TG Therapeutics Inc (TGTX) Q2 2020 Earnings Call Transcript – Motley Fool

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TG Therapeutics Inc(NASDAQ:TGTX) Q22020 Earnings Call Aug 10, 2020, 8:30 a.m. ET

Operator

Hello, and welcome to the TG Therapeutics Second Quarter 2020 Earnings Conference Call. [Operator Instructions] It's now my pleasure to turn the call over to Jenna Bosco, Senior Vice President, Corporate Communications. Please go ahead.

Jenna Bosco -- Senior Vice President-Corporate Communications

Thank you. Good morning, and welcome to our conference call to discuss TG Therapeutics Second Quarter 2020 Financial Results and Business Update. I'[m Jenna Bosco, TG's Senior Vice President of Corporate Communications, and I welcome you to our conference call today. Following our safe harbor statement, Sean Power, TG's Chief Financial Officer, will provide a brief overview of our financial results and then, turn the call over to Michael Weiss, the company's Executive Chairman and Chief Executive Officer who will provide an overview of the ongoing development of our lead compounds, ublituximab and umbralisib as well as an update on our overall company standing.

Before we begin, I would like to remind everyone that many remarks we make about our future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. TG cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated. Factors that may affect TG Therapeutics' operations include various risk factors that can be found in our SEC filings. This conference call is being recorded for audio rebroadcast on TG's website http://www.tgtherapeutics.com where it will be available for the next 30 days. All participants on this call will be on a listen-only mode.

Now, I would like to turn the call over to Sean Power, our Chief Financial Officer, to briefly discuss the financial results for the second quarter of 2020 as well as the company's overall financial condition.

Sean A. Power -- Chief Financial Officer

Thank you, Jenna and thanks everyone for joining us. As you may be aware, our financial results were released this morning and can be viewed on the Investors & Media section of our website. I'll begin with our cash position. We are happy to have bolstered our balance sheet during the quarter, raising more than $240 million through the combination of our public offering and the use of our ATM facility following the positive top line UNITY-CLL Phase 3 results. Accordingly, at June 30, we had cash, cash equivalents and investment securities of $275.6 million, which we believe leaves us well funded to support our operations through 2021.

Our net loss for the second quarter of 2020, excluding non-cash items, was approximately $45.5 million. The GAAP net loss for the second quarter 2020 was $52.9 million or $0.47 per share compared to a net loss of $36.2 million or $0.42 per share during the comparable quarter in 2019. Our net loss for the six months ended June 30, 2020, excluding non-cash items, was approximately $85.6 million. The GAAP net loss for the six months ended June 30, 2020 was $104 million or $0.95 per share compared to a net loss of $71.4 million or $0.85 per share for the six months ended June 30, 2019.

For the remainder of 2020, we expect our R&D costs to decline as our pivotal programs continue to wind down, which will be partially offset by a modest increase in G&A costs as we continue to prepare ourselves for our first commercial launch.

With that, I will now turn the call over to Mike Weiss, our Executive Chairman and CEO.

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Great. Thanks, Sean. And thanks, Jenna, and thanks everyone for joining us this morning. It's been a truly amazing first half of 2020 for TG, and we're expecting exciting things for the second half where we will announce results from our ULTIMATE MS Studies and present detailed results from our UNITY-NHL and UNITY-CLL studies. And as we move into 2021, we could receive our first approval propelling us forward from a development stage company to a fully integrated commercial organization.

Let me start the call by highlighting some of this year's major accomplishments. We completed our first rolling submission of a New Drug Application for single agent umbralisib in the treatment of patients with previously treated marginal zone lymphoma and follicular lymphoma. This was an incredible achievement for our company, and I commend our team's effort in preparing this submission under such challenging circumstances. We also announced that the UNITY-CLL Phase 3 trial evaluating U2 combination in both treatment-naive and previously treated CLL patients met the primary endpoint of improved progression-free survival with a p-value of less than 0.0001.

