Greetings, and welcome to the TG Therapeutics Fourth Quarter and Year-End 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Jenna Bosco. Thank you and 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 fourth quarter and year-end 2022 financial results and provide a business update 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 provide an update on our commercialization efforts, and Sean will provide a brief 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, projected regulatory milestones, clinical development plans and expectations 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 subsequent 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..

Great. Thanks, Jenna, and good morning, everyone and thanks for joining us on today’s call.

The fourth quarter of 2022 was a milestone movement for TG as we received FDA approval of BRIUMVI to treat adult patients with relapsing forms of multiple sclerosis, also referred to as RMS, which includes clinically isolated syndrome, relapsing remitting disease, an active secondary progressive disease.

BRIUMVI is now the first and only anti-CD20 monoclonal antibody approved for RMS that can be administered in a one hour fusion twice a year following the starting dose.

This approval was based primarily on the results of the ULTIMATE I & II Phase 3 trials, which demonstrated superiority of BRIUMVI over teriflunomide and significantly reducing the annualized relapse rate, which was the primary endpoint of the studies, as well as the number of T1 Gd-enhancing lesions and the number of new or enlarging T2 lesions.

Two important secondary endpoints, results from the ULTIMATE I & II trials were also published last year in The New England Journal of Medicine, marking another major accomplishment for 2022. I want to take the time to thank the patients, their families, and the healthcare providers who participated in our trials and helped us get to this point.

I also want to thank the entire TG team for their hardworking dedication to making BRIUMVI available to patients. Our Chief Commercialization Officer, Adam Waldman will join us shortly to talk about the early launch phase. But I also wanted to touch briefly on our BRIUMVI launch.

As you can imagine, our team is working hard to introduce BRIUMVI to the MS community. Key to that effort is educating healthcare providers on the data as well as the other attributes of BRIUMVI.

The team has received positive feedback thus far and is excited to continue to work with the MS community to make BRIUMVI available as broadly as possible to RMS patients. As we have discussed in the past, it is estimated that nearly 1 million Americans are living with MS and roughly 75,000 to 80,000 are seeking a new treatment each year.

Our internal research suggests that about half of these patients seeking new treatment are currently being prescribed an anti-CD20 therapy. We are excited that BRIUMVI is now available to these patients as the only anti-CD20 therapy for RMS that is administered as at a one hour infusion twice a year following the starting dose.

We do believe that BRIUMVI can provide an overall enhanced infusion experience for those new to anti-CD20 therapy and also for those currently on the other infused anti-CD20 therapy where infusion times for some patients can be prolonged.

Last week, I was fortunate enough to attend the ACTRIMS Conference in San Diego and had the opportunity to interact with many leading MS healthcare providers at the meeting. It was nice to hear firsthand the enthusiasm many of them had for BRIUMVI entering the market, the overall product profile and differentiation on the product label.

It was also gratifying to hear that patients are already asking for BRIUMVI my name.

I also have been very impressed with our team’s ability to interact with the MS community on all levels, and I know that they’ll continue to work hard to engage with healthcare providers and other stakeholders during the course of this year with the goal of ensuring that all patients who want BRIUMVI, will have access to BRIUMVI.

We continue to be excited by the BRIUMVI profile that we believe brings the power of the anti-CD20 class to patients in a convenient one hour fusion administered twice per year following starting dose at the lowest price of any branded MS treatment.

We believe this profile should provide significant benefits across the entire MS community, including to patients, healthcare providers, medical centers and payers. With that, let me turn the call over to Adam Waldman, our Chief Commercialization Officer to share some thoughts on our early days of launch and commercialization in RMS.

Adam?.

Yes. Thank you, Mike, and good morning, everybody. I’m very happy to be able to share a brief update on the launch of BRIUMVI. We’re approximately four weeks post-drug availability, so it’s still quite early, but I’m excited to share some initial insights and color around our progress and the reaction we’ve been seeing at BRIUMVI in the MS community.

Excuse me. Since approval, our teams have been laser focused on executing our strategic launch objectives of building awareness, driving utilization at our targeted accounts, and minimizing access barriers to BRIUMVI.

We are striving for flawless execution on each of these areas, which we believe will set the foundation for long-term success for BRIUMVI.

We are so far highly encouraged by the initial feedback and enthusiasm we’ve received from a wide variety of stakeholders across the MS community and are confident in the potential of BRIUMVI to make a meaningful difference for patients with RMS.

