Jenna Bosco - Director, Investor Relations Sean Power - Chief Financial Officer Michael Weiss - Executive Chairman, Interim President and Chief Executive Officer.

Jonathan Aschoff - Brean Capital Matt Kaplan - Ladenburg Thalmann Graig Suvannavejh - MLV & Co. Joe Pantginis - ROTH Capital Partners.

Greetings and welcome to the TG Therapeutics first quarter 2014 earnings conference call. (Operator Instructions) I would now like to turn the conference over to Ms. Jenna Bosco, Director of Investor Relations. Thank you, Ms. Bosco. You may begin..

Thank you. Good morning and welcome to our conference call regarding TG Therapeutics' first quarter 2014 financial results and business update. I am Jenna Bosco, TG's Director of Investor Relations, and I welcome you to our conference call today.

Following our Safe Harbor statements, 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 Interim Chief Executive Officer, who will provide an update on the ongoing development of our novel glycoengineered anti-CD20 monoclonal antibody, TG-1101, and our novel once-daily PI3K delta inhibitor, TGR-1202.

Before we begin, I would like to remind everyone that various remarks that we make about our future expectations, plans and prospects constitute forward-looking statements for the 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 and uncertainties that can be found in our SEC filings.

This conference call is being recorded for audio rebroadcast on TG's website, www.tgtherapuetics.com, where it will be available for the next 30 days. All participants on this call will be on 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 first quarter of 2014 as well as the company's overall financial condition..

Thank you, Jenna. And thanks, everyone, for joining us. As you may be aware, our financial results were released last night and can be viewed on the Investors and Media section of our website, tgtherapeutics.com.

As of March 31, 2014, the company had cash, cash equivalents, investment securities and interest receivable of $54.5 million as compared to $45.4 million at December 31, 2013.

In March, we announced the completion of an underwritten public offering to a single institutional investor, which provided net proceeds to the company of approximately $16.8 million. As it relates to our cash position, we will continue to operate with a very controlled burn and expect our current cash will be sufficient for at least 24 months.

Turning to the financial results for the quarter. The consolidated net loss for the first quarter ended March 31, 2014, was $7.5 million or $0.25 per diluted share compared to a consolidated net loss of $3.7 million or $0.17 per diluted share during the comparable quarter in 2013, representing an increase in consolidated net loss of $3.8 million.

The consolidated net loss for the first quarter ended March 31, 2014, included an increase in other research and development expenses of $1.3 million, principally related to the TG-1101 and TGR-1202 clinical development programs and drug supply costs.

Also, included in the consolidated net loss for the first quarter ended March 31, 2014, is $4.2 million of non-cash compensation expense related to equity incentive grants. I will now turn the call over to Mike Weiss, our Executive Chairman and Interim CEO..

Thank you, Sean, and thanks to all of you for joining us on this call today. As I shared during our fourth quarter conference call update, a few months back, we at TG Therapeutics believe 2014 will prove to be a transformational year for the company, as we clarify our clinical and regulatory strategy for investors.

To that end, we are targeting launching at least one Phase 3 program for either TG-1101 or TGR-1202 or possibly both, before the end of this year.

Prior to commencing our Phase 3 program, we will continue to aggressively enroll in our registration enabling Phase 1 and 2 clinical trials, and report data periodically at relevant medical conferences throughout the year.

As recently reported, the first updates of the year will begin in June and continue at conferences through July, including presenting single-agent data for TG-1101 and TGR-1202 on May 30, during the American Society of Clinical Oncology Meeting or ASCO.

We are excited to learn that the single agent TGR-1202 poster was chosen for Poster Discussion, where a moderator will discuss in further detail a select few of the most promising posters presented at that particular session.

We will also be presenting preliminary data from our ongoing study evaluating the combination of 1101 plus ibrutinib in June, at the European Hematology Association Meeting referred to as EHA.

And lastly, we will be presenting data from our ongoing study of the proprietary combination of TG-1101 plus TGR-1202 in patients with non-Hodgkin lymphoma referred to as NHL and chronic lymphocytic leukemia referred to as CLL in July, during the Pan Pacific Lymphoma Conference in Hawaii.

Together, these conferences provide us an excellent opportunity to update the medical and investment communities on our progress and the emerging activity and safety profile of our drug candidates alone and in combination with each other and other important targeted agents. With that, let me provide an update on TG-1101, followed by one on TGR-1202.

First, as mentioned earlier, at ASCO later this month, we look forward to updating the safety and activity of 1101 in patients with advanced B-cell malignancies, including single-agent effects in CLL and NHL.