As Sean mentioned, we bolstered our balance sheet with over $240 million in new capital from our largest public offering to date as well as the use of our ATM facility.

We strengthened our scientific and medical leadership team with the addition of Dr. Owen O'Connor as our Chief Scientific Officer. He joins us from Columbia University Medical Center where he most recently served as Professor of Medicine and Experimental Therapeutics and the Director of the Center for Lymphoid Malignancies, as well as Co-Program Director of the Lymphoid Development and Malignancy Program at the Herbert Irving Comprehensive Cancer Center at Columbia University Medical Center. We also added Dr. Sagar Lonial to our Board of Directors. Dr. Lonial is currently serving as Professor and Chair of the Department of Hematology and Medical Oncology at the Emory University School of Medicine, as well as the Chief Medical Officer at Winship Cancer Institute of Emory University.

We've also been hard at work building our commercial and medical affairs organizations. This team is very impressive with deep experience launching products in the hematology/oncology space, and they have already made great progress advancing our launch plans. We have also had multiple data presentations and publications already this year, including the final results from the GENUINE Phase 3 trial presented at ASCO by Dr. Jeff Sharman, Medical Director, Hematology Research at US Oncology, which demonstrated that the addition of ublituximab to ibrutinib, significantly improved progression-free survival, overall response rate, complete response rate, and increased the rates of undetectable minimal residual disease as compared to ibrutinib alone.

At EHA, Dr. Chan Cheah, the Clinical Lead for Lymphoma at the Sir Charles Gairdner Hospital and Director of the WA Lymphoma Center of Research Excellence presented preliminary safety and efficacy data of our investigational highly selective BTK inhibitor, TG-1701 as a monotherapy and in combination with U2. We are excited about this compound, especially in combination with U2 and look forward to further data later this year and the initiation of additional combination trials with 1701 next year.

Finally, Dr. Javier Pinilla and the team at the H. Lee Moffitt Cancer Center and Research Institute recently published preclinical data describing the unique immunomodulatory effects of umbralisib in Blood Advances, a journal of the American Society of Hematology. As I mentioned, it's been an exciting first half for TG.

Now, let me turn to our pivotal programs and provide a high level overview and status update for each. Let's start with the UNITY-NHL program. As a quick reminder, the UNITY-NHL trial is a multifaceted program evaluating umbralisib monotherapy as well as combinations, including the U2 combination in a variety of disease cohorts. The umbralisib monotherapy cohorts evaluating patients with previously treated marginal zone lymphoma or follicular lymphoma have met their primary endpoints of overall response rate. Based on those results, we completed our rolling NDA submission to the FDA in June. This is a major milestone for us and a huge step forward to bringing umbralisib to patients in need. As a reminder, umbralisib received breakthrough therapy designation for patients with marginal zone lymphoma.

Next, I'd like to discuss the UNITY-CLL trial. As a reminder, the UNITY-CLL clinical trial is a global Phase 3 randomized study of U2 versus the combination of the chemotherapy chlorambucil plus the CD20 obinutuzumab in patients with treatment-naive and relapsed or refractory chronic lymphocytic leukemia. This trial is being conducted under special protocol assessment with the FDA. In early May, we announced the UNITY-CLL trial met the primary endpoint at a pre-specified interim analysis demonstrating a statistically significant improvement in PFS with a p-value of less than 0.0001, as assessed by Independent Review Committee. You may recall that the trial enrolled approximately 60% previously untreated, or they can be referred to as treatment naive patients, and 40% who were relapsed or refractory from prior therapy. And we are pleased to note that the PFS benefit was observed across both patient populations. If approved, we believe the U2 combination has the potential to be an important treatment option for patients with CLL. We are extremely pleased with the outcome of the study and look forward to presenting data from this trial by year end with a BLA NDA submission to follow.