Raise awareness of BRIUMVI’s profile, we are investing in a mix of both in-person and virtual promotional resources to support our experience field team, while also leveraging peer-to-peer programs, digital marketing, social media, and presence at medical conferences and patient programs to ensure optimal coverage and appropriate education.

In the weeks following our approval, we successfully executed multiple national webcasts with attendance that exceeded all of our internal expectations.

We also have already trained several of the top MS specialists across the country to speak on our behalf and have executed many highly targeted peer-to-peer programs with key healthcare providers in major MS centers since gaining approval.

We are making good early progress and increasing awareness of BRIUMVI throughout the MS community and will continue to increase our efforts here throughout the year. Our sales teams are working on driving adoption and utilization at our high potential targeted accounts.

Our teams have been very effective so far, engaging with our customers to provide education. Their deep networks have allowed them to quickly engage with our initial targeted accounts since approval. Healthcare providers seem eager to meet with us and learn more about the BRIUMVI profile.

In general, the overall feedback on the product label for BRIUMVI has been positive with customers consistently pointing to the perceived advantages of the one-hour infusion, the 24-week dosing schedule, the option of using oral pre-meds and limited post infusion monitoring in patients not experiencing infusion related reactions with the first two infusions.

We also held an advisory board last week at the ACTRIMS Conference with some of the top MS specialists in the country to get their early feedback on the launch.

They emphasized that BRIUMVI was a highly effective option with overall safety profile that is in line with expectations for a CD20 agent and also felt the tolerability profile, the faster infusion, the lack of breast cancer risk in the label, and the lower pricing strategy was differentiated and potentially meaningful for patients.

They also were very complimentary of the early interactions they’ve had with our field-based teams. Based on all the feedback we’ve received so far, we continue to believe there’s significant interest in utilizing BRIUMVI for patients with RMS and many physicians have – that we’ve engaged, have expressed their excitement to start using the product.

We have already seen a flow of patient enrollments at our hub, and in fact, the first patient was infused in Columbus, Ohio on February 1, just four business days after the drug was made – just four business days after the drug was made commercially available. There’s actually a really nice article about this patient and BRIUMVI in USA today.

The early experience reported by the infusion centers has also been very positive so far, which is also highly encouraging. Our teams are highly focused on working to minimize access barriers and achieve optimal patient access to BRIUMVI.

I believe our teams are doing a fantastic job navigating the expected early logistical challenges around obtaining P&T committee approvals, working with accounts on miscellaneous J codes and obtaining coverage for BRIUMVI.

We have built an outstanding patient support program staffed by skilled, dedicated account specific case managers with deep experience in access and reimbursement, offering patients high-touch support throughout the reimbursement process.

As part of this comprehensive program, we provide robust financial assistance program for eligible patients including copay assistance, quick start and coverage interruption programs, and we’re appropriate a program that will provide BRIUMVI at no cost to eligible patients who may have challenging – who may have challenges accessing BRIUMVI.

Today, this team has been very successful working with centers and patients to help BRIUMVI while we continue to work on gaining coverage. Most importantly, we have already secured early payer coverage at several national and regional plans.

In fact, we are ahead of our internal goals and very much on track to meet our goal to have coverage for the majority of covered lives in the U.S. by the first half of the year. I’m very happy to share that we now have coverage policies in place for approximately 35% of covered lives across the U.S.

We are extremely pleased by these early coverage decisions and we believe it validates our pricing strategy and reflects BRIUMVI’s strong clinical profile and value proposition, and of course, the hard work of our payer and national account teams.

It is still very early, but I’m proud of the progress our commercial teams have made across the launch objectives today. We are seeing very positive signs so far that reinforce our confidence about the road ahead.

We look forward to working with providers, patients, payers, and advocates to continue to broaden access to BRIUMVI for patients with relapsing forms of MS.

And given that we’re only a few weeks into the launch and we’ll not go into a lot more detail at this point, but I’m very pleased with where we are to date and look forward to sharing more progress in the next quarterly call.

Sean?.

Thank you, Adam, and thanks everyone for joining us. Earlier this morning, we reported our detailed financial results, which can be viewed on the Investors & Media section of our website.

For today’s call, I’ll begin with our fourth quarter burn, which we are pleased to report came in at approximately $25 million for the quarter, well below our previously guided range. In terms of what that means for our cash position, we ended 2022 with approximately $220 million in cash, cash equivalents and investment securities.

With that total, including $45 million of available capacity under our Hercules facility, which became contractually accessible to us upon the approval of BRIUMVI.

