TGTX - TG Therapeutics

Investment Analysis Clubs Saul’s Investing Discussions
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Thanks to @ryshab and @wpr101 for firstly introducing this company in their monthly updates.

TG Therapeutics is a biotech company, which currently has one commercialized drug, branded as Briumvi, to treat Multiple Sclerosis (MS). The drug appears superior to competitors’ based on data from their trial studies as well as 3rd party reviews e.g. this one. The drug requires IV infusion every 6 months, so technically the company has “recurring revenue”. In terms of the persistence rate (similar to retention rate), the management said in the Q3 earning call that they were doing at least as good as the public benchmarks, which was in 80s, if not better.

Per an analysis from TD Cowen, the peak sales potential of Briumvi could reach $3B in the US alone.

Tuning to financial results, revenue growth has been very strong for the last few quarters (from 23Q4 to 24Q4):
44.0 → 63.5 → 73.5 → 83.9 → 103.5 (preliminary)
Note that the initial revenue guidance provided by the company was only $220M-$260M, and the company delivered $324.4M based on the preliminary Q4 number, which was a 25% beat on the upper bound! The drug must have been doing really well to take market shares from competitors.

Currently, although Q4 earning was not officially released yet, the company announced in a conference that they were expecting 2025 revenue to be $540M, a 66.5% growth over the preliminary 2024 revenue. I’m personally expecting the management to continue raising their guidance by every single quarter as they did in 2024.

Market cap is currently $5.15B, so current TTM PS ratio is about 16 and NTM PS ratio based on guidance is ~9.6. I’m expecting the company to deliver close to 100% growth in 2025, but we’ll need to see how they execute.

Gross Margin is pretty high at ~90%, and with the strong momentum of the new drug, I expect the company to have net-income break-even on GAAP basis.

The company also has some ongoing studies in the pipeline, which could fuel the future growth, though there will still be a long wait time for these initiatives to land.

Overall, this stock looks very attractive to me and I plan to start a position to make it a 3rd biotech pick in my portfolio following $AXSM and $DCTH.

Cheers,
Luffy

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For those who are interested in this company. $TGTX just reported a really strong Q4 earning.

Revenue: 44.0 → 63.5 → 73.5 → 83.9 → 108.2
Net Income: (14.4) → (10.7) → 6.9 → 3.9 → 23.3

The company expects 2025 full year revenue to be $540M (64% YoY) and operating expense to be $300M. (Looks extremely profitable!)

Press release: https://ir.tgtherapeutics.com/news-releases/news-release-details/tg-therapeutics-provides-business-update-and-reports-fourth-4

Luffy

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Some notes from the earning call transcripts:

  1. The CEO said “The feedback on BRIUMVI and the TG team, was overwhelmingly positive.”
  2. The CEO expects to start one or multiple pivotal trials this year following the ENHANCE trial. Based on my understanding. This trial study primarily explores faster infusion time and switching from other IV treatments of MS to BRIUMVI. If it succeeds, it can further enhance BRIUMVI’s differentiating and bring new opportunities.

While we haven’t presented data from this cohort yet, from the data we have seen in over 50 patients, we feel confident that this approach is achievable in a four-hour infusion, which is the same time frame as our currently approved starting dose. We look forward to launching one, or more pivotal trials this year, with the goal of potentially incorporating all, or some of the updates exploring the ENHANCE study, into the IV BRIUMVI label as soon as possible.

  1. The CEO sees strong results from their Phase 1 studies of subcutaneous formulation of BRIUMVI as well and expected to start pivotal trial possibly in mid year. So sounds like they are skipping phase 2 trials, which will significantly shorten the time to market. This can unblock significant new opportunities according to the CEO.

Another key effort for us, is developing and commercializing a subcutaneous formulation of BRIUMVI. As we’ve discussed in the past, currently the majority of MS patients starting on anti-CD20 will choose an IV delivered every six months, and the remainder nearly 40% are now choosing to self-administer a subcu at home. With almost 40% of new starts going on a self-administered subcu, we believe subcu BRIUMVI, would represent a meaningful expansion opportunity for TG, and most recently at the JPMorgan Conference.

We were pleased to share that, we believe the preliminary data from our bioavailability studies, support at least every other month dosing for subcu BRIUMVI. The currently self-administered Subcu is taken once per month, so if we are successful, we could cut the number of injections per year in half. This is an exciting development for us, and we look forward to commencing, a pivotal trial around the middle of the year, and providing additional information, on this program later this year.

  1. At beginning of 2024, the company guided BRIUMVI US revenue to be $220M ~ $260M, operating expense to be $250M. And they delivered $310M (29% beat on mid-point), $206M (18% less than guidance) accordingly.
  2. For the faster version infusion of BRIUMVI, the company targets to shorten it to 30 min, compared to 2-4 hours from competitors. The management expects to have BLA potentially a PDUFA day by mid 2027. So, still more than 2 years away from commercial impact from it.
  3. During Q&A, the management refused to disclose the revenue split between new patient dose VS maintenance dose. But they expected repeat prescriptions to start being the majority of the prescriptions in early part of 2025. In terms of market share, the management said:

we’re getting about one in four - on one in four patients on IV CD20 today, which represents about 60% of the market. But that number is increasing, and certainly, we expect that to increase throughout the year.

Luffy

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