TGTX - NASDAQ

Greetings, and welcome to the TG Therapeutics Third Quarter Earnings Update Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jenna Bosco. Thank you, Jenna. You may begin.

Thank you. Welcome, everyone, and thanks for joining us this morning. I'm Jenna Bosco, and with me today to discuss the third quarter of 2023 financial results are Michael Weiss, our Chairman and Chief Executive Officer; Adam Waldman, our Chief Commercialization Officer; and Sean Power, our Chief Financial Officer. Following our safe harbor statement, Mike will provide an overview of our recent corporate developments. Adam will share an update on our commercialization efforts and Sean will give an overview of our financial results before turning the call over to the operator to begin the Q&A session. Before we begin, I'd like to remind everyone that we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about our anticipated future operating and financial performance, including sales performance, projected regulatory milestones, revenue guidance, clinical development plans and expectations for our future -- for our marketed products. TG cautions that these forward-looking statements are subject to risks 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. In addition, any forward-looking statements made on this call represent our views only as of today, and should not be relied upon as representing our views as of any later date. We specifically disclaim any obligation to update or revise any forward-looking statements. This conference call is being recorded for audio rebroadcast on TG's website, www.tgtherapeutics.com, where it will be available for the next 30 days. Now I'd like to turn the call over to Mike Weiss, our CEO.

Thanks, Jenna, and good morning, everyone, and thanks for joining us on today's call. It was another good quarter for TG, and I'm happy to share that our net revenue for the third quarter was $166 million, which includes $140 million that we received as an upfront licensing fee from our ex U.S. partner, and also includes over $25 million of Briumvi net sales in the U.S. Today, I am pleased with the launch and our team's execution of our launch strategy would be an understatement. We continue to outperform our internal expectations and all external revenue expectations set at or prior to our launch. I believe we're in a great position to close out the year strong, and I'm excited for the next year and for the future of Briumvi and TG. Just to remind everybody, Briumvi is the first and only anti-CD20 monoclonal antibody approved to treat patients with relapsing forms of multiple sclerosis that can be administered in the 1-hour fusion twice per year following the starting dose. In clinical trials, Briumvi provided robust efficacy with a safety profile consistent with what is expected of the CD20 class. It's worth noting that while all anti-CD20s target the same protein, they are not all created the same. Epitope binding and potency of that binding as well as our ability to engage immunofactor cells are different. And we're seeing these differences begin to resonate amongst health care providers. Putting the whole package together, we see Briumvi as a differentiated anti-CD20 with best-in-class attributes and believe BRIUMVI's differentiated profile has supported our early and meaningful market share gains. I don't need to remind you that we're only in our second full quarter of sales. So still very early days here for our Briumvi launch, and we believe that we are well positioned for future share gains, ultimately driving us toward our goal to be the no. 1 prescribed anti-CD20 based on dynamic market share. I'd like to spend a few minutes talking about the recent ECTRIMS conference in Milan. ECTRIMS is the premier global MS Conference, and TG had a significant presence there this year. For me personally, it was great to interact with many health care providers and the real-world feedback was overwhelmingly positive. It was really gratifying to hear anecdotes about the tolerability and convenience people experiencing with the use of Briumvi, as well as stories about patients that were early depleters on other anti-CD20s and are now doing well on Briumvi. In addition to interacting with the health care providers at the conference, we had the opportunity to present additional exploratory analysis from the ULTIMATE I and II Phase III trials of Briumvi in relapsing forms of MS as well as the first data from our ENHANCE Phase IIIb trial, evaluating patients who switch from another IV anti-CD20 therapy to Briumvi. One of the goals of this trial is to understand the safety profile of a patient switching from another IV CD20 to Briumvi without the need for the 150-milligram starting dose as well as to evaluate the speed at which the first infusion before 450-milligram dose may be given safely. The early data presented was very encouraging, demonstrating in 12 patients that we could safely skip the 150-milligram introductory dose and go straight to the 450-milligram dose. In the first cohort, that was given as a 2-hour infusion, and demonstrated there were no infusion-related reactions reported nor any dose interruptions or delays. The second cohort is now enrolling and is evaluating the 450-milligram dose administered in the ordinary 1-hour infusion. Again, without the need for the 150-milligram introductory dose and we look forward to sharing more data from this trial next year. Interestingly, about 60% of the patients who entered this study, reported to have experienced a wearing off effect or what some people refer to as the crap gap while on their prior IV CD20. So that's something we're going to continue to look out for. While we're in Milan, we also had the opportunity to meet our colleagues from Neuraxpharm, our ex-U.S. partner. As you may recall, in June, Briumvi was approved in the European Union to treat adult patients with relapsing forms of MS who have active disease defined by clinical or imaging features. Our team has been working closely with the Neuraxpharm team and we continue to be confident in their ability to bring Briumvi to the market in Europe. With their extensive experience in the CNS space, their broad presence in all major European countries and an extensive and growing team dedicated to the Briumvi launch, we believe Briumvi is positioned for success in Europe. We are anxiously awaiting the Briumvi launch, which we believe is still on track for early 2024. We are also happy to share that we just received approval for Briumvi in the United Kingdom. This is another exciting step forward for Briumvi and for MS patients in the U.K. looking for a new treatment alternative. As we look forward, we are evaluating additional potential indications for Briumvi and our pipeline candidates as well as new product opportunities in MS and autoimmune diseases. Also, as I've mentioned before, we're evaluating the suitability of Briumvi as a subcutaneous injection. And we expect to be able to provide an update early next year as to whether we believe we have a suitable subcu formulation that could be brought forward into the clinic. Based on the current anti-CD20 subcu landscape, we do believe there is room for a more convenient, more tolerable option. We continue to view the subcu market as distinct from the IV market and thus as a potentially attractive expansion opportunity for Briumvi. Finally, let me discuss some financial matters. Our CFO, Sean Power, will join us in a bit to provide a more detailed financial update, but I just wanted to discuss some revenue expectations and our cash position. First, with respect to revenue expectations, many of you have witnessed the market effects associated with analysts changing their revenue forecast for Briumvi. Some of those changes have been driven by prior quarter sales but some have been driven by intra-quarter sales reporting from distributors, which despite our warnings about the usefulness of this data, has become a source of confusion and price volatility. To address this, beginning on November 1, our distributors will no longer be sharing distributor-level data with third-party companies. With that, as promised, I'd like to provide some guidance for the fourth quarter of 2023. At this time, we are targeting revenues of approximately $33 million to $37 million. That should put us on target for approximately $82 million to $86 million for our first partial year of sales, which is a bit ahead of the current '23 consensus of $80 million and well above the consensus of $72 million set around the time of our launch. Now turning to our cash position. As of the end of the third quarter, we had approximately $229 million in cash. As I mentioned on our last quarterly call as our revenues grow, and we continue to operate with a relatively stable OpEx, our cash burn is trending down. And from here, we believe we have a reasonable line of sight to profitability in the near term. All in all, we feel really confident with our cash position and our ability to execute on our business plan. With that, let me turn the call over to our Chief Commercialization Officer, Adam Waldman, who will provide more detailed information about our Briumvi launch. Adam?

