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TG Therapeutics, Inc. (NASDAQ:TGTX) is a good speculative biotech play to look into. The reason why I state that is because 2023 for it has been off to a good start. That’s because not only has it been able to achieve FDA approval of BRIUMVI for the treatment of patients with relapsing forms of multiple sclerosis [RMS], but it has also been able to receive regulatory approval for the European territories for it as well.
Having said that, despite TG Therapeutics only having two months of sales of BRIUMVI, it was able to report net product revenues of $7.8 million. This is not the only reason why I believe that investors should look into this biotech. This biotech has two other drugs in its pipeline, both of which that are being explored in phase 1 studies, that might provide additional upside value potential.
That’s because, with respect to TG-1801, it is a bispecific monoclonal antibody which targets the “CD47 don’t eat me” signal from other biotechs that have been bought out like Trillium Therapeutics/Forty Seven Inc. [Both acquired by Pfizer and Gilead Sciences, respectively], plus the targeting of CD19. CD19 has demonstrated to be an effective target for B-cell lymphomas. When looking at TG-1701, this could be another drug with blockbuster potential. That’s because it is a BTK inhibitor, which is another effective drug which has demonstrated the ability to target B-cell lymphomas. With FDA/EMA approvals of BRIUMVI under its belt, plus the ability to advance two other highly sought out drugs, these are the reasons why I believe that TG Therapeutics is a good speculative biotech play to look into.
BRIUMVI Is Off To A Great Start For 2023
One of the main reasons why I believe TG Therapeutics is a good speculative biotech is, because investors might be able to get in at a good price level. I state this because sales of BRIUMVI have just kicked off with only a partial quarter. BRIUMVI was approved by the FDA for the treatment of relapsing forms of multiple sclerosis [RMS] on December 22, 2022. FDA approval was given on the basis of positive results from two phase 3 studies known as ULTIMATE I and ULTIMATE II. In both of these studies, BRIUMVI was able to demonstrate superiority over teriflunomide in being able to significantly reduce the annualized relapse rate [ARR], which was the primary endpoint of the study. This was an important study, because BRIUMVI was tested against an already FDA-approved drug for relapsing forms of multiple sclerosis, known as teriflunomide [marketed by Sanofi (SNY) as AUBAGIO].
A possible competitive advantage for BRIUMVI over other RMS drugs is how it is given to patients. In that, it can be given to patients in a 1-hour infusion twice-a-year following the starting dose. It remains to be seen how much of a competitive advantage this is, but at least this biotech has something it can differentiate its drug with compared to other available RMS drugs.
As I noted directly above in the beginning, sales of BRIUMVI are off to a good start. Sales of this drug, in the most recently reported Q1 of 2023, reached $7.8 million. There are two key reasons why sales of this RMS drug are off to a good start. First of all, it exceeded what the company was predicting in terms of net product revenues expected. Secondly, it was only a partial quarter of sales. That’s because the U.S. launch of BRIUMVI didn’t happen until January 26, 2023.
On top of all this, it had made other progress to improve upon sales in the coming year. For instance, TG Therapeutics was able to get payor coverage policies in place for over 50% of covered lives across the United States. Secondly, it received notification that the U.S. Centers for Medicare & Medicaid Services [CMS] had issued a permanent J-Code [J2329] for BRIUMVI, which became effective July 1, 2023. The final positive development for this biotech, as it relates to BRIUMVI, is that it was able to receive European approval of BRIUMVI for the treatment of relapsing forms of multiple sclerosis. While the launch of this drug for this patient population for the European Union [EU] is not expected until later in 2023, this adds an additional positive advancement as it relates to building net product revenues for it in the coming years.
Financials
As I stated directly above, Q1 2023 sales of BRIUMVI reached $7.8 million. TG Therapeutics is in good shape, because of the indication it is going after. It is expected that the global multiple sclerosis market is expected to reach $26.1 billion by 2029. However, if you are just only looking at the targeting of RMS, it is still a good market opportunity for it. Why is that? That’s because about 85% of people with Multiple Sclerosis [MS] are initially diagnosed with Relapse Remitting multiple sclerosis [RRMS] and when disease progression happens, it is then considered to be secondary progressive MS.
Management believes that sales of BRIUMVI in RMS should start to ramp up in the coming quarters and I believe this to be the case. That’s because it has already taken several measures, many of which I have noted directly above, in order to build upon its sales momentum in 2023. These include the European approval of BRIUMVI for RMS, the J-code given for BRIUMVI from CMS and obtaining 50% payor coverage policies for covered lives in the United States for this drug as well. According to the 10-Q SEC Filing, TG Therapeutics had cash, cash equivalents and investment securities of $139.7 million as of March 31, 2023. It believes that it has enough cash to fund its operations at least into mid-2024. The reason why it is giving this estimate, is because of its cash on hand, along with the $20 million of available capacity it has under its existing term loan facility.
Risks To Business
There are several risks that investors should be aware of before investing in TG Therapeutics. The first risk to consider would be with respect to commercial sales of BRIUMVI for the treatment of patients with relapsing forms of multiple sclerosis [RMS]. Even though BRIUMVI has a competitive advantage in terms of dosing options compared to other RMS drugs, there is no guarantee that it will be able to fend off such competition. In addition, while initial partial sales of BRIUMVI look to be good, there is no guarantee that there will be an increased trend of net product revenues in the coming quarters for it.
A second risk to consider would be with respect to the European commercial launch of BRIUMVI for RMS, because sales in this territory are not expected to happen until later in 2023. There is no guarantee that the sales expectations of BRIUMVI for RMS will be met in this territory.
The final risk to consider would be with respect to the two ongoing phase 1 studies, each of which are using different drugs to treat B-cell lymphoma patient populations. That’s because while both drugs TG-1801 and TG-1701 hold the potential to become blockbuster drugs, there can be no assurance that they will be able to pass phase 1 clinical testing.
Conclusion
The final conclusion is that TG Therapeutics is a good speculative biotech play to look into. I already talked about the huge sales potential of BRIUMVI in being used to treat patients with relapsing forms of multiple sclerosis [RMS]. Not only has it achieved a good amount of net product revenues for this drug for the treatment of this specific MS patient population, but it has also already gone on to receive European approval for it for the same indication as well. Then, there is blockbuster potential with two other drugs, which are TG-1801 and TG-1701. In relation to TG-1801 it has the established CD19 targeting of B-cell lymphomas, but it also has the CD47 inhibitor “Don’t Eat Me” cancer targeting.
The last part is important, as I stated at the beginning above, Pfizer paid $2.2 billion to acquire Trillium Therapeutics for its CD47 “don’t eat me drug” and then Gilead Sciences paid about $4.9 billion to get its hands on another biotech with a drug that had the same mechanism of action. If TG Therapeutics can successfully advance TG-1801, then you can see why it should be highly valued. As it relates to TG-1701, this is another clinical candidate which also has great multi-billion dollar potential in terms of a partnership or buyout. One example I can point to for such a BTK drug is what happened many years ago, whereby AbbVie (ABBV) paid $21 billion to acquire Pharmacyclics for its BTK inhibitor drug Imbruvica. Again, you can see here why this is another highly valued product, should it be able to pass all clinical trials and ultimately gain approval for it by the FDA.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
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