And last, but certainly not least, let me review our ULTIMATE program in multiple sclerosis. As a quick reminder, our ULTIMATE 1 and 2 Phase 3 trials in relapsing forms of MS are two independent global randomized multi-center trials comparing ublituximab to oral teriflunomide. The primary endpoint for each study is annualized relapsed rate following 96 weeks of treatment and is designed to support submission for full approval of ublituximab in relapsing forms of MS. These trials are fully enrolled and being conducted under special protocol assessment with the FDA. Currently, there is only one CD20 approved for MS, which is currently tracking to have 2020 global sales in excess of $4 billion. We believe CD20 usage will continue to grow as more physicians utilize the class earlier in the treatment paradigm. If approved, we believe ublituximab should be an attractive treatment option in the CD20 market, offering patients with MS the convenience of a one-hour infusion every six months at a competitive price. Despite some minor delays from COVID, we are pleased to report that we are still targeting releasing top line data from both studies in the fourth quarter.

We are extremely pleased with all the progress we have made thus far in 2020 despite all the challenges in this new COVID environment, and I have to say how impressed I'm with the team's ability to power through and continue to achieve the ambitious milestones we've set for ourselves this year, and we're looking forward to a very exciting next six to 12 months where we are targeting pivotal data from our ULTIMATE MS Phase 3 clinical program, which, if positive, will lead to a BLA submission for ublituximab, data presentations from both UNITY-NHL and UNITY-CLL, and NDA BLA submission for the U2 combination in CLL and, if all goes well, launching our first product, umbralisib in the treatment of marginal zone lymphoma and follicular lymphoma.

With that, I'd like to turn the call back over to the conference operator to begin the Q&A session, following which I will return to make some concluding remarks.

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Alethia Young from Oppenheimer. Your line is now live.

Unidentified Participant

Hi, thanks. [Technical Issues] on for Alethia. Congratulations on all the progress this quarter. As we get closer to ASH, can you give us a sense of the sort of update we might get from the ULTRA-V study with venetoclax in terms of just the numbers of patients and follow-up, and then also wanted to see if there's any update on some of the earlier combination studies that I know you guys spoke to that in the past and be excited about it specifically, I think there's one for patients who are on BTK or venetoclax and haven't gotten to a clear response and then adding U2, and just how that's shaping up.

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Sure. So in terms of ULTRA-V, I actually don't have the exact numbers, but I would hope by ASH, we'd have somewhere in the order of at least 15, 20, maybe even a few more patients who have completed 12 months of treatment. I think there will be somewhere in the order of 50-ish patients, 40, 50 patients -- sorry, let me just take that back. It's not ULTRA-V. ULTRA-V, the Phase 2 will not be presented until complete or until, I guess, later. This is the combination of venetoclax plus U2, is coming from our Phase 1 trial, and that's what I'm referring to, so let me start over.

So we will have Phase 1 data presented later this year on the Phase 1 combination of U2 plus venetoclax, and again that's what we presented previously at ASH, and the update should hopefully include, like I said, let's call it 15 to 25 patients who have completed 12 months of treatment. In total, there should be information on around 40 to 50 patients, so that will include safety and some preliminary efficacy prior to the 12-month mark, so that's where we stand with presentations of U2 plus venetoclax.

The other study you mentioned is a smaller study. It's only in one or two centers. It's the study where we have U2 added on top of BTK or venetoclax in patients who have been on a BTK or venetoclax single agent for greater than six months and have not achieved an MRD negative or CR, and we don't have any update expected on that trial.

Unidentified Participant

Thank you.

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

No problem. Thank you.

Operator

Thank you. The next question today is coming from Josh Schimmer from Evercore ISI. Your line is now live.

Josh Schimmer -- Evercore ISI -- Analyst

Thanks for taking the questions. Could you provide a little bit more detail on your commercial team, their relevant experience, as well as the cadence and timing of building out a full [Technical Issues] how many reps you'll need? And then, given your portfolio of assets, you've been focused on creating best-in-class regimens for CLL, MCL and follicular lymphomas. So are there other liquid or solid tumors which you have in sight? And if so, can you talk a little bit about your development strategy there? Thanks.