Thank you, Mike, and good morning, everyone. I'm pleased to be with you today to share another strong quarter of execution for our Briumvi launch. We continue to deliver results that exceed expectations and set the foundation for future success. The third quarter net sales for Briumvi were $25.1 million, representing 57% growth quarter-over-quarter. This growth was primarily driven by increases in new patient infusions, reduced logistical barriers and continued steady growth in patient demand as represented by over 900 prescriptions into our hub. That brings our launch to date total to approximately 2,200 new patient scripts. And as we have mentioned in the past, we believe this figure is capturing about 80% to 90% of the total new Briumvi scripts written. As Mike mentioned, with approximately 40,000 MS patients starting at CD20 each year in the U.S., our patient accumulation remains on target. And based on scripts to our hub, we are now capturing a nice portion of the new anti-CD20 patient share at this early point in our launch. And we do believe the CD20 market is growing and will continue to expand going forward. Additionally, in Q3, we saw for the first time patients returning for their week 24 infusions, and we anticipate the number of week 24 infusions will increase significantly in Q4 as more patients are expected to return. From an execution perspective, we remain focused on our initial priorities to drive adoption in the high-volume targeted accounts, provide best-in-class patient support, enable access and educate patients. And we have made great progress across all of these priorities. The cumulative effects of what we've accomplished are certainly helping to drive the momentum we saw from Q2 to Q3, and we expect to see that momentum carry forward into Q4 and into next year. We continue to believe the Briumvi profile is best-in-class, and will eventually be the IV therapy of choice for the relapsing MS market. BRIUMVI's unique 1-hour infusion every 6 months delivers on patient convenience, reduces health care resource burdens and helps to address the needs of both private practice infusion centers and busy academic centers. The real-world experience with Briumvi continues to grow and the feedback we received is overwhelmingly positive. As we continue to progress towards our goal of making Briumvi the go to IV CD20 therapy, there is nothing more valuable than positive physician and nurse and patient experience. We believe their growing experience will help reinforce the differentiation of Briumvi and lead to expanded utilization in the future. Encouragingly, we are seeing increases in both breadth and depth with our prescribers. We are seeing more and more prescribers and centers getting their initial experience with the drug and we are now up to approximately 500 total prescribers at more than 325 centers that have used Briumvi. Importantly, the adoption rate at top centers of excellence continues to increase with now 90% of the top 50 centers and 80% of the top 100 centers having utilized Briumvi. Depth is also increasing from early adopters with significant increases in physicians that now have multiple patients on Briumvi. We view increases in repeat users as an important metric as we believe it likely represents a positive experience using the product. We have always known that the process of accessing Briumvi was going to be critical -- a critical success factor for this launch. And we are very pleased with the feedback we've received from customers on their interactions with both our people and our patient support services to date. We are very proud of the patient hub programs that we have built to support patients and our field teams have done a tremendous job engaging with our customers. We believe our efforts here are contributing to the positive experience with Briumvi and building confidence in our organization in general. We continue to focus on moving patients from the hub to the infusion as quickly possible -- as possible. And we are seeing improvements here over time. Continued improvement in payer coverage is facilitating our ability to do that. We are now up to 95% coverage for commercial and Medicare lives, exceeding our corporate goal for the year, and we believe this will enhance access to Briumvi moving forward. In addition, the permanent J-Code has now been loaded in the payer systems and our average selling price has been published, all of which should help build confidence in reimbursement. We have made progress -- we have also made progress in the quarter with major institutions and health systems. We have secured an increased number of institutional formularies wins for Briumvi. And importantly, we have seen our first scripts in infusion this quarter from several of the top academic institutions and highest volume MS centers. We are confident prescribing at these institutions will expand moving forward as they gain more and more experience and fully integrate Briumvi into their systems. Finally, our research indicates that patients play an important role in selecting their therapy for MS. With that in mind and now that we've made great progress on building awareness with our health care providers and gaining broad insurance coverage, we have significantly increased our patient activation tactics and are starting to see the impacts of those efforts. In September and October, we generated substantial increases in overall impressions through our digital media efforts and we are already seeing the impact in website visits and increases in patient requests for Briumvi. I can say with certainly -- with certainty that our team has built a strong foundation for success, and we are determined to build upon this. Going into the fourth quarter, we have solid momentum behind us, 95% coverage in place, decreasing logistical barriers, positive -- growing positive experience with Briumvi and an increasing number of patients coming back for the week 24 infusions. We remain confident in the short run, we'll see deepening utilization with our current base, and we'll continue to unlock more and more accounts going forward. We are also confident that in the long term that Briumvi will become the IV CD20 of choice for patients with relapsing forms of MS. We certainly have more work to do but we continue to make progress, and we are ahead of where we thought we'd be at this point and we are extremely motivated to continue to work every day to bring Briumvi to those people living with MS and their families. With that, I'll now turn the call over to Sean Power, our CFO.

