TG Therapeutics: Is It Time to Invest In This Biotech Player After The Unprecedented 36.4% Jump?

TG Therapeutics (NASDAQ:TGTX) has been one of the most buzzing biotech stocks during this earnings season. Its stock soared an astonishing 36.4% higher in a single session on the heels of the company's impressive third-quarter results. The biopharmaceutical firm reported Q3 revenue of $165.8 million, a substantial leap from the prior-year period's $94 million, exceeding Wall Street's average estimate of $46.6 million. Let us dive deeper into the factors contributing to TG Therapeutics' remarkable performance, its growth prospects, and the considerations for investors eyeing this biotech stock.

What Does TG Therapeutics Do?

TG Therapeutics, Inc. is a biopharmaceutical company with a focus on acquiring, developing, and commercializing innovative treatments for B-cell diseases. The company's flagship product is BRIUMVI, an anti-CD20 monoclonal antibody designed for the treatment of adult patients with relapsing forms of multiple sclerosis (RMS), which includes conditions like clinically isolated syndrome, relapsing-remitting disease, and active secondary progressive disease in adults. In addition to BRIUMVI, TG Therapeutics has a robust development pipeline. This includes Umbralisib, an oral PI3K-delta inhibitor used to treat chronic lymphocytic leukemia (CLL), marginal zone lymphoma, and follicular lymphoma. Another key component of their pipeline is TG-1701, an orally available, covalently-bound Bruton's tyrosine kinase (BTK) inhibitor with a strong selectivity for BTK, showcasing its potential in in vitro kinase screening. Furthermore, the company is developing TG-1801, a bispecific CD47 and CD19 antibody, and has several other investigational medicines in its research pipeline. TG Therapeutics has entered into various license agreements and collaborations with pharmaceutical companies and biotech firms to further its development and commercialization efforts. The company's dedication to advancing treatments for B-cell diseases underscores its commitment to improving the lives of patients in need.

What Happened In The Q3 Result?

TG Therapeutics witnessed a remarkable upswing in revenue that can be attributed in part to a $140 million up-front payment from Neuraxpharm, following an agreement that granted Neuraxpharm commercialization rights for the multiple sclerosis drug, Briumvi, outside the U.S. Additionally, TG Therapeutics witnessed a surge in U.S. sales of Briumvi, raking in $25.1 million, almost half of the $48.9 million in total sales since the drug's launch in January 2023. CEO Michael Weiss expressed his optimism, stating that the sales figure for Briumvi had consistently exceeded expectations. Over and above the revenue beat, TG Therapeutics also reported net income of $113.9 million, equivalent to $0.73 per diluted share, compared to a net loss of $35.8 million ($0.26 per share) in the same quarter of 2022, far surpassing analysts' predictions of $0.12 per share. This led to a dramatic improvement in the market perception of the company leading to a surge in the stock price.

BRIUMVI Sales Growth & Market Penetration

One of the primary drivers for TG Therapeutics' future performance is the robust growth and increasing market penetration of BRIUMVI, their anti-CD20 monoclonal antibody for treating relapsing forms of multiple sclerosis (RMS). The latest earnings call revealed strong financial results, with BRIUMVI's net product sales totaling $25.1 million in the third quarter, marking a 57% quarter-over-quarter growth. The substantial growth was attributed to an increase in new patient infusions, reduced logistical barriers, and steady growth in patient demand, with approximately 2,200 new patient scripts captured since the launch, representing 80-90% of total new BRIUMVI scripts. The company has maintained its focus on high-volume targeted accounts, patient support, access, and education, resulting in positive feedback from customers. Increasing adoption rates at top centers of excellence, along with repeat users, signify a positive experience with the product, further enhancing its market share and growth prospects. The success of BRIUMVI in terms of patient convenience and favorable feedback from healthcare providers positions it as a strong contender for the top prescribed anti-CD20 drug, indicating continued market growth and stock appreciation.

Expanding Geographical Presence and Potential Launch in Europe

TG Therapeutics' partnership with Neuraxpharm, their ex-U.S. partner, has paved the way for BRIUMVI's expansion into international markets, particularly in Europe. BRIUMVI gained approval in the European Union to treat adult patients with relapsing forms of multiple sclerosis, and the company is working closely with Neuraxpharm to prepare for its launch in Europe, anticipated in early 2024. The extensive experience and presence of Neuraxpharm in major European countries are expected to facilitate a successful launch. Additionally, BRIUMVI recently received approval in the United Kingdom, further expanding its geographical reach. The international expansion of BRIUMVI is a significant driver for TG Therapeutics' future stock performance, as it opens new revenue streams and increases the company's global footprint.

Steady Progress Towards Profitability & Cash Position

TG Therapeutics' financial performance, as highlighted in the earnings call, demonstrated strong revenue growth, with total net revenue of approximately $166 million in the third quarter. The company reported net income in both the three- and nine-month periods, showcasing its ability to achieve profitability. With $229 million in cash, cash equivalents, and investment securities at the end of the third quarter, the company's cash position remains solid. The cash burn is trending down, and the company foresees a reasonable line of sight to profitability in the near term. Achieving profitability is a crucial driver for TG Therapeutics' stock as it indicates financial stability and sustainability, ultimately attracting investors and positively impacting stock performance.

Final Thoughts

Source: Yahoo Finance

We can see the visible post-result spike in TG Therapeutics’ stock price, pushing it above the $10 mark. The company does have its fair share of positive developments. Its future performance in the coming years should be influenced by the continuous growth of BRIUMVI sales and market penetration, its expanding geographical presence, particularly in Europe, and the steady progress towards profitability and a strong cash position. However, when considering TG Therapeutics as an investment opportunity, it is vital to acknowledge that this company may not align with the risk-averse investor's strategy, given its reliance on a single product. Without the substantial licensing revenue from Neuraxpharm in Q3, TG Therapeutics would have recorded a net loss. Nonetheless, the potential for Briumvi's continued growth and the impending results of early-stage studies on the company's experimental cancer drugs make it an attractive proposition for more aggressive investors seeking opportunities in the biotech sector.