Our GAAP net loss for the fourth quarter of 2022 was approximately $53 million or $0.39 per share, which was down sharply from the comparable quarter in 2021, where we saw a net loss of approximately $93 million or $0.70 per share.

With the decrease driven by our disciplined and focused approach to spending ahead of the BRIUMVI approval last December.

Our $53 million net loss in the fourth quarter of 2022 was an increase of $17 million quarter-over-quarter from Q3 of 2022, where we saw a GAAP net loss of approximately $36 million, which was primarily the result of a one-time milestone payment triggered by the FDA approval of BRIUMVI, which was expensed in Q4 of 2022.

Our GAAP net loss for the year ended December 31, 2022 was $198 million or a $1.46 per share compared to a GAAP net loss for the year ended December 31, 2021 of $348 million or $2.63 per share. The year-over-year decrease in net loss of approximately $150 million, as discussed earlier, is the result of our streamlined and focused efforts in 2022.

In terms of what we expect in the quarters ahead, during 2023, we expect our operating expenses, the exclusive of BRIUMVI inventory build will average approximately $40 million to $50 million per quarter.

And when coupled with relatively modest assumptions on incoming revenue from the launch of BRIUMVI, we feel we are well positioned from a capital standpoint into mid-2024. With that, I will now turn the call back over to the conference operator to begin the Q&A..

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] We have a first question from the line of Eric Joseph with JPMorgan. Please go ahead..

Hi. This is Noah on for Eric. Thanks for taking our question. Just a quick one from us. How have the discussions been going with dedicated fusion centers versus those in hospitals to zip the access to BRIUMVI is vastly different at this stage given the pre J code nature of the launch in the two settings of infusion centers versus hospitals..

Adam, you want to go ahead and answer that one?.

Yes. So I think – if I understood the question about the J code, I’m not sure there’s a difference between academic and the infusion centers. I believe, it’s the same issue across both.

I think the obstacle at the academic centers is just getting on formulary and institutional formularies, whereas the independent centers are more of a streamlined process. So we’re seeing earlier access there than we are seeing at the academic centers where there’s a formulary process to go through..

Great. Thank you..

Thank you. We’ll take the next question from the line of Josh Schimmer with Evercore ISI. Please go ahead..

Thanks for taking the questions.

So for patients who are switching from other anti-CD20 antibody therapy, do they need to go through the same initial dosing protocols or is there an opportunity to move right to the one hour infusion or are there any studies that are contemplated to enable that? And then on the 2023 quarterly OpEx guidance, just confirming that was GAAP and non-GAAP? Thank you..

Sure. Thanks, Josh. Yes. So as per label, folks switching over, we’ll go through the four-hour starting dose. We do have a switch study that we’re printing together that should launch soon to perhaps educate folks on whether that is necessary.

But as per label right now, and I assume for some period of time, the rule would be go through the four-hour infusion.

Sean, do you have coming on the OpEx?.

Yes. Sure. On the OpEx side, that is a GAAP number, but it excludes non-cash compensation..

And then to follow-up, Mike, if patients do have to go through those first two infusions, including a four-hour infusion, do you see that being an obstacle to switch it?.

So far, that does not appear to be an obstacle. I think early indications are that the folks are perfectly comfortable switching from one to the other and using the four-hour fusion. I mean, we – again, we’ve heard chatter that people would love to just skip the dose, but it doesn’t seem to be an issue and it certainly at the early days here.

Remember, a lot of these folks that are switching over from OCREVUS are still on four-hour infusions plus one hour before, one hour after, and a lot of them are still even having trouble getting into four hours. So it’s a little bit of investment in one extra dose, no doubt.

And if we can run a trial that could help people understand the risks of skipping that dose we’re going to do that. And that’s on the way. We think, we’ll have those results relatively quickly once we get that trial started, which is – and I guess, about three months away from commencing. But you’re looking at a one dose trial essentially.

I mean, the study will have more in it, but that piece of information will be understood early and we can get that out into a conference setting. Again, we won’t be, obviously, pitching that as something, but we are worried that folks will try to do to get the four-hour, and we just want to make sure it’s safe just in case.

And if it’s not, make sure we get that data out there to educate folks that that’s not a good idea, if in fact that’s a problem..

Would that lead to a potential label amendment as well to include simplified transition dosing?.

It’s possible. We can – we’ve talked about that internally and we’re trying to see if that would be possible, but I couldn’t promise that today..

Okay. Got it. Thanks very much..