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Sure. Thanks, Josh. So in terms of the commercial team, we brought on Adam Waldman who headed up the US hematology franchise for Celgene in his last position, but he went up the ranks in lots of different positions and commercialization at Celgene. He's put together a pretty remarkable team. We now have heads of all functional areas for the commercialization team, including -- in our commercial operations, we have a Head of Market Access, we have a Head of Medical Affairs, and hopefully soon we'll be able to announce a Head of Sales, so the whole team is coming together. I'd say it's a -- the leadership has been either primarily from Celgene or from Bristol and the teams below them are really coming together nicely.

So I don't know how much more detail you want than that, but at some point, we'll get Adam on the road in the next several months -- well, not on the road but virtually on the road at some point, and he can give obviously more details and chat in depth. But if you want more detail, just let me know.

And then in terms of other areas, obviously, our core focus has been the indolent lymphomas and leukemia, so that's obviously chronic lymphocytic leukemia, is the largest and then we have follicular lymphoma and marginal zone lymphoma. Outside of that, we do have exploratory opportunities or studies going on in diffuse large B-cell and in mantle cell lymphoma, which are, I'd say, again earlier and more exploratory, but it is possible -- I mean, we certainly have a notion that we will push into those areas eventually, whether it's with U2 or with other pieces of our portfolio. We're excited about our anti-CD47/CD19 bispecific antibody that could be certainly used in diffuse large B-cell, as well as the indolent disease that we're currently covering. We think there's an opportunity for PDL1 to work in combination with some of the agents in the portfolio in more aggressive lymphomas as well, so again diffuse large B-cell and possible mantle cell there, and we know that BTK inhibitors work in mantle cell so that's something we'll be exploring as we move forward.

So again, we're sticking pretty close to our core of our indolent diseases, but in terms of B cells on the docket, certainly we'll be looking at diffuse large B-cell and mantle cell as some future potential. Obviously, too early for -- to say too much.

Josh Schimmer -- Evercore ISI -- Analyst

Maybe a couple of specific follow-ups, if I can. In terms of the number of sales reps you expect to be launching with and whether you'll hire them prior to approval or subsequent, and then on additional indications, some other PI3 kinase inhibitors have shown effect in some large indications like myelofibrosis or myeloma. Are either of those on your radar screen as well?

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Yeah, so I'll take the second question first because I -- before I forget it, and then I'll go back to the sales force sizing. In terms of multiple myeloma, we haven't done too much yet, but obviously the team, Adam and some of the other folks that have come over from Celgene are very familiar with the myeloma market, and we do have Dr. Lonial on the board, who is a recognized expert in multiple myeloma. So I think we will start to think about if there is an opportunity for us in myeloma and we've got some pieces in place to at least do a pretty good exploration of that.

In terms of myelofibrosis, we've already presented some pretty interesting and compelling data of umbralisib in combination with ruxolitinib in myelofibrosis. And so, that's an area that we are taking a more serious interest in. We're starting to explore that somewhat seriously.

The other part of that I would note is that we do have a BET inhibitor that is ready to enter the clinic as soon as we can get there, so -- which could be very soon. So we do think there's an opportunity. There's been some data that's presented where a BET inhibitor has worked nicely in combination with ruxolitinib. I would argue that our umbralisib data in combination with ruxolitinib is just as good as the BET data that's been presented, but the possibility of putting all three together, our PI3K, our BET with -- in combination with ruxolitinib is something that we're excited about, we're thinking about and could be started in the relatively near term.

In terms of sales force sizing, I think the general idea is that I think we'd want to probably grow to a sales force at CLL launch, and this is approximate because we haven't completed the sizing studies, but just give or take 75-ish on the sales team. And then, so as we launch with marginal zone and follicular, our plan is at the time of the launch itself, we would expect to have probably half of that 75 in place for a follicular/marginal launch and then grow the sales force to that full size by the time of the CLL launch. It's kind of a staged approach. So -- and in terms of -- we won't wait to hire the first, call it, 30 or 35, we will not wait. Until after the approval, those people will be on board in advance of the PDUFA date. Like I said, those numbers are not -- don't lock me in, but those are in the range of. It could be plus or minus five or so, or 10 or so in each of those numbers, and like I said, Adam will probably give some more color over the coming months as the sales force sizing exercise is complete.

Josh Schimmer -- Evercore ISI -- Analyst

Okay. Thanks very much for the color.

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Yeah.

Operator

Thank you. Our next question today is coming from Ed White from H.C. Wainwright. Your line is now live.

Edward White -- H.C. Wainwright -- Analyst

Good morning. Thanks for taking my call -- my questions.

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Good morning, Ed.

Edward White -- H.C. Wainwright -- Analyst

Good morning, Mike. So Just a couple, maybe if you could review your -- what you think your biggest challenge to launching umbralisib is going to be. Is it going to be convincing them that the tolerability is better than others in the class, or is it going to be on efficacy? Just how you're going to be approaching that, and then also I'm sure you're having conversations with payors right now, if you're seeing any issues or pushback to coverage there. And then lastly, just if you can discuss your European strategy. Thank you.

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Yeah, I'm going to go reverse chron on the questions. So European strategy, we're still trying to figure that out. So I don't have any updates there. We are studying whether it makes sense for us to partner or to go it alone in Europe, and I think TBD is the best I can offer today. So let's -- give me another quarter and we'll give you a little more information perhaps.

In terms of the number two question, which was payors, we don't expect to have any payor issues. We have been engaging with payors. To my knowledge -- I'm not on the front lines of that exercise, but to my knowledge, we're not seeing any pushback to coverage. Typically, the cancer drugs don't see too much pushback in payor coverage, but again, we don't expect to see issues and engagement has begun.

And so, then I'd say the number one question, which is obviously -- well, they're all important questions, the number one question is any -- what's going to be our greatest challenge in commercializing umbralisib in marginal zone and follicular. Look -- personally I don't see too many barriers. We've done a lot of ad boards with community oncologists to try to get a feel for the marketplace. There's some folks who have some negative -- remaining negative impression of PI3K deltas. I'd say once you show them the data and explain to them the fundamental differences between this molecule and the first generation PI3K inhibitors, that their concerns melt relatively quickly. And then, there's some folks who are just completely open to novel treatment options. So I think our greatest challenge is just getting out there and educating folks.

I feel like in my head, we're like the side SIMS [Phonetic] of biotech. We need to make sure -- an educated consumer is our best consumer. The better people understand the value proposition that umbralisib brings to them and their patients, the better off we're going to be, and we've just got to get folks to try umbralisib. Once they do, relatively immediately, the vast, vast majority will notice that this is a very different compound and a different profile with their patients.

It's not a perfect drug. Let me just be clear that there are going to be some folks who don't have a good experience on the drug, but the vast majority will and that's in contrast to the first generation, where it was kind of the reverse, right? Most people had a bad experience. So, our goal is to get folks to try. We feel like we've got a really good leading -- because of our clinical trial sites, we had so many community oncologists who have used the compound already and have been participating in our studies. That -- obviously that's a place we're going to start. We're going to work with those folks, make sure that they're engaged and are interested in treating the patients with the drug, which so far has come back very positively.

And then, each one of those clinical trial sites represents typically a lot more than the clinical investigators who participate in the trial. So it's leveraging the relationships in those clinical trial sites to get their co-investigators or partners to also try umbralisib in their practice.

We're feeling good about it. I'm feeling great. From what I've seen and what I've heard, I feel we're going to do quite well. Again, look, marginal zone and follicular are not the biggest indications. So obviously, we have realistic expectations of what early sales can be in those indications, but I think in terms of getting a really great start into a CLL launch by getting more people to try the drug and use it and get comfortable with it is just going to make us that much more successful once we get to CLL, so education-education-education. Once people understand this compound and try it, we're going to be in a better position.

Edward White -- H.C. Wainwright -- Analyst

Great. Thanks, Mike. Maybe just a last question on 1801. You're going to have your first data at ASH. Can you give us a little hint as to what we can expect, what kind of data we're going to see at ASH? Thank you.

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Yeah. So I'm not sure what we'll be seeing at ASH for the CD7, for CD19 bispecific. I'm not sure we're presenting data this year. I have to double check with my guys. I'm not sure where you got that from, if you were talking to someone else, but our big presentations for ASH outside of the pivotal presentations are focused on U2 plus venetoclax and U2 -- BTK alone and switch to 1701, and U2 plus 1701. In terms of some of the earlier stuff for PDL1 and for CD47, I think we'll have to wait on that, but I'll double check. I'll double check.

Edward White -- H.C. Wainwright -- Analyst

Okay. Thanks, Mike.

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Okay. You got it.

Operator

Thank you. Our next question today is coming from Matt Kaplan from Ladenburg. Your line is now live.

Matthew L. Kaplan -- Ladenburg Thalmann -- Analyst

Hi, good morning guys. Mike, wanted to talk a little bit about the -- when we should hear about the PDUFA date for the NDA for umbralisib in marginal zone and follicular lymphoma?

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

Yeah, sure. So, typically, it's a 60-day time frame. So you file your submission once it's complete. Obviously, the rolling submission for us was complete around mid-June. So one would expect about a 60-day time frame, that's what the regulation say, 60 days, then they will either accept or issue a refusal to file. So I guess that's around August 15, give or take a day or two. It's the current expectation we'd hear back from them.

Matthew L. Kaplan -- Ladenburg Thalmann -- Analyst

All right. Okay. Thank you. And then just looking at your pipeline a little bit, wanted to dig into your current thoughts for, kind of, the regulatory path forward or development path forward for your BTK inhibitor and your anti-CD47/19 bispecific monoclone antibody.

Operator

Perhaps your phone is on mute.

Matthew L. Kaplan -- Ladenburg Thalmann -- Analyst

Hello?

Michael S. Weiss -- Executive Chairman, President and Chief Executive Officer

I'm sorry. Sorry Matt, somehow my phone got on mute. Yeah, so what I was saying is for the BTK in terms of regulatory strategy, CLL is an area of great interest, and then obviously marginal zone lymphoma is one. In both those indications, we've treated a number of patients with U2 plus ibrutinib, we've treated a number of patients with U2 plus 1701. I think between CLL and marginal zone, of basically U2 plus BTK, I don't -- I think it's a 100% response rate across both those indications thus far. Now of course, larger trials will bring that down -- it won't be 100%. I could be confident of that, but it's going to be very high response rates when we use U2 plus BTK. So that's something that we are excited about for both those indications where BTKs are indicated and U2 ought to be indicated, let's say that.

And then there is follicular lymphoma, where BTK doesn't have as much activity, but could be interesting on top of U2. There's mantle cell lymphoma where BTK alone is interesting and potentially U2 plus BTK could be interesting. So we think there is registration opportunities across those indications.

In terms of CD47/CD19, it's way too early, but we would certainly start targeting into diffuse large B cell and follicular with that agent. The earlier data with a competitive compound did look quite interesting in both follicular and diffuse large B cell once it was combined with a CD20. So that's something we'll try to get a look at as early as we can. Hopefully at some point next year, we'll be expanding that program.

Matthew L. Kaplan -- Ladenburg Thalmann -- Analyst

Thanks a lot for taking the questions, and congrats on the progress.

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TG Therapeutics Inc (TGTX) Q2 2020 Earnings Call Transcript - Motley Fool