Thank you, Adam, and thanks, everyone, for joining us. Earlier this morning, we reported our detailed third quarter 2023 financial results, which can be viewed on the Investors & Media section of our website. I'll start today's call by recapping some of the financial highlights from this morning's release. For the third quarter, we are pleased to report total net revenue of approximately $166 million, which is comprised of $25.1 million in Briumvi net product sales and $140 million in license revenue, stemming from the upfront payment for our ex-U.S. commercialization agreement with Neuraxpharm. This brings our total net revenue for the 9-month year-to-date period to approximately $190 million, which includes approximately $49 million in Briumvi net product sales. On the back of the reported revenues, we were able to report net income in both the 3- and 9-month periods. Net income for the 3-month period was approximately $114 million or $0.73 per share -- per diluted share and net income of $27 million or $0.19 per diluted share for the 9-month period. Our OpEx during the period has remained well controlled and within previously guided range -- ranges. For the third quarter, our R&D and SG&A operating expenses totaled approximately $48 million and approximately $38 million when excluding noncash compensation. Over the course of the year, we have continued to invest in Briumvi inventory, with approximately $34 million now on our balance sheet, of which $24 million is reflected in the current quarter cash burn. And finally, from a cash standpoint, we ended the quarter with approximately $229 million in cash, cash equivalents and investment securities. As Mike touched on earlier, we feel comfortable that our existing cash when coupled with modest Briumvi revenue assumptions, provides us with sufficient capital to fund our operations to cash flow positivity. With that, I will now turn the call back over to the conference operator to begin the Q&A.