As previously reported at ASCO last year, in the dose escalation cohorts, 1101 demonstrated a favorable safety profile with limited Grade 3/4 events as well as an impressive overall response rate in heavily pretreated patients, many of whom had been given multiple lines of Rituxan plus chemotherapy.

Enrollment is now complete in the study, including all expansion cohorts with an excess of 30 patients and more than total. Patients continue to be treated in the maintenance phase and are being followed for safety and efficacy. This multi-center single-agent study, which is being led by Dr.

Owen O'Connor, Director for the Center for Lymphoid Malignancies at Columbia Medical Center, will be presented in a poster on Friday, May 30, during the ASCO meeting. Beyond the single-agent experience, as most of you are aware, we have been aggressively focused on developing TG-1101 as a backbone to multiple combination regimens.

As part of that effort, in December of 2013, we launched two combination studies, 1101 plus ibrutinib, the BTK inhibitor from Pharmacyclics and Johnson; as well as 1101 plus 1202, our proprietary combination therapy. I'll start with an update on the Phase 2 study of 1101 plus ibrutinib.

This study has completed enrollment into the safety run-in cohort with no low DLTs observed in either for the mantle cell lymphoma subgroup or the CLL subgroup. Enrollment has been strong, thanks to the support and leadership of Dr. Jeff Sharman, Medical Director for Hematology Research at U.S.

Oncology, who is leading the CLL enrollment group; and to Dr. Owen O'Connor, who is leading the mantle cell lymphoma subgroup. We are excited to present interim safety and efficacy data at the upcoming EHA meeting in June with final data from the study anticipated to be reported at ASH later this year.

The next combination study I'd like to discuss is Phase 1/2 study of our proprietary combination of 1101 plus 1202, in patients with relapsed/refractory CLL and NHL.

Enrollment continues in both the CLL and NHL patient groups, and we look forward to presenting interim safety and efficacy data for the first time at the upcoming Pan Pacific Lymphoma conference in July. A special thanks to all the investigators involved, especially to Dr.

Susan O'Brien, Professor in the Department of Leukemia at MD Anderson, who is the Study Chair for the CLL patient group; and Dr. Nathan Fowler, the Co-Director of Clinical Research in the Department of Lymphoma at MD Anderson, who is the Study Chair for the NHL patient group. Let me now turn to 1202, and provide a brief update.

First, let me discuss the positive results from our formulation efforts to improve the absorption of TGR-1202. We've been telling investors for the last few months that we plan to explore some minor adjustments to see if we can enhance absorption.

First, we explored the effect of taking TGR-1202 with food as opposed to in the fasting state, which is how we have been dosing in the Phase 1. Next, we explored micronizing TGR-1202, which is simply a process of reducing the particle size. As we reported last week, those efforts were quite successful.

And based on two healthy subject bioequivalence studies in the first quarter, we believe we will see a threefold to fourfold increase in 1202 exposure over previous dose with the improved formulation taken with food. We have now opened the next dose escalation cohort, which is 200 milligrams QD of the micronized formulation in the fed-state.

This dose is expected to achieve blood concentrations approximately equivalent to 600 milligrams to 800 milligrams QD in the fasting state, which based on the preliminary data presented in December at the American Society of Hematology Meeting or ASH, we believe should be active concentration of TGR-1202.

At ASH, we presented data showing that three of four CLL patients treated with the 800 milligram QD dose achieved a nodal response at the first assessment. The fourth patient had a 41% nodal reduction at the first scan, and later went on to become a nodal response.

Prior to switching to the new formulation, we enrolled two expansion cohorts, one at 800 milligrams in the fed-state and one at 1200 milligrams in the fed-state. It's worth noting that no MTD has been reached to date.

As of today, we have now treated over 40 patients in this study, and I'm excited to share that we still have yet to observe any liver abnormalities related to TGR-1202 with some patients now on study for more than 12 months.

1202 has been generally well tolerated through 1200 milligrams, with adverse events, all considered manageable by the investigators. As shared on the last call, in addition to CLL, additional responses have been observed in other lymphoma subtypes.

The company and the investigators alike look forward to the ASCO poster presentation, with oral discussion session on Friday, May 30, in which greater details of the pharmacokinetic, safety and efficacy data of 1202 will be available. As many of you know, ASCO abstracts our release on May 14, 2014.

Those abstracts contain snapshots of data as of early February 2014. More patients with longer follow-up will be reported at the conference. This study is being led by Dr.

Howard Burris at the Sarah Cannon Research Institute and is a three-plus-three dose-escalation study to asses the safety and efficacy of TGR-1202 in patients with select hematological malignancies.

