TG THERAPEUTICS, INC. The following discussion and analysis contain forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our results could differ materially from the results anticipated by our forward-looking statements as a result of many known or unknown factors, including, but not limited to, those factors discussed in Risk Factors. Additionally, many of these risks and uncertainties are currently elevated by and may or will continue to be elevated by the COVID-19 pandemic. See also the Special Cautionary Notice Regarding Forward-Looking Statements set forth at the beginning of this report.
You should read the following discussion and analysis in conjunction with the
unaudited, condensed, consolidated financial statements and the related
footnotes thereto appearing elsewhere in this report, and in conjunction with
management's discussion and analysis and the audited consolidated financial
statements included in our Annual Report on Form 10-K for the year ended
OVERVIEW
UNITY-CLL Phase 3 Trial & Withdrawal of the BLA/sNDA Submission for U2 to Treat Patients with CLL/SLL and Withdrawal of UKONIQ from Sale
UNITY-CLL, a global, Phase 3, randomized, controlled clinical trial, compared
the combination of ublituximab and UKONIQ® (umbralisib) (combination referred to
as U2), to an active control arm of obinutuzumab plus chlorambucil in patients
with both treatment-naïve and relapsed or refractory chronic lymphocytic
leukemia (CLL). The trial met its primary endpoint, and based on those results,
a Biologics License Application (BLA) and supplemental New Drug Application
(sNDA) were submitted to the
As previously disclosed, on
For more information, please refer to our Quarterly Report on Form 10-Q for the
quarter ended
21
Table of Contents
OUR PRODUCTS UNDER DEVELOPMENT
We have leveraged our B-cell platform to develop a drug pipeline of small
molecule kinase inhibitors and intravenously delivered immunotherapies that
leverage the patients' own immune system. In connection with the
Clinical Drug Candidate: Initial Target Disease Stage of Development
(molecular target) (trial name)
Ublituximab (anti-CD20 mAb) Relapsing Forms of Phase 3 trials (ULTIMATE
Multiple Sclerosis (RMS) I and II)
Cosibelimab/TG-1501 B-cell cancers Phase 1 trial
(anti-PDL1 mAb)
TG-1701 (BTK inhibitor) B-cell cancers Phase 1 trial
TG-1801 (anti-CD47/CD19 B-cell cancers Phase 1 trial
bispecific mAb)
Current Phase 3 ULTIMATE Program in Relapsing Forms of Multiple Sclerosis:
ULTIMATE I and ULTIMATE II are two independent Phase 3 trials. Each trial is a
global, randomized, multi-center, double-blinded, double-dummy,
active-controlled study comparing the efficacy and safety/tolerability of
ublituximab (450mg dose administered by one-hour intravenous infusion every 6
months, following a day 1 infusion of 150mg over four hours and a day 15
infusion of 450mg over one hour) versus teriflunomide (14mg oral tablets taken
once daily) in subjects with RMS. These trials were conducted under a special
protocol assessment (SPA) with the FDA. The ULTIMATE I and II trials were led by
In
American Academy of Neurology Annual meeting. Both studies met their primary
? endpoint with ublituximab treatment demonstrating a statistically significant
reduction in annualized relapse rate (ARR) over a 96-week period (p<0.005 in
each trial). Key secondary MRI endpoints were also met. Additional data from
these trials have been presented at various other medical meetings.
On
? as a treatment for patients with RMS and notified the Company that it is not
currently planning to hold an advisory committee meeting to discuss this
application.
On
Fee Act (PDUFA) goal date to
? treatment for patients with RMS, to allow time to review a submission provided
by the Company in response to an FDA information request and which the FDA
deemed a major amendment.