[Operator Instructions] Our first question is from Ed White with H.C. Wainright.

Congratulations on a great quarter.

Thanks, Ed.

So Mike, I just wanted to get your thoughts on the anti-CD20 market penetration within the overall MS treatment landscape and your thoughts on infusion versus subcu injections going forward?

Yes. So I'll do a little bit about subcu. I'll let Adam take the first half of that question about the growing CD20 market. But yes, I mean my impression of the infusion versus subcu market, the infusion market is growing but the overall market is probably growing faster, and that's probably because the subcu market is expanding into areas in which the IV market never penetrated. So I think we're seeing subcu penetrating out into more general neurologists. Again, it's centers that probably were not already using or very limited use potentially of IV CD20. So we think that the IV market will continue to grow. Our focus continues to be on centers that are involved in IV therapy. And I think we're leaving for the bigger players here to work on the general neurologists. And as they expand, they're using to CD20 and into subcu and potentially into IV, we could then tag along and introduce Briumvi in those centers. Adam, do you want to talk about CD20 as a part of the overall MS treatment landscape?

Sure. Yes. So Ed, we estimate about 80,000 patients is about the dynamic market. Those are patients that are either initiating a new treatment for the first time or they are switching from another therapy in a given year. And about 50% of those or about 40,000 patients are going on a CD20. And we believe, as Mike said, that market is -- the CD20 market is growing and expanding but that's where we get -- that's our assumption for the MS market and where CD20s play in that market.

Okay. And perhaps you can comment on -- you mentioned the ENHANCE trial. I'm just wondering if we can get your thoughts on the real-world number of patients that are switching from other CD20s to Briumvi?

Sure. Adam, can you take that one?

Yes. So we have seen -- I think we've said before on this call that we did not expect a lot of patients to be switching from either IV CD20 or subcu CD20. That was not part of our initial estimates or thought process but we have seen it and we've said, actually, it surprised us at how much we are seeing. And I will say that a lot of the reasons that we hear from physicians as to why they are doing it is -- one is the 1-hour shorter infusion. Of course, that's the most often referred to attribute of Briumvi that causes a switch. But we also increasingly hear about this wearing off effect or crap gap that it's called by patients, where there's an early wearing off effect with other CD20s, and physicians are willing to get Briumvi a try to see if they can get a better response with Briumvi. So we're seeing that and I guess it has surprised us at how much we are seeing.

And perhaps my last question would just be how much free drug through Quick Start -- the Quick Start program did you see this quarter? And what are your expectations for that going forward?

Sure. Yes, free goods remained at around 20% this quarter, very similar to last quarter. The majority of that is Quick Start. So we do expect now that we have 95% coverage in place, that we will see a drop in free goods going into the fourth quarter and continuing forward. So I can't exactly tell you how much of a drop but we do think it will be less than what we're seeing in the first 3 quarters so far.

Our next question is from Roger Song with Jefferies.

Great. And my congrats for the good quarter. A couple of questions from us. Yes -- the first question may be a drill down for the patient composition you have been seeing for you -- for the patient to use Briumvi. So like how many of them are -- what's the breakdown between new patient versus switch patients and the renewed patients? Because I believe you start to see some renewed patients. But maybe more interesting is how the recent month in 4Q, you start to see those patients?

Yes. Adam, you want to tackle that one? So it's -- you're saying the composition of new versus returning patients for their infusions?

Is that the question, Roger? Or is it visit how many new versus switch patients? Can you just clarify the question before I answer.

Yes, sure. So basically, we have 3 categories of the patients. New patients, new to the CD20, switch from other CD20 and also the renew for the Briumvi patient. Maybe just qualitatively how you will characterize those 3 categories?

Got it. Sorry, I misunderstood you. Go ahead, Adam.

Sure. So we've seen a nice balance between all those 3 groups, right? So we are seeing a good percentage from new to therapy. We are seeing probably the biggest percentage from switches from non-CD20 and we are seeing a decent amount from -- as I mentioned before, decent and more than expected from existing CD20s. So relatively balanced across those 3 groups, probably a little bit more in the switching from non-CD20 therapy.