As you can see, we have been very busy preparing for the upcoming data presentations and continue to drive enrollment into our clinical trials, which we believe will set us up for a successful launch of our Phase 2 program before the end of the year.

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

(Operator Instructions) Our first question is from Jonathan Aschoff from Brean Capital..

I was wondering, could you remind us of what else is out there in terms of either other early data for at least ongoing studies with other CD20 and 3K delta combination therapy?.

So to our knowledge there has been a study of Rituxan plus idelalisib, that's complete. That was reported at ASH last year. My understanding is that there is a combination of Rituxan plus ibrutinib that is ongoing, so not really PI3K delta, but along the same path way.

And I believe that that there was some early data on rituximab plus ibrutinib that was reported a year or so ago, year-and-a-half ago. I think those are the studies that I am aware of. There may also be a study of idelalisib also, but I'm not sure where that stands at this point..

The next question is from Matt Kaplan of Ladenburg Thalmann..

Couple of questions. First, congrats, I guess on getting the reformulation done.

Could you talk a little bit about the mechanics of incorporating the new formulations of your ongoing trials, how that will work?.

It's a pretty seamless transition Matt, since it's not really technically a change to the formulation. We're just changing the particle size. We were able to basically bring the new formulation straight into the clinic with no further delay.

We've already dosed patients or at least with the patients or maybe patients within that with the new micronized in the fed-state at the 200 milligram level. So it's pretty seamless. In the end what we're focusing on is exposure levels now and comparing exposure levels.

So the 200 milligram dose, it gives us exposure levels, pretty much one dose below, where we left off. So we think it should be about 600 milligrams to 800 milligrams. And then we'll dose escalate from there up to 400, that should give us exposure that's pretty comparable to 1200.

And then anything above that will basically be dose escalation or further dose escalation. Again that's based on the projections of threefold to fourfold increase in exposure using the new micronized tablet. So there is really no delay. There's not a lot to do. We really didn't do anything major. I think we've describe these as minor tweaks in the past.

One was, again, going from fasting to fed-dosing. Again, it doesn't require too much other than understanding what the differences are. And we were able to complete the human healthy volunteer studies, all during the first quarter. So, yes, it's pretty seamless. No delay.

Patients continue to be treated in our combination trials and we didn't have to stop anybody. And again, I think all of the doses we're using are active.

We're really just, in our view, kind of exploring the upper limit of exposure and what happens to increase activity or have we all -- in terms of all the deltas, have we at the levels that we're treating and we reach sort of a plateauing effect.

Again, this is an early thesis of ours that if we could increase the exposure, could we increase the activity. I think as far as I could tell, we're the only PI3K delta that has the pharmacokinetic and safety profile that permits testing those higher exposure levels. So we're going to do it.

But in the meantime, all accommodation studies are moving forward with active doses of PI3K delta and we're going to leverage this to be able to push the exposure. And again, just test that hypothesis, whether we can enhance activity by increasing exposure..

I guess, with that being said, when do you think you'll arrive at your final phase to using your potential, I guess pivotal studies that you could launch with this or 1101 through this year..

We haven't been very specific about the trials we're running, pretty broad Phase 2 trials across both with the combination or proprietary combination across NHL and CLL. We're running very nice study of 1101 plus ibrutinib. So I think we're going to really have to wait till we are closer to the end of the year to make a final decision.

I think it's going to be a combination of data that we've derived from those clinical trials, again some taste of which we'll start to see at this summer and more of which we'll get at later this year at ASH and combining that with a clinical trial, sort of feasibility, what makes the most sense and how that overlaps with regulatory.

So we've got a little bit of work to figure out. We've got a lot of good options in front of us. We're spending a lot of time working through those.

And again, a lot of us are going be looking at the data, looking at the clinical trial options and how they will be conducted logistically and the feasibility of those and how those overlap with, how the regulatory will play out for us.

So we feel very good that we will have one or more of those opportunities available to us as we get to second half in later in the year. But I think this is too early for us to basically put a stake a in the ground and say this is the approach we're taking..

And then in terms of, you mentioned in your prepared remarks with respect to a snapshot coming out tomorrow evening with respect to the abstracts that you're going to present that at ASCO.

How many patients worth of data will you be presenting? And I guess, what's the delta between the abstracts and the actual presentation at ASCO in terms of number of patients?.

I think in terms of the CD20, I think the good portion of it will be in the abstract as that study was completed. So that's a, what I call a near final presentation, and the enrollment is compete, and had been complete in time.

So there will be updated information from the abstract that will be in terms of our durability and that kind of stuff, but I think probably every patient there was probably available for response when we put in that abstract.