22
Table of Contents
RESULTS OF OPERATIONS
The following table summarizes the results of operations for the three months
ended
Three Months Ended
June 30,
(in thousands) 2022 2021
Product revenue, net $ 556 $ 1,507
License Revenue 38 38
Total Revenue $ 594 $ 1,545
Costs and expenses:
Cost of product revenue 23 148
Research and development:
Noncash compensation 2,328 7,016
Other research and development 24,546 37,855
Total research and development 26,874 44,871
General and administrative:
Noncash compensation (3,304) 9,288
Other selling, general and administrative 15,942 24,729 Total general and administrative
12,638 34,017
Total costs and expenses 39,535 79,036
Interest expense 3,017 1,623
Other income (1,448) (618)
Total other expense, net 1,569 1,005
Net Loss $ (40,510) $ (78,497) Product revenue, net. Product revenue, net for the three months ended
License revenue. License revenue was less than
Cost of Product Revenue. Cost of product revenue for the three months ended
Noncash Compensation Expense (Research and Development). Noncash compensation
expense (research and development) related to equity incentive grants totaled
23
Table of Contents
Other Research and Development Expense. Other research and development expense
decreased for the three months ended
Noncash Compensation Expense (Selling, General and Administrative). Noncash
compensation expense (selling, general and administrative) related to equity
incentive grants totaled
Other Selling, General and Administrative. Other selling, general and
administrative expenses decreased for the three months ended
Interest Expense. Interest expense increased by
Other Income. Other income increased by
24
Table of Contents
The following table summarizes the results of operations for the six months
ended
Six Months Ended
June 30,
(in thousands) 2022 2021
Product revenue, net $ 2,534 $ 2,262
License Revenue 76 76
Total Revenue $ 2,610 $ 2,338
Costs and expenses:
Cost of product revenue 260 288
Research and development:
Noncash compensation 4,223 14,527
Other research and development 70,693 93,438
Total research and development 74,916 107,965
Selling, General and administrative:
Noncash compensation (3,077) 18,395
Other selling, general and administrative 36,324 42,384 Total selling, general and administrative 33,247 60,779
Total costs and expenses 108,423 169,032 Interest expense 5,681 3,521 Other income (1,971) (1,090) Total other expense, net 3,710 2,431 Net Loss$ (109,523) $ (169,125)
Product revenue, net. Product revenue, net for the six months ended
License revenue. License revenue was less than
Cost of Product Revenue. Cost of product revenue for both the six month periods
ended
Noncash Compensation Expense (Research and Development). Noncash compensation
expense (research and development) related to equity incentive grants totaled
25
Table of Contents
Other Research and Development Expense. Other research and development expense
decreased for the six months ended
Noncash Compensation Expense (Selling, General and Administrative). Noncash
compensation expense (selling, general and administrative) related to equity
incentive grants totaled
Other Selling, General and Administrative. Other selling, general and
administrative expenses decreased for the six months ended
Interest Expense. Interest expense increased by
Other Income. Other income increased by
LIQUIDITY AND CAPITAL RESOURCES
Our major sources of cash have been proceeds from private placement and public offering of equity securities, and from our loan and security agreements executed with Hercules Capital, Inc. (Hercules) (see Note 6 for more information). Since inception, we have incurred significant operating losses. Substantially all our operating losses have resulted from costs incurred in connection with our research and development programs and from selling, general and administrative costs associated with our operations, including our commercialization activities. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Because we have withdrawn UKONIQ (umbralisib) from sale, we have no marketed products currently. We expect to continue to incur significant research and development expenses and we expect to continue to incur significant commercialization and outsourced-manufacturing expenses as we plan for the possible commercialization of ublituximab in RMS.
We evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year beyond the filing of this Quarterly Report on Form 10-Q.
As of
26
Table of Contents
The actual amount of cash that we will need to operate is subject to many factors, including, but not limited to, the costs and timing of clinical and commercial manufacturing supply arrangements for each product and product candidate, and the costs of expanding our sales, distribution and other commercialization capabilities. Because of the numerous risks and uncertainties associated with developing pharmaceuticals, we are unable to predict when we will become profitable, if at all. Even if we do become profitable, we may not be able to sustain or increase our profitability on a quarterly or annual basis. Our ability to become profitable depends upon our ability to generate substantial revenue. We are dependent upon significant future financing to provide the cash necessary to execute our long-term operations. However, the Company cannot be certain that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to the Company or its existing stockholders.
Discussion of Cash Flows
The following table summarizes our cash flows for the six months endedJune 30, 2022 and 2021: Six Months Ended June 30, (in thousands) 2022 2021
Net cash used in operating activities
Cash used in operating activities for the six months ended
Net cash used in investing activities for the six months ended
Net cash used in financing activities for the six months ended
27
Table of Contents
OFF-BALANCE SHEET ARRANGEMENTS
We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.
CRITICAL ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
A critical accounting policy is one that is both important to the portrayal of our financial condition and results of operation and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. For a description of our significant accounting policies, refer to "Part II, Item 8. Financial Statements and Supplementary Data, Note 1 - Organization and Summary of Significant Accounting Policies" in our 2021 Annual Report on Form 10-K. Of these policies, the following are considered critical to an understanding of our Unaudited Condensed Consolidated Financial Statements as they require the application of the most difficult, subjective and complex judgments: stock-based compensation expenses, and fair value measurement of financial liabilities. Refer to "Note 2 - Revenue Recognition", "Note 4 - Fair Value Measurements" and "Note 5 - Stockholders' Equity" respectively, for more information.
28
Table of Contents
© Edgar Online, source