Got it. And another also related to the revenue question is the -- you report the prescription you're getting and also the revenue. From the prescription to the revenue, what are the key factors to play into the final net revenue, because the prescription you're getting are maybe those patients will have the compliance rate to get -- to fulfill those revenue. And of course, we'll have this free drug and gross to net. Are those being the key factors to convert from prescription to the revenue?

Adam, you want to keep going? You're on a roll here.

Sure. Yes. So those are the factors. I would also say it's important to understand that there is a time lag from the hub to the infusion, right? So there is time that goes on from when a patient comes into our hub and when a patient gets infusion. There's also -- you mentioned compliance but there are also -- we know that there are some patients that go into the hub that actually never get to an infusion. So those are the factors in addition to the ones that you mentioned. Yes, that's all I can think of. Does that answer your question, Roger?

No, that's great. Okay. Final question, a quick one. Mike, you have the guidance for 4Q and the overall year for 2023. Maybe when you will provide the 2024 revenue guidance? And how should we think about the trajectory from 2023 to 2024?

Yes. Thanks, Roger. So yes, we have not given any guidance on '24 yet. We're still getting our feet wet here and trying to work on how do we produce guidance. So still early days for us in that standpoint. But our goal would be to again, to the extent possible, to try to get some guidance out as early as possible next year. Again, to avoid people trying to guess what it's going to look like. So we are trying to close the information gap. So again, people don't use sources of information that we don't believe as reliable as what -- at least what we hope we're seeing and looking at is creating the forecast. So yes. So hopefully, we can get something out early next year and give some guidance to get people on the right track.

Our next question is from Mayank Mamtani with B. Riley Securities.

Team, congrats also on strong execution. So maybe just continuing on Roger's sort of follow-up questions on understanding prescription volume to revenues. So Adam, when you refer prescription volume, for example, if you have 2 loading doses, is that basically 1 prescription volume? And then the 24-week return patient, is that sort of another prescription number that basically, just from a process standpoint, is that how it works? And then sorry if I missed that, did you say the number for your new patient share info within the anti-CD20 class? It looks like you have some mature data now to be able to say what your market share is for new patients?

Yes. Mayank, just to be clear, the only number we're reporting is new prescriptions and they're not separate scripts. So we're not reporting week 24 scripts. We're not reporting day 15 scripts. The numbers we're giving you are new scripts for new patients coming into our hub.

Super helpful. And then on the new --.

Yes, the market share, yes, I think we're just taking the calculation of 40,000 patients in the year. Approximately it's about 10,000 a quarter. And if you get 900 new into the hub. And again, we're basing that just on folks coming into our hub. That gives you a good sense of the share of the anti-CD20 market that we're getting.

Got it. And then your point on the hub to infusion time and percent rate conversion to infusion, like this trend wise, how is that evolving? If you could comment on that. And I don't know if you commented on gross to net, if you could comment on that, too.

Sure. So as I mentioned in the prepared remarks, we are seeing improvements in time to -- from hub to infusion, which we would expect as insurance coverage gets better. So that's good that we're seeing that and we're doing everything we can to decrease that time as much as possible. There are some things that we can control and there are certainly some things that are outside of our control. But we think that that's an important thing to focus on and we are seeing improvements in that area. As far as the gross to net question, yes, I think what we said was in the first quarter, it was 77%. And in Q2, we said it was in line with that. And I think it's a good number to use from a modeling perspective across the year but we're not going to update the gross demand on a quarterly basis.

Understood. And final question about your sort of guidance, thinking you would give a little bit more color on new versus prior anti-CD20 switch, how should we think about that? And then also baking in the return patients, the 24 week return patients, could you just maybe comment on how to think about 4Q and into first half given what you're seeing?

Sure. I think I covered the distribution of patients. I'll give a couple of things to think about with regards to revenue from week 24 infusions. So just a couple of things to think about. One is that and you mentioned this, a patient that starts therapy is going to get that initial loading dose or 150 milligrams followed by 450 milligrams. So that's 4 vials, right? The vials are 150 milligrams each, so that's 4 vials. A patient coming back for week 24 is getting 3 vials, right? So that's a 25% reduction if -- when that patient comes back and just from a revenue standpoint. The other thing that's important to think about just in terms of revenue from repeat versus new is you have to take into account that not everyone will return from week 1 to week 24. We still know what that -- obviously, it's still way too early for us to tell you what we think that, that will be for Briumvi. But we do know that looking at other IV CD20s, that they lose about 15% of patients from drug initiation to their 6-month dosing. And then that drop-off rate seems to decrease at a slower rate from there, right? With the average duration for an IV CD20 seems to be about 5 years and growing. But they do lose about 15%, is our understanding of the data, about 15% from the first infusions to the second infusion, which is the largest drop off. And then as I mentioned, it's sort of even drop from there. So those are 2 things to think about when you're thinking about return revenue. Hopefully, that answers the question.

Our next question is from Eric Joseph with JPMorgan.

I appreciate the guidance that you guys laid out for the fourth quarter and full year. Can you talk a little bit about your internal targets, I guess, to delivering on that expectation. I'm wondering sort of if the charge is to add new centers or expand share within existing centers or perhaps even lean a little bit more to this CD20 switch opportunity that is a bit surprising. And maybe just one follow-up to that -- to your last comment, Adam, on repeat for week 24 infusion expectations, that 15% drop off, that's kind of a hard final number? Or is that -- or is it just sort of a time shifted, where you might sort of catch the patient but not quite exactly on a 24-week schedule?

Yes. So let me -- I guess I can take -- You want me to go, Mike?

Yes, go ahead. Yes. Go ahead.

Okay. Yes. So to the first part of your question, yes, our strategy is to continue to increase enrollments and continue to find new business, adding new centers and new prescribers, obviously, is important. But at the same time, deepening experience seems to be something that's leading to more experience. I will say in this market that as physicians are getting used to the product or they want to try it, they want to see how it goes. They want to see how reimbursement goes and then they'll -- once they have that experience, they -- and it goes well, then they will continue to add. So we're getting to the point here now where many, many physicians have had that experience now, they've gotten reimbursed and now they're willing to expand their base. So I think that's -- we'll continue to lean in there. But I think there's plenty of opportunity here for us to expand usage into new centers and new prescribers. We've made great progress but there's plenty of opportunity for us to continue to grow both in academic centers as we've mentioned, is an area that has been slightly slower to adopt. It's increasing but it's been slightly slower. We think there's plenty of room in academic centers to increase. And then just in general, I mean, we're -- again, we're making good progress on penetration with our top prescribers but there's a lot of room for us to continue to grow. And then the second part of your question was the 15%. Yes, I'm just -- what we're doing there is just -- we don't know obviously what our drop-off rate is going to look like. But we -- there is published data out there with the other IV CD20. We've looked at it and it's about a 15% that they're losing between dose 1 and -- the first dose and the week or the 6-month dose.

Okay. In your hub, do you have visibility on week 24 prescriptions versus starting prescriptions? And is that sort of a metric that you anticipate providing or updating the street on going forward?

Yes, we don't get those. No, we don't necessarily get those. We get the first ones to come in. And then once they're in our hub then we are -- what we're doing is we're -- as they come up for their week 24 dose, we're reaching out to them. There's no requirement to come back into our hub at that point. But we're reaching out to them to see what we can do to help with the reverification of insurance benefits and so on and so forth. But note that we don't have access or visibility to the week 24 scripts.

Our next question is from Prakhar Agrawal with Cantor Fitzgerald.

Thank for taking my questions and congrats on the quarter. Maybe first question on the switches from Ocrevus, is this a trend that you think versus into next year? Or is there some sort of a bolus of Ocrevus patients wanting to switch initially maybe due to tolerability issues? Any color for -- would be appreciated?

Yes, I'll take a crack at that, Adam, you could join in. I mean, based on my interactions with health care providers and even with our own folks, I would say that, that's something that would at least stay constant, if not grow over time. I think the more patients who go on Briumvi, the more patients will be interested in going on Briumvi. So if you're reasonably satisfied or somewhat unsatisfied but not horribly unsatisfied with your current CD20, you still may consider changing, you just want to see more utilization. So we've heard that from HCPs. I'll talk to some of the Ocra patients who are potentially candidates and they'll say, hey, I just want to wait a little longer to see more on market experience, hear more stories from you and your patients and how things are going. So I don't think it's -- it was about any sort of bolus. I do think it's about organic demand that will occur over time as more and more people see the potential benefits of switching over. Adam, any further thoughts on that?

No, I think you covered it, Mike. Thanks.

Got it. And second question on expenses. So the expenses for 3Q were at the lower end of your OpEx guidance, excluding share comp and inventory build. So any one-offs for this quarter we should be aware of has been more of 4Q? And as a follow-up, any initial thoughts whether you expect a significant infection and expense growth trajectory for next year? Or is it more about steady growth?

Yes. I'll take the second part of that and Sean, maybe hit the expense question. In terms of any inflection in expenses, no, I think the short answer there is no. We do anticipate that the burn will creep up a bit. We've talked about that we've always had a plan to modestly expand our team. We're doing more what I refer to as their support or advertising initiatives, mostly online and social. So we are definitely creeping up on the burn but nothing too dramatic at all. And you've also talked about getting more aggressive on the R&D side. But again, nothing that will dramatically change or show any sort of major inflection in expenses. We've been saying that our operating burn is between $40 million and $50 million. But in fact, it's been slightly lower than that over the last 2 quarters in terms of true operating. So we have room to be within the $40 million to $50 million and should be pretty unnoticeable from a financial standpoint. Sean, do you want to answer the question on the expense side?

Yes. Prakhar, would you mind just clarifying your question as early...

Right. So yes, for 3Q, it was at the lower end of your OpEx guidance, $40 million to $50 million for 3 -- for the quarter. So maybe any color on whether there were any one-offs or you -- and how should we think about the 4Q number?

Yes. No one-offs in the quarter. And I think Mike covered it pretty well as it relates to sort of the fourth quarter next year. So no one-offs in the quarter that really drove things being on the lower end of the range.

Okay. Got it. And last question. There's some interesting data from the BTK drugs in MS. So how do you see those drugs impacting the CD20 class? And I know you had a BTK in the pipeline. Is there any plan to take that forward into MS?

Sure. So yes, the BTKs look interesting, I'd say, at this point from a far until we get the Phase III data, which I think is possible that we may see some first Phase III data before the end of this year. We won't really have a good sense of the exact profile. So I think I'll reserve too much judgment other than, I'll say, from a market standpoint, what we do here as folks are more excited about the potential for BTKs in primary progressive MS, where glial cell activation may be or inactivation through BTK could be a really nice mechanism for slowing the progression in the absence of active disease. RMS is primarily characterized by active disease, which is well served by the CD20 class and the convenience of once every 6 months doesn't seem to fit most people's high end of convenience factor. So unless something remarkable happens in the RMS patients, I think most people are looking at it for RMS patients as another oral option, which will compete with the current oral therapies but shouldn't really compete very much with the CD20s. For primary progressive, again, on the other hand, that could be a potential competitor to CD20s if it performs at a high level. So it's all data dependent. We'll see how it looks. So certainly going to reserve judgment. We do have our own BTK. We've been hanging back. We have a lot of information in cancer patients about the profile of our drug. So we know what it looks like, we can move pretty quickly once we decide to pull the trigger. But we're going to sit back, let's see some data come out. Let's identify if there's an opportunity to fit in to the space, and we'll go from there. So we're all waiting on the data for the moment. Thanks, Prakhar.

Our next question is from Matt Kaplan with Ladenburg Thalmann.

Congrats on the strong quarter. Maybe -- can you give us a little bit more color? You said the momentum -- you're seeing the momentum continue past the end of the third quarter. Can you give us a little bit more color in terms of what you're seeing in October? And I guess maybe more broadly, do you expect to see any seasonality to the business at all?

Sure. Adam, do you want to go ahead and take that one?

Sure. Yes. Thanks, Matt. I appreciate the question. I think we've given guidance for the quarter. And at this point, I'm not going to get into any fourth quarter trends. I think the guidance will speak for itself there. In terms of seasonality, yes. I mean we did see some seasonality -- and we talked about this a little bit on the last call, we did see some seasonality over the summer months. In fact, when we looked at it, there is a sort of a dampening across the entire MS market in the summer months. We saw a slower July, followed by stronger months in August and September. But we do see -- at least we saw in early July and into July, a slowdown. And I think as people go on vacations, people go out of the office, it's natural, especially for infusion-based therapies and we are seeing that again with other IV CD20s as well. So we did see that seasonality there. We're just launching, so we're continuing to look at the trends and trying to figure out what we might see from season to season. So hard to say what the future will bring. Of course, around holidays, when people don't want to get infused, that's a natural time where you'll see slowdowns. But other than that, I think we remains to be seen as we continue to move forward.

Adam, that's really helpful. And then, Mike, I think you commented on this in terms of in your prepared remarks. But can you talk a little bit more about the anticipated impact of the subcu, specifically subcu accretive into or on the anti-CD20 space in MS. And how important it is -- is it for you to have a subcu offering?