For the delta that has been a moving target, we keep adding patients and we've got a rolling period of time where we are following patients for response.

Little different than CD20, where most of the responses for CD20 occur on the first scan, sometimes on second scan, but it's more of an immediate reaction to the drug as we know, with other PI3K deltas and PI3K inhibitors the responses get better overtime. So as we continue to scan patients where we learn more and more and we see more and more.

So I think the abstract, I think it will have a lot more at the presentation, at the poster discussion around that than you'll find in the abstract, but I think there is pretty good amount of information in abstracts as well..

And then a couple of final questions. With respect to the combination data that you're going to present I guess in middle of June and July.

What's the quantity in terms of number of patients that we should expect there?.

We're projecting about five to 10 patients of efficacy for each of those trials and probably almost double that for safety. So we'll be reasonably early on in their assessments. The patients that are there for efficacy will have one scan, maybe a few or a handful will have two scans, and then they will have a lot more for safety.

So it's a good taste sort of give a little information that we have that we'll put it all out there and then by the end of the year, we should have 20-25 minimum for each of those trials for both safety and efficacy with some duration of effect.

So I think the early data will be a good signal of what's going, certainly the ability to combine 1101 plus ibrutinib and 1101 plus 1202 will start to emerge from the early data and also I think the activity profile will start to emerge as well.

Again, when you think about responses to ibrutinib on the first cycle, two responses to ibrutinib or probably about 20%, 25% at the first scan, so I think we'll start to emerge as something different than that, even early on..

The next question is from Graig Suvannavejh of MLV & Co..

Just several questions, just coming out of AACR, where there is always a lot of data, lot of new stuff that everyone is seeing for the first time.

Was there anything that you saw in terms of maybe what the competition is doing that makes you feel different about, with the strategy, with your assets on a go forward basis?.

No. I mean we didn't see anything that was troubling, concerning, taught us anything about our strategy. We've been so you unifocused on combinations.

I think the only thing, I don't know if it was out of a ACCR or just generally, the more we learn and the more we see around us and the fields, the more we are committed to the combinations, as the right approach. But I don't think there is anything out of AACR that troubled us, concerned us or made us think about changing our strategy..

And if I could shift just to the data that you'll be presenting at EHA, which will be very interesting, given the combination with ibrutinib, what should our expectations be in terms of what should we'd be looking for if there are any -- how do you want to characterize it?.

I mean, we are dealing with small patient numbers. So that's always hard to predict what's going to happen.

I think if we're presenting a 100 patients I would could pretty much feel comfortable what exactly we'll be presenting, but given the small patient numbers and the fact that I actually don't know any of the data, my going-in assumption is that we're going to increase the response rate over what one would normally expect to see, probably dramatically over what one might expect to see, when giving ibrutinib as a single-agent.

And if you think about first evaluation for ibrutinib, true response rate is about 20% or 25% in that.

And then on top of that you've got probably 40%-plus that have achieved at that point -- 40%, 45% that we've achieved in nodal response, so probably combined 60% to 65%, I think at that point or maybe a little bit lower, quite a little bit low or actually even.

So if you think about those numbers, we certainly think we can I think in almost every instance take a patient that is response rate below and obviously that makes it pretty easy, they already got the response, but plus any of those early patients that have nodal responses, we could take them pretty quickly whether it's first or second scan to proper response.

The question, we don't have an answer to it yet, and there will be soon to see when it gets presented in some of the reasons why we would do these experiment is, ibrutinib is going to push a lot of tumor into the peripheral and the question is, is our drug good enough to clean that up as quickly as ibrutinib can put it out.

And so that's an open question, I'm looking forward to an answer as well. We've shown that in patients who just have high levels of circulating tumor, within one or two doses were able to clear pretty effectively. So again, with the combination, can we do that as well? So we'll see.

I think we would be quite disappointed if we didn't show a clear differential to the first scan results that you'd get with ibrutinib alone. And I think as ibrutinib response grows so will the response of the combination, but I think at first scan we should be significantly higher than them in response.

And again, like I said, I think that will grow as their responses grow. Although again, we don't have the data, but that's, I think our expectation what we'd expect to see..

And then just two quick questions.

One, just around some of the data you've presented at AACR, some very interesting data around the 1202 combination with Adcetris, and so if I could just get a sense of what the current strategy in terms of timing of planning an actual trial in that? And then second, this is a question more for Sean, just on the model itself, the numbers for the quarter came in a little higher than what we were expecting and maybe we're just off in our modeling, but just on a go forward basis, how should we think about R&D and SG&A as the rest of the year progresses?.

I'll let Sean answer first and then I'll circle back with the answer on that, rituximab..

So I think as we go forward through rest of the year, SG&A we expect to remain pretty flat as to where it was the first quarter. And R&D will certainly ramp up a little bit over the course of the year. Some of that will be dependent upon how many of studies we get going, specifically the Phase 3 programs that Mike alluded to.

If it is more than one that will certainly impact the burn towards the fourth quarter. But we do expect a little bit of a ramp in R&D, specifically in the third and fourth quarter..

Greg, regarding rituximab, there has been some interesting preclinical reports of activity to gather synergy of our PI3K delta with rituximab. We're evaluating the possibility of doing a combination trial there. We are also looking at single-agent activity for our drug in Hodgkins to confirm activity there as well.

So I think gather the pieces, it's similar to my answer to Matt's question about registration strategies, it's hard to know when we're early on and we're gathering data and we try to learn more about our drug, so it's definitely something we're looking into. The preclinical data was certainly tantalizing to us and interesting us.

But I think it's just too early to, again get too excited about it. I think as we have more information we'll be able to make a better assessment, if that's a interesting or important strategy for us..

And the next question is from Joe Pantginis of ROTH Capital Partners..

Couple of quick questions, first on 1202.

Mike, can you characterize any potential impact on any differences to the complexities of the manufacturing process and any changes in projected COGS?.

Zero and zero. I think none and zero is probably better..

None and zero, that's good. That's what I figured, just wanted to make sure. And then, just want to make sure with regarding of the ongoing study.

Are you completely away from using the non-micronized formulation now?.

We still have patients on the 1200 milligram set dose, which is still being used in the clinical trials, until we get to exposure levels, we won't swap anyone out of that, until we get to a exposure levels that we're comfortable or comparable to that dose level..

And then, switching over to a 1101, as Gazyva has been in the market longer from the last call, and you're looking at the differentiation of your drug as well, especially with data already presented from Dr.

O'Connor, but how would you say the landscape of interest with regard to these differentiated anti-CD20s has been evolving?.

I mean our impression is that the doctors are becoming more and more convinced that the glycoengineered CD20s are superior to the first generation. Certainly in CLL, I think you see it across our trials and Gazyva trials that the response rates are just higher than you'd expect to see with Rituxan.

And for Gazyva, specifically I mean they've run the definitive trial, they've proven that they have more activity and they've improved PFS over Rituxan. So I think in general there believes to be a class effect that the glycoengineered compounds are better. We've got a lot of good feedback from investigators.

I think the nicest part about having work very with lot of these investigators in the past we get a lot of good feedback and understanding of where we sit with respect to Gazyva. I think, one, again, I think people are impressed with this activity over Rituxan. I think people are also impressed with our drugs activity.

I'd say we got a lot of good feedback on our drugs activity to toxicity profile and ease of use. I think some of the important points besides the fact that people perceive the drug to be working much better than Rituxan.

And again, we haven't done the head-to-head yet, but certainly in the hands of physicians, they get a good feel for the activity level. But we also get very good feedback on infusion times.

Our drug, we reported last year at ASCO by the third infusion, most patients are getting the infusions in 90 minutes, understanding that Gazyva is a three hour infusion, pretty much straight on through. Also Gazyva, on the first dose there is some risk of major infusion related reactions, some doctors are very concerned about that.

And again, with ublituximab, which is not a glycoengineered, but it's definitely a second generation or improved anti-CD20, again very long infusion times with infusion rate of reaction liability that persists. So we think that the field is moving beyond Rituxan.

We think that the glycoengineered CD20 is our probably the most advanced in terms of data versus Rituxan. So we feel very good about where we stand. And again, I think our product profile really stacks up nicely against the others..

Ladies and gentlemen, that is all the time that we have for questions. I would like to turn the floor back over to Mr. Weiss for any closing remarks..

Thank you. And thanks, everyone, again. As you can see, we've really been accelerating our planned combination trials for both 1101 and 1202 and very excited to showcase some of those early results at the upcoming conferences this summer.

In addition, we are excited to present the single-agent data for 1101 and 1202, both at ASCO, which we and the investigators believe will continue to serve as validation for the potentially best-in-class agents, and which importantly are capable of being combined to offer potentially best-in-class combinations.

We remained focused on defining our clinical and regulatory strategy before yearend with the commencement of one or more Phase 3 trials. On behalf of all of us at TG Therapeutics, we'd like to thank our investigators and their patients as well as our shareholders and investors for the continued support. Thanks again for joining us today.

And have a great day..

Thank you. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. And thank your for your participation..