Thank you. We’ll take next question from the line of Ed White with H. C. Wainwright. Please go ahead..

Good morning. Thanks for taking my questions. So I was just wondering if you can give us perhaps an idea of the percentage of patients currently on drugs that are taking advantage of the patient assistance programs.

And how should we be thinking about the number of patients or percentage of patients on the free drug programs perhaps in the first half of this year versus the second half?.

Yes.

Adam, you want to go ahead that one?.

Yes. Ed, I don’t have precise numbers in front of me. It’s still pretty early. We do – what I can say is that – we do expect a higher percent of free goods in the first half of the year and a higher engagement with our programs in the first half of the year as we continue to work through the coverage issues.

We’re making good progress, as I mentioned gaining coverage, but it’s still a process. And so we expect a higher percentage in the beginning of the year and that should decrease over time..

Okay. Thanks, Adam. And just a question on your sales force.

Is your sales force right size now or do you expect to be adding to your footprint?.

Yes. We feel good about where we are right now. Of course, we will continue to monitor and see what we need as we kind of continue to engage. I would say it’s an – it’s something that we would consider if we felt that would help us, but right now we feel like we’re right size for the opportunity and where we’re focused..

Yes, I’ll just add to that, Ed, at ACTRIMS, I had a chance to meet with our two business managers that had the east and west coast business and ask them that same question, and everyone feels very comfortable with the size of the team right now..

Great, thanks Mike. And my last question, if I may, I always ask this, but can you give us an update on Europe, what you expect the timing will be the six to nine months behind and any thoughts on strategy there? Thanks..

Yes. Thanks, Ed. Appreciate you always asking that question for us. Yes, so nothing has changed. We’re still feeling that we’re about 69 months behind in total time from the approval in the U.S. and in terms of strategy, we’re still working hard to identify whether we want to a partner or do it ourselves.

We have a little bit of time here, but we’re getting close, probably have some more to say after we have our quarterly conference call, which I assume will be in May timeframe, the first quarter call. So we’ll keep you posted on that, but stay tuned..

Great. Thanks for taking my questions..

Thanks, Ed..

Thank you. We’ll take a next question from the line of Prakhar Agrawal with Cantor Fitzgerald. Please go ahead..

Hi, good morning, everyone, and thanks for taking my questions.

So number one, until the ASP is established for BRIUMVI, are there specific MS center types that might find it economically more attractive to use BRIUMVI over approval, or do you think that it the discounts may not be meaningful enough? You had a couple of follow-ups?.

Adam, did you get that?.

Yes. I mean we think that for BRIUMVI, there is a good economic story in advance of ASP, but even when we have ASP, we feel good about where we are with the pricing strategy and how physicians will be reimbursed.

So in the early stage, I’m trying to understand your question about the ASP – not that I’m aware of that there would be a in advance of ASP, there would be an economic advantage..

Okay. And on the – of the patients who have been treated so far, fully recognizing it’s only four weeks, if you could provide more details on the profile of these patients, are these treatment naïve or mostly switching patients? And it seems that you’re seeing some switches from OCREVUS, but any color you could provide would be helpful..

Mike, you want me to take that question?.

Yes. Go ahead..

Okay. Yes. We’re seeing both, right? We’re seeing some switches from CD20. We’re seeing switches from Tysabri, we’re seeing newly diagnosed so we’re seeing an array of patient types at this point. But it’s of course, still early, but we’re encouraged that we’re seeing all types of patients come up..

Okay. Thank you very much..

Thank you. We take a next question from the line of Mayank Mamtani with B. Riley Securities. Please go ahead..

Hi, good morning, team. This is Sahil Kazmi on for Mayank. Thanks for the really comprehensive update here, and congrats on the early launch metrics. Just one question, I know there’s a switching study that’s going to get started here in the background.

Can you also help us understand what might be sort of the internal decision tree to consider investing behind higher dose subcutaneous or perhaps even expanding into the primary setting?.

Sure. So higher dose subcu, sounds like things that our competitors are doing to try to compete with us and primary progressive, okay. So like higher dose, we certainly don’t need a higher dose.

I think it’s very clear to us that our competitor has chosen to a higher dose study to try to compete with our more efficient glycoengineered anti-CD20 monoclonal antibody. So there’s nothing for us to do there. We’re already in theory the highest dose because of our ability to deplete these cells at the most efficient rate.

So I don’t see any reason we’d want to do that. I think their efforts in that area are fantastic for us.