Sure. Thanks, Matt. So yes, so if you take developers of subcu at their word in their last teleconference, they made it, I thought, pretty clear that they were going to use subcu to expand the market for the drug. So I don't think that it's a major competitive threat to IV CD20. I think their primary goal, again, I can only base it on what I heard and when I guess how I interpreted what they said. So I don't think it's going to have a major impact. I think they are going after that part of the market that has been reserved for subcu. One company has a monopoly in that area today. And I think the new subcu will try to compete for the extra convenience of a 1 on an every 6-month infusion. So I do think that it's going to have limited impact on the IV marketplace. In terms of the importance of us having a subcu. Again, it's not important from a primary goal for us, right? So our primary goal is to make Briumvi the number 1 prescribed dynamic share IV CD20. That's what everyone in the company is working toward. So that's -- and I don't think a subcu Ocrevus is going to impact the overall IV market and our ability to potentially achieve that goal. Is it a potential area for us to expand and create a new market for Briumvi? Sure. And if we get to a point where we think we can develop a subcu that has a profile that is competitive with what's out there and available, we do think that, again, the subcu market is growing. We think they're building into general neurologists and other neurology practices that have not historically used a lot of IV CD20s. So again, we do think there's a market opportunity. We think there's something there. When you look at the 2 products that are available -- sorry, one product is available and one product that we expect will be available at some point, we think there is room for a more tolerable, more convenient product opportunity. So not sure that we'll get there but we think there's an opening. We'll just have to see if we can fit the gap.

Our last question is from Mike DiFiore with Evercore ISI.

Congrats on the great quarter. Two for me, and I may have missed this, but regarding the J-Code, now that it's fully established at most intuitions, can we expect more of a gradual ramp? Or have we hit like a maximal establishment as far as the J-Code goes? And then I have a follow-up.

Adam, do you want to go ahead with that one?

Yes. I mean I think the J-Code is a positive thing. I think we're going to continue to see a steady growth and continued adds. But in general, it's a good thing, provides confidence in reimbursement. And it's a positive milestone to reach and now it has been fully sort of loaded into payer systems and ASP has been established. So we're in good shape there, and we would expect to see continued steady growth.

Got it. Got it. And then just to go back to the whole BTK competitiveness question. I thought your comments were interesting on how based on your research so far, physicians, they seem like they view BTKs as just another oral option for relapsing remitting MS but if the first -- if Phase III data pans out and their efficacy is really good, either equal or on par to the anti-CD20 therapies. Why wouldn't KOLs use these oral BTKs options instead? I mean, any color would be helpful there.

Yes. I mean, look, I think they will give them as options for patients. I think what we've heard and seen in the research is that patients do resonate toward an every 6-month treatment option. When I've talked to clinicians about our BTK in particular, and I've said, look, let's say It's just as good as the CD20 basis. So what, then they have to take a pill every day or twice a day? That's not as attractive as an every 6-month infusion. The other thing is compliance, right? Orals have historically poor compliance. So in terms of real-world experience at BTKs, even if they look phenomenal in clinical trials, compliance will be a problem. It's been for every oral drug. There's some research that's kind of [inaudible] at UT Southwestern with Dr. Darin Okuda, who collects unused oral meds for MS, and I think it's collected. I'm going to make up a number and I could be wrong but anywhere from 25 million to 50 million of unused oral meds. So it is a major issue, compliance. So again, I just don't see it's going to go in the oral class, I assume. Again, I could be wrong but based on the conversations that I've had with folks, unless it's dramatically better than the CD20 even comparable activity to CD20 will just drop it into the oral bucket because for most of them, there's nothing more convenient and nothing more assured than a 6-month IV infusion. So I believe that was the last question. Is that correct, operator?

Yes. There are no further questions at this time.

Excellent. Well, we've got two minutes to the market open. So I think we should bring this call to a conclusion. I just want to thank everyone again for joining us today. We feel really great about the launch and what we've done so far. Our team is really working super hard. They're sincere about really helping folks with MS. I would say the feedback we've gotten from the patients has been really heartwarming, and also really provides the fuel for everyone at TG to do what we do every day. I think it's also important that we recognize the HCPs who put their trust in TG and Briumvi. We really do believe it's a best-in-class medicine and can offer real benefit to patients. As we close out the year, we'll continue to work hard to drive adoption. We need the revenue targets we have set and build value in TG for our shareholders and our employees. With that, I'd like to conclude the call. Have a great day, everybody. Thank you.