cash and liquidity at June 30: Cash and cash equivalents were $97.0 million and short-term investments $47.9 million, totaling $144.9 million; restricted cash was a further $1.3 million. Current assets were $208.6 million and current liabilities $72.7 million. Management expected available resources, the subsequent Neuraxpharm upfront payment and projected BRIUMVI sales to fund operations for more than 12 months from the filing date.
- Debt and equity: Hercules loan principal was $95.0 million; its balance-sheet carrying amount was $97.7 million, net of unamortized issuance costs and including the accreted final payment fee. The facility matures in January 2026. Stockholders’ equity was $40.5 million, with an accumulated deficit of $1.614 billion. TG raised $46.3 million net through its ATM equity program in H1.
- Cash flow: H1 investing activities provided $24.3 million, primarily reflecting investment maturities and reduced securities purchases. Financing activities provided $72.3 million, including $25.0 million of Hercules borrowing and $46.3 million of ATM proceeds. Cash, cash equivalents and restricted cash declined $5.3 million during H1.
Material changes and notable items
- BRIUMVI’s U.S. launch drove product revenue to $23.8 million in H1, compared with UKONIQ sales of $2.5 million in H1 2022. Q2 net loss increased year over year, while the H1 net loss narrowed, principally alongside reduced R&D spending and different stock-compensation expense.
- In March 2023, TG amended its Hercules facility and drew $25.0 million. The amendment set cash interest at the greater of prime plus 1.20% or 8.95%, with 2.25% paid-in-kind interest; interest-only payments extend through August 2025, subject to terms. Additional advances are available subject to milestones and facility conditions. The loan is secured by substantially all assets other than intellectual property and includes restrictive covenants.
- In July 2023, TG entered an ex-U.S. BRIUMVI commercialization agreement with Neuraxpharm, retaining the U.S., Canada and Mexico and excluding certain previously partnered Asian countries. TG received a nonrefundable $140.0 million upfront payment and may receive $12.5 million on the first key EU launch and up to $492.5 million in further launch and commercial milestones, plus tiered royalties of up to 30% of net sales.
Outlook, risks and contingencies
TG did not provide a numerical revenue or earnings forecast in the supplied filing text. Management cautioned that it expects operating losses to continue and may never achieve profitability. Its stated liquidity assessment depends on commercialization of BRIUMVI, projected U.S. and ex-U.S. sales, and the July 2023 upfront payment; the company also said future financing may be needed. The filing reports no material pending legal proceedings and states that disclosure controls were effective as of June 30, 2023.
- Commercial execution remains uncertain: BRIUMVI is TG’s only marketed product, and adoption, reimbursement, pricing, competition and market access may fall short of expectations.
- Manufacturing and supply rely on a limited number of third parties, including Samsung Biologics; interruptions, quality issues or minimum-purchase obligations could affect supply and costs.
- Regulatory approval maintenance and post-marketing obligations, potential adverse effects, and the progress and outcomes of clinical trials remain risks.
- Debt service, covenants, continued cash burn and potential future financing create liquidity and dilution risks. Commercialization milestones and royalties under the Neuraxpharm agreement depend on launch and sales performance.
- Other disclosed risks include drug-pricing and reimbursement changes, intellectual-property disputes, third-party and licensing dependence, cybersecurity, and possible impacts of COVID-19 or geopolitical disruption.
Investor verification priorities
- Track BRIUMVI prescription demand, payer coverage, net pricing, gross-to-net deductions and repeat sales; verify how reported revenue develops after launch.
- Monitor product cost and inventory: TG reported $30.2 million of BRIUMVI inventory at June 30 and expects cost of product revenue to rise as pre-commercialization inventory is used, which it expected to continue through 2024.
- Confirm receipt and use of the $140.0 million Neuraxpharm payment, and track EU launch timing, milestone conditions and royalty-generating sales.
- Reassess cash burn and runway against the H1 operating cash use of $101.9 million, debt obligations, commercialization spending and any additional financing.
- Review Hercules facility covenants, remaining borrowing availability, interest terms and any effect on financing flexibility or dilution.
- Assess progress and safety data for TG-1701 and TG-1801, as well as BRIUMVI post-approval commitments and supply reliability.