TG Therapeutics Third Quarter Conference Call - TG THERAPEUTICS INC

Explicit Guidance:

• Full-Year 2026 Global Revenue: Raised to approximately $1 billion, driven by strong Q4 trends.
• Full-Year 2026 U.S. BrionV Net Revenue: Raised to a range of $915–$920 million (previously $890–$905 million), reflecting >$260 million in projected Q4 revenue.
• Full-Year 2026 Operating Expenses (R&D + SG&A): Excluding stock-based compensation, expected to remain in the range of $450–$500 million, inclusive of subcutaneous manufacturing and secondary source startup activities.
• Share Repurchases: No specific future targets announced; however, the company noted a $100 million repurchase in Q3 2026 and continues a program returning capital to shareholders while investing in growth.

Business-Segment Outlook:

• IV BrionV (Multiple Sclerosis): Expects growth driven by new patient starts and switching from competitors. Sees the simplified single-dose initiation regimen (combining Day 1 and Day 15 doses) as a key growth driver for the IV business, with potential market lift expected in the second half of 2027 following mid-2027 approval.
• Subcutaneous BrionV (Self-Administered): Anticipated to open a multi-billion dollar market segment currently not served by BrionV. Phase 3 top-line results expected year-end or early 2027. Commercial launch targeted for 2028, with an auto-injector device as the planned delivery mechanism. Strategy is to add this to, not replace, the IV business.
• U.S. Sales Milestone: BrionV U.S. net revenue exceeds a $1 billion annualized run rate for the first time in 2026.
• Patient Demographics: Treatment-naive patients now represent ~40% of new starts (up from ~25% at launch), with increased adoption among women aged 18–40.
• Hospital Segment: Projected to continue growing as a durable revenue source, with September and October 2026 being the strongest hospital months since launch.
• New Indications: Phase 2 study ongoing for generalized myasthenia gravis (novel sequencing with FCRN inhibition); exploratory Phase 2 study ongoing for treatment-resistant schizophrenia.
• Pipeline (CAR-T): "Azra Cell" (allogeneic CD19-directed CAR-T) for progressive MS showed early efficacy (90% stable/improved EDSS at day 90); further dose optimization and long-term follow-up ongoing.

Market and Competitive Outlook:

• Competitive Landscape (BTK Inhibitors): Management views the BTK inhibitor class as competing primarily in the oral space for patients who do not choose CD20 therapies. Believes efficacy of current BTK inhibitors (e.g., remibrutinib) falls short of CD20s regarding relapse reduction and MRI outcomes, and notes compliance issues with twice-daily dosing versus biannual IV or quarterly sub-Q options.
• Market Position: Aiming to become the most prescribed anti-CD20 therapy among new MS treatment starts.
• Switching Dynamics: Approximately one-third of new patient starts are switching from other CD20 therapies; this trend is expected to continue despite competitors moving to subcutaneous formulations.
• Differentiation: Emphasis on clinical differentiation (sustained efficacy, lower relapse rates) and convenience (single initiation dose, self-administration) to drive adoption.

Macro / Industry Outlook:

• 340B Policy: Expect minimal impact from 340B pricing policy changes in 2027, as the vast majority of business is commercial; only ~5% of revenue is from Medicare patients at 340B hospitals. Potential scenarios exist where the policy could be slightly positive.
• Pricing & Contracting: No pricing changes associated with the simplified IV initiation dose; no expected changes in pricing dynamics for the subcutaneous launch beyond standard market factors. Believes gross-to-net levels are sustainable through a mix of competitive contracting, price increases, and payer mix management.
• Economy/Interest Rates: No specific commentary on broader macroeconomic conditions, rates, or FX, though the company notes it is building a business with "disciplined execution" to generate long-term returns.

Strategic Initiatives:

• Regulatory Submissions: Advancing regulatory process for the single-dose IV initiation regimen, targeting approval and label update around mid-2027.
• Launch Preparation: Preparing Commercial and CMC readiness for SubQ BrionV launch in 2028.
• Capacity & Manufacturing: Continued investment in subcutaneous manufacturing and secondary source manufacturing (included in full-year OpEx guidance).
• Commercial Infrastructure: Leveraging existing brand awareness, physician network, and commercial infrastructure to support the SubQ launch without building a new organization from scratch.
• IP Strategy: Patent portfolio extends into the mid-2040s, supporting long-term investment in both IV and SubQ formulations.
• Capital Allocation: Commitment to disciplined capital use, balancing R&D/Commercial investment with share repurchases and potential future capital returns.

Risks and Headwinds to Outlook:

• Regulatory Uncertainty: The outlook for the simplified IV regimen and SubQ launch is conditional on FDA approval and successful regulatory review.
• Development Risk: Clinical outcomes for CAR-T (Azra Cell) and new indications (MS, MG, Schizophrenia) remain in early stages; future data could differ from initial findings.
• Competitive Evolution: Continued efforts by competitors to transition patients to subcutaneous formulations and potential shifts in the BTK class, though management believes these are limited in scope.
• Macro/Payer Pressure: Acknowledged potential pressure on gross-to-net ratios from payer mix, government discounts, and contracting over time.
• Implementation Timelines: Even if approved mid-2027, the single-dose initiation regimen is expected to take time to implement across treatment centers, delaying full commercial impact until late 2027/2028.

Management Tone on the Future:

• Confidence Level: High confidence and optimism. Management describes the current stage as "early" relative to the company's total potential, citing the "compelling example" of progress as a foundation for value creation.
• Growth Narrative: Explicitly frames the $1B revenue milestone as a "starting line" rather than a cap. Repeatedly uses terms like "substantial long-term growth potential," "multi-billion dollar opportunity," and "value creation engine."
• Strategic Discipline: Emphasizes a "disciplined" approach to capital allocation and investment, rejecting replacement of the IV franchise in favor of additive growth via SubQ.
• Competitive Stance: Unconcerned about BTK inhibitors; confident that clinical differentiation and convenience will drive market share gains.

Miscellaneous:

• Q&A Highlights: Management confirmed the SubQ launch will utilize an auto-injector device. Confirmed no immediate pricing impact from the new IV dosing regimen. Stated that new patient enrollment momentum is accelerating into Q4.
• Safety Profile: Seven-year data for BrionV shows "unprecedented" freedom from disability progression (88%) and no new safety signals. Early CAR-T data showed no grade 3+ CRS, grade 2+ ICANS, GVHD, or grade 2+ infections.