I think it shows, one, the insight that shows me whether it’s true or not is that they believe that our data probably is better than theirs, and they need a higher dose to try to compete in a way that can compare to what we’ve seen in our clinical trials.

Again in a cross-trial comparison, our ARR is just significantly lower, and I think that’s what they’re trying to go for. So we’ll see what – how that turns out for them. But I think that’ll be a extremely long infusion.

And then subcu from that standpoint, we feel that the subcu competition is in the main part is not our business model, right? So if we have – there’s two markets here, right? I think it’s pretty clear the two markets have developed.

Some patients do want to do a subcu, and for those patients right now, there’s only one option but it appears that the other IV drug is looking to turn that into a subcu to compete in that portion of the market. So it sounds like they’re going to have an IV competitor to us, and they’re going to have a subcu to the subcu product.

So we are evaluating whether we can come up with a better product for the subcu marketplace and then we know what that’s going to cost. If we do a subcu it’s going to cost us the $80 million to $100 million. So that’s again something we’ll have to consider. And you asked about whether it makes sense to do that investment.

We’re doing the research now and the numbers to see, but first step is we’re doing an evaluation of rituximab, BRIUMVI to see if it – what the format of that subcu would look like. So again, I think we’re at the early stages of understanding that, and we’ll see how the two markets evolve.

And I think the same thing goes for PPMS, right? It’s – we know that it’s going to cost somewhere in the order of $80 million to $100 million, and we’re just not sure that that all market participants view PPMS as a distinct indication from relapsing forms of MS.

So I think that’s something whether there’s really a full sum market there for us to invest into the folks who have studied the subcu and have approval subcu have also chosen not to run that study at this point.

So I think there’s probably good reasons not to do it, but we’re evaluating that certainly we can consider doing some smaller studies just to understand the capabilities of our glycoengineered more efficient CD20 and PPMS before that helps..

Excellent. No, that’s very helpful. Thank you for that. And then maybe just one more question for Sean.

Could you remind me of the cash position at the end of the quarter and how we should think about the R&D and G&A mix going through 2023?.

The cash position at the end of the current quarter?.

Sorry, at the end of the fourth quarter..

Right. So $220 million, which as we stated in the prepared remarks includes $45 million of available capacity under our facility. And then in terms of the R&D and SG&A mix, the guidance that we provided around OpEx as I said is exclusive of BRIUMVI inventory build. So I think it would be weighted to the SG&A side as opposed to R&D..

Okay. Great. Thanks a lot. Thanks for taking our questions..

Thank you. We take a next question from the line of Matt Kaplan with Ladenburg Thalmann. Please go ahead..

Hi, this is Raymond in for Matt. Thanks for taking our question. Yes. Just congrats on beating our internal goals for coverage.

I just wondering if you could elaborate and how would you think about the access and coverage over the next 12 months to 18 months?.

Adam, you want to go ahead?.

Sure. As we said, our goal is to get the majority of covered lives before the end of the first half of the year. And we’re on track to do that. We feel good about where we are to date. What we said, I think in the past was we want to get to 80% to 90% before the end of the year, which we also feel good about at this point.

And we’ll continue to work through all the processes, but we feel good with where we’re at so far. We feel like it reflects the value proposition of BRIUMVI. And we’re continuing to make progress and we feel good about the goals that, that we set for ourselves..

Thanks for that.

And just to follow-up on that, I guess the J code, the permit J code would be when you estimate you would get that?.

Yes, July 1..

Okay. Cool. Yes. And then I guess just touching on this, you mentioned the switching study, which is very nice. I was wondering is there any other kind of cadence of maybe postmarking studies and trials or registries that might help further flush up the commercial opportunity that you plan or – yes. Thanks..

Yes. We’re looking at a number of additional studies, none that we’re prepared to talk about. And we do have, which is probably available. We do have some post commitment studies that we have to do. So we’ll be working on those as well..

Okay. Thanks..

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session, and I’d now like to turn the floor back over to Mike Weiss for closing comments. Over to you, sir..

Great. Thank you. Excellent. And thanks everyone for joining us this morning. As discussed on today’s call, we believe the initial launch activities are progressing well and in many ways ahead of schedule. We believe these early successes position us for an exciting year of commercial execution.

We believe BRIUMVI add significant value to the treatment landscape in RMS. We remain committed to supporting the MS community. Thanks again to the patients and their families and healthcare providers who worked with us to get us to this point. And we thank everyone for joining the call today. Have a great day..

Thank you. Ladies and gentlemen, this concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation..