Everyone, thanks for joining us here for the afternoon of Tuesday of the Goldman Sachs Global Healthcare Conference. We're pleased to be joined today by Mike Weiss from TG Therapeutics. Maybe, perhaps, I'll just kick it off to you for an overview of the company. I think it's always helpful to kind of level set there.
Yeah, sure. So TG was founded in 2012 with a mission to advance therapies for B-cell diseases. We've remained quite true to that original mission. And right now, we have our first drug approved for multiple sclerosis. It's called BRIUMVI. It's approved for relapsing forms of MS. We've announced our target revenues for this year, $270 million-$290 million. And we have some stuff in the pipeline, which I'm sure we'll chat about. But it's a relatively simple story. This 2024 will be our first full year of launch. And then we've got we announced not that long ago, we have patents till 2042. So we've got a pretty long runway to build upon BRIUMVI.
Yeah. So the BRIUMVI, as you mentioned, has been on market for, I think, almost 18 months now. It's on pace, as you mentioned, for $270 million-$290 million in revenue this year. I guess, talk to us about some of the specifics around what you've seen in terms of market adoption, where you're seeing patients come from, et cetera.
Yeah. So there's two ways to take that question. One is the types of patients that come onto the drug. But you could also, but probably more importantly, is where they come from, sort of the treating centers. So, in terms of where, so let's start with the patient's profile. If we just look at whether they're naive to all treatment or naive to CD20 or they're coming from another CD20, the distribution is actually quite balanced. It's not exact, I'd say. So the naive to treatment and the crossover from another CD20 are reasonably equivalent. And then just a little bit higher, but not much higher, is the naive to CD20, so coming from another treatment. So relatively balanced. We're seeing good uptake across all those different categories.
I'd say probably the bigger differential at the launch stage has been what type of center that the patients are coming from. And so what we've seen, and it's sort of migrating. If you just look at the market itself, about 60% of patients are treated in the hospital setting and about 40% in the community setting. And when we launched, we kind of were upside down in that. So about 60% were coming from the community and 40% from the hospital. And that pretty quickly is adjusting itself. We're probably right now about 50/50 between the two groups. And we assume in the next 12 months or so, that'll probably mirror the market itself.
Yeah. So I guess, kind of following along those points, where have you seen kind of the easiest, lowest hanging fruit in terms of patients? And how far penetrated into that population would you say you are at this point?
Yeah. So the community was the easiest because when you look at except for the J-code. So some of them care about the J-code. Some of them didn't care about the J-code. The ones who did care was a six-month block. But in terms of internal formulary and processes, the bureaucracies are some of the largest.
Less friction.
Lots of less friction. So that was the easier place to get going. And then the institutions, some were up very quickly, and some are still not up. So it's a varied level of friction. But I'd say that was probably the biggest friction part, is just getting through the formulary process at some of these larger institutions.
I guess, where do we stand today? Are we kind of through the bulk of that and ready to run?
Yeah. I'd say we're through the bulk of that. There's still a few stragglers, but yeah, we're through the bulk of it at this point.
So then as you look at what the key drivers have been of the adoption you've seen to date, are there any things you would call out that have been particularly robust for you?
I mean, in terms of the profile of the drug itself, clearly, the one-hour infusion and the convenience and the tolerability or the predictability of that one-hour infusion was really, I think, probably an early driver, particularly in the community. As we've started penetrating the academic centers, I'd say it's more the profile, the overall profile, including the safety and efficacy of the compound itself. Those folks, while we were also sort of spending a lot of effort on the logistics of those centers, a lot of them were like, "Well, what's the differentiation? I'm not so sure. Should I care about one hour?" Right? So as you can see this shift in the business, I think they are getting to understand the differentiation.
I think one of the questions I like to ask folks is, "Why do you think it's possible if all CD20s are the same, why do you think it's possible to give BRIUMVI in an hour infusion that's 95%-96% on time?" And Ocrevus, you can barely give to 25%, maybe 30% of the patients in two hours. And the rest and even the ones that are getting it, the predictability of what's going to happen, how long it's going to take. So there obviously can't be the same compound, right? So that starts the conversation about the differentiation. It leads to probably differences in how the drugs kill B cells and how they engage with the NK cells in the system. So I think all of those things are starting to really take hold in the academic centers.
It's like, "Oh, yeah, they're not the same." And then the other piece, which is really interesting, is maybe you get an academic center that says, "Well, I'm just going to use it for patients that maybe have some issues on Ocrevus and see if I can get a better outcome." And then we start to see those folks using it more and more because the anecdotes come in. We can obviously not randomize testing of this kind of thing. But patients who are either experiencing a wearing-off effect, affectionately referred to as the crap gap, or are repleting more quickly, or just are really not having a fun time, we seem to get really good feedback that the patients are doing quite well.
So then I guess when you think about the physicians that have prescribed at least once, could you help us? I know you've shared these data, but the quantification around how many physicians have shared it, and then the depth that you kind of see as potentially driving growth on the forward.
Yeah. So I think in terms of depth and breadth, so the interesting part about the breadth, and we had a brief chat just now about, are we almost through all of the centers and getting them up and running? So yeah, I mean, I think of our targets, we're probably 85% or so to targets. And then there's still other sites. But if you look at that, you say, "Okay, we've got good breadth." But there's a second level of breadth that's, I think, important, right? So if you look at having a center open and picking one of the larger centers, they probably have 25-30 prescribers, right? So just saying that this university is open doesn't mean that you've got breadth within that institution yet. Before we start talking about depth on a per-physician basis, right? So we have a ton more breadth to go.
And then, yes, we want to drive depth, of course. We want our favorite clinicians are obviously the ones who they use BRIUMVI for all their new patients. And they are the ones who are most likely to switch patients. Obviously, that's where we'd like everyone to be. I don't think we're going to quite get there, but we'll do our best.
In terms of compliance and adherence, I guess, obviously, it's a bit early for many of these patients, but what can you share knowing?
Yeah. We don't have much information. The feedback I get from the team is that we're looking relatively in line for the moment, although very limited data with what's seen publicly with Ocrevus, which we share publicly.
Okay. As you think about the guidance range that you provided, kind of almost to $300 million, what are the puts and takes that are informing that guidance? And what could drive you kind of to the upper or the lower end of the range?
Yeah. So it'll be continued. The biggest give and take, pull and take, whatever the term is.
Yeah, puts and takes.
Puts and takes, puts and takes, is going to be just the number of patients that enroll, that get prescribed the drug. The one thing that we share with folks is the enrollments to our hub, which is the only number we can track, right? So when a clinician writes a prescription, they have two choices. They can just put the prescription into the system, and they'll pull the drug from a shelf, or they'll have it ordered, and everything happens as normal. And we don't see that prescription. And we think this is about 80%-85% of the time, so most of the time, they will take the prescription, they'll send it to our hub services. So then we know that the prescription is right. And then they put it through the same system, and they get it delivered.
So it doesn't have anything to do with the delivery of drug or distribution at all. It's purely they let us know because they either want us to help them in some way with the starting of the patient, or they want us to provide copay support. So what's interesting is, more likely than not, a community center will use the hub services. So our capture rate, so when we say, I think last quarter, we said we had 1,250 patient prescriptions go to the hub. That's what we know. And we assume that either 10% or 15% more patients were prescribed. And that capture rate for us is going to go down.
As more academics.
Thank you. Yes, exactly. But still, to your first question, it's still the only number that I have that I know. And it is the one that will drive revenues. And then there's going to be also the persistence question that you asked. So far, it seems like it's right in the range of what we want it to be. But yes, if it went in one direction or the other dramatically, that could change. There's gross-to-net, which has been pretty stable. But if something were to go wrong with gross-to-net, it could go down at the lower end or short if we end up with just a little bit higher.
Okay. And in terms of what you would expect, because obviously, as we get for a period of time, become a big portion of kind of the base of that revenue, what would we expect to see from adherence compliance, right?
Yeah. So the data on median time on drug, 5-6 years on drug. So we would hope that that would be the case. The biggest drop-off is from the first dose to the 24-week dose. And again, I think published data on Ocrevus is about 85%. And again, that's what we're targeting. So like I said, so far, we feel like we're pretty good on that. So if that stays in line, yeah. And to your point, which is interesting, I think one thing that some people don't fully get, but clearly you do, is that at some point, whether it's three years, four years, or five years from now, the new start patients, which is the vast majority of the business that we present today, is really just the top of it. The recurrent patient is the vast majority.
We'll start a year knowing about 80% of our revenue, 90%. Then it's what can we do in new starts during that year. That's a few years out still.
Right. Okay. In terms of specific or salesforce plans, anything to note in terms?
We've been continuing to grow our sales presence. We always said we had a target group of centers when we started. We hired basically a force that we felt was the right size for those centers. We always knew we were going to basically just sort of slowly creep our sales force up as we expanded our target audience. That will continue. I mean, I think since launch, we've probably added, let's say we started with approximately 100, 110, and we've probably added 25 people since then. My guess is over the course of the year, we'll probably add another 10, 20 people, whatever. So there's definitely going to continue to be a very targeted approach to how we're hiring these folks.
Yeah. Given the incremental nature of how you're adding sales force, do you expect to see any sort of lags or friction in terms of sales force productivity? I know when you add a group, you can see that sometimes.
Yeah. No, I think everything should be sort of in the same measured way that we've hired the people. There should be no distraction from hiring them. As they come in, they're being hired probably because we've seen in a particular area or we're growing a particular area that we weren't covering. So it's only going to be incremental, or it's an area that we've covered, but we don't feel like we've adequately covered it. And so anything they do should be incremental. And like I said, we've been hiring over the course of the year. And I could say with the high level of confidence where we hire people, they're productive.
Territories, that kind of thing.
Not so much. I mean, but even sometimes we overlap territories based on if someone coming in has a better relationship with one of the places within the geographic area. So we're not overly tied to geographies necessarily. We're really tied to making sure we meet the client with the right people.
Yeah. Maybe we could put this on the competitive landscape. I mean, I guess, what have you learned now that you're in the field with respect to the landscape in MS? And how does that compare to what you expected going?
Yeah. I don't think anything is very different than when we went in. We've always felt, and I think it's been borne out by what's happened since we got the market. We only have really one competitor in the IV market. And the SUB-Q market is quite distinct. So we don't really find ourselves until we have our SUB-Q product out there on the market, find ourselves facing off too much with Novartis. We find that it's really just the IV market is about 70% of all patients. And it's, "Do you want BRIUMVI? Do you want Ocrevus?" And so I think in that competition, I think we've done quite well. But yeah, I think we knew that that was going to be the case. I think we got ourselves into it with that. And we knew that they had a large and talented team.
But I think we have a smaller and more talented team. But that's my opinion.
Of course. In terms of share, I guess maybe you could just walk through the share of CD20 markets within the space, the current state of play, you mentioned 70%. But what's kind of the breakdown within CD20s? And where do you expect that to shake out over time?
Yeah. So on a dynamic share basis for the moment, so new patients coming in for a new treatment, we assume there's about 80,000 patients per year that will need a new treatment. About a quarter of those are probably truly naive to all treatment. And then the other 60,000-ish, again, give or take, there's not exact numbers, are switching from some other therapy to a new therapy. Of that, our estimation is that about half of those will go on to a CD20. So we don't, and back to that competitive landscape stuff, if they're going on an oral, we don't really see people comparing us, "Oh, should I put them on BRIUMVI, or should I put them on an oral drug?" They've made their decision.
The clinician in the background has made a decision, "I want them on a CD20." And that's kind of tells us where the competition might start. But so now you've got about half of those patients, so 40,000-ish, could be 35, whatever, but approximately in that range, are looking for a new treatment option. And what we see is on the dynamic share basis, about 30%-35% will go for SUB-Q, only one option today. And the remainder will go on to an IV therapy.
Okay. And as you think about kind of going forward or your goals from a peak share perspective within that IV market, have you laid out anything to say where you think the peak is headed? Or hockey reference since we were talking about it beforehand.
Yeah. I do love that one. So I mean, look, we do have an internal goal, which I've stated publicly, which is to be the number one in dynamic share for all CD20s. So can I be 100% sure we're going to get there? I can't be, but I know we're going to give it our best. And I do think that the profile of the drug, what we hear from clinicians, the way we've ramped into even our market share at this point gives me nice confidence. And again, I guess in terms of the there's the IV, and then we can add in later as we capture market share, potentially if we get a product approved in SUB-Q, we can capture some there. But I think overall, our goal is to be the number one. There's three participants.
I think probably if you get over 35% market share, you could be number one. So we're going for it.
Okay. And do you think, obviously, we have one SUB-Q now, we'll get another one with the approval of Ocrevus SUB-Q later this year. You're pursuing your own SUB-Q program. How do you think that will shape the kind of landscape across CD20s over time? Do you expect that 70/30 to stay stable and can be within there, or should it grow?
I think it's going to stay relatively stable. I think the community really does like using IV therapy primarily. I think they do. I find that the clinicians are more in touch with the patients and the infusion experience and also compliance experience. And I think they do like to see and make sure that patients are getting what they're getting. So I don't see that market changing dramatically. And I do think in academic centers, it's almost at a 50/50 at this point. It's been driven by just patient preference almost. Like, "Which one do you want?" And they choose 60/40 maybe. It's hard to. We don't have a good.
Does it matter if it's every 6 months or every 3 months versus every month? Does that matter to patients based on your market research?
So in terms of, I mean, a truly at-home auto injector SUB-Q, my guess is that less frequently is better than more frequently. I think once you add in the high volume 10+ minute SUB-Q, I think that's just a different, I think that'll be perceived potentially differently. And so I think there'll be probably more market research to come over time to see how that plays a role.
It's kind of a nice segue then to you have your own subcutaneous work ongoing. As you think about the target product profile that you'd like to provide there, what does that look like?
Yeah. And then look, I'd like it to be once a year. It ain't going to happen, I don't think. But as few injections as possible per year, right? So right now, the bogey is once every month. I certainly believe we could do better than once every month. I assume that at some point, Novartis are going to try to improve upon that as well. But yeah, as less frequently as possible. Once a quarter, I think, would be fantastic. Once every six months sounds somewhat challenging, but potentially doable. So I think within that range is the likely possible outcomes. But yeah, just less frequently and just make sure that it's easy to use, not painful, doesn't create a four-inch ball on your abdomen is probably a good thing.
Okay. As you think about the technical hurdles to getting there, what are some of the key technical hurdles your team has had to think through and overcome in developing the product?
Yeah. So it's really a game of concentration, right? It's basically getting as much as you can into the lowest volume. And then you have to look at viscosity and aggregation effects. And I think the team's done an amazing job. I think we're in pretty darn good shape. And I think it'll come down to the bioavailability, right? That'll really ultimately define how frequently we need to give it.
Okay. Do we know how to think about bioavailability, what's required from a threshold perspective to see the same kind of efficacy you see with an IV?
Yeah. So I think most antibodies are somewhere between 50%-80% bioavailable from SUB-Q to IV. But most have been in that range. I've read a research paper that had like 25 antibodies. And for the most part, that was the range that was found.
Okay. So something like that. Okay.
As soon as I know, I promise I will let you know.
Okay. I guess you're planning to enter the clinic here pretty shortly. So at this point, how should we characterize your confidence that you have achieved this product profile you're describing?
I think pretty good. I think pretty good.
When should we get data on that bioequivalence? When can we see clinical results as you move into the?
Yeah. I think we're probably 6 months or more away from probably sharing any bioequivalence information, maybe a little bit more than that. I think our current goal is to hopefully get into a pivotal program by middle of next year. Obviously, some data would come before that.
Right. I guess how do you think about what sort of data you would want to be able to provide to the street versus what you'll keep internally to keep moving the program forward? How should we think about the next updates and what that will include?
Yeah. I mean, I assume it'll be at a point where we feel comfortable. We know what the bioequivalence dose is. And so then at that point, we can pretty much let people know what we expect of the product profile, right? Because the bioavailability will ultimately define the volume. Require the volume. Require will determine the frequency of dosing.
In terms of regulatory path, you said pivotal trial next year. What do you anticipate that has to look like?
Yeah. So I mean, there's one data point that's sitting out in front of the FDA right now.
There's some precedent. Yeah.
Well, there's a precedent for a trial. There's not a precedent for approval yet. So assuming it gets approved, and I have no reason to believe based on what's been said publicly that it wouldn't be. But yeah, assuming it's approved and that trial design is acceptable, and that trial design is basically pretty straightforward bioequivalence, although I'd say it wasn't really bioequivalence. It was basically a non-inferiority to the AUC, which did not meet bioequivalence, but did meet the threshold for being no worse than.
Non-inferiority.
Non-inferiority for AUC. Yeah.
So in terms of number of patients, would you anticipate running something similar? Obviously, it's not the co-formulation that you'd be pursuing, so.
Yeah. I assume it's about 200. I mean, they did what, 230-something patients, give or take 250 patients is probably the right size for a trial like that.
Okay. In terms of just the contribution there to the overall utilization, I think Roche has described it as a $2 billion incremental sales to their overall market. I guess how do you think about the SUB-Q offering as being either additive or competitive within the existing franchise? What's the balance there?
Yeah. I mean, I think we're looking at it as primarily additive. I don't think, like I said, I think the community is relatively fixed in their ways. And I think they've got a way of treating patients. And it's working. So why muck with it? I think so where the SUB-Q market exists today is pretty much where we'll be targeting. So there's whatever. I think Cosentyx is probably approaching $2 billion-ish. I don't know. But anyway, so there's a reasonable market opportunity there. And obviously, it'll grow over time also because of the duration of treatment. But yeah, so we see it as a completely, I wouldn't say completely additive, but primarily an additive market for us.
Okay. Maybe we could spend a minute on Europe. I guess describe to us the current state of play for CD20s in Europe, and how does that compare here in the US?
Yeah. I don't know that the breakout or distribution of market is that different. Obviously, BRIUMVI is newer there, so probably less of a market share than here. But yeah, I think overall, the market is probably pretty similar.
Remind us just the parameters of your partnership agreement in the region and kind of how that translates to revenue for you?
Yeah. So we've got an upfront payment, which we've booked already. We got another payment in the first quarter, which we booked at $12.5 million. There'll be another, I think also $12.5 million that gets paid to us when they finish launching in the five target largest markets in Europe, which probably happens sometime next year. And then after that, we have royalties and sales milestones primarily after that. So yeah, I mean, I think from our modeling standpoint, we're certainly giving them a break this year. We're not expecting a lot of royalty revenue coming in. Next year, we'll see when we get there. But again, I can't imagine again as a percentage of our revenues that we might expect to get next year. I can't imagine it's going to be a material driver for us in that year.
And then we'll see what 2026 brings. But so I think we have a little time before we sort of expect.
Too much out of Europe.
Too much coming out of Europe. Although I will say just anecdotally, our Chief Development Officer was there this past week presenting. They had them all over Germany, which is obviously the largest market in Europe. I will say a few more anecdotes like the one I heard about a patient who was in a wheelchair, had seen Rituxan, Ocrevus, Ofa, and went on to BRIUMVI. Apparently, in a very short amount of time since it's only been launched a very short amount of time, is out of the wheelchair.
And how?
Yeah. These drugs do work differently. So it could be the difference in how the drug operates. It could be they just weren't tolerating those drugs and never really got full proper dosing of those agents. So it's hard to say. But we see it not infrequently. Anecdotes about patients who are having trouble on these other CD20s and have done quite well.
Yeah. Okay. Maybe last question on the commercial side. And this is always kind of a hard question to answer, so I apologize. In terms of innings, where are we in the overall launch for BRIUMVI? They're also a bit silly, right? It's a little bit of a Dallas sports analog.
No, I love it. I love baseball. So yeah, I mean, look, I think we're probably in the bottom of the first. I mean, we really have just gotten started. Like I said, we spent the first 18 months or so just at getting some of these major centers even able to prescribe. And then, as I mentioned, we've got multiple clinicians within those centers that we need to work on. So yeah, I think we're at the very beginning. What I've said previously is the more patients that go on BRIUMVI makes it easier for more patients to go on BRIUMVI. So we're still flipping that pendulum. We're still at the early phases of that.
The flywheel effect.
Exactly.
Yeah. You've discussed some label expansion opportunities for BRIUMVI as well. I guess which of these are you most focused on kind of near- term? And how do you think about prioritizing?
Yeah. I'm not sure. I have to say, I have to admit, the team has been awfully busy between the SUB-Q program and azer-cel. And the expansion outside of MS has probably taken a little bit of a back burner. Our goal is still to get something up and running before year-end. But I do think we're looking at hopefully some larger indications like RA and lupus. I think BRIUMVI tends to lend itself for some of those indications. Whereas sort of going to azer-cel, again, probably more niche indications within the same framework of sort of autoimmune diseases.
So that's a great segue to the azer-cel. I guess walk through the strategy of acquiring that asset and how do you think about the fit strategically versus your other businesses.
Yeah. So we've been involved, like I said, in B-cells since 2012. We took the first, I'd say, step forward from generation one, compounds like Rituxan and Ocrevus, Gen 2. Sometimes they call it Gen 3, but whatever. Gen 3 is really like us, so obinutuzumab, where they've engineered the Fc domain and we've amplified the activity. I call the next level up is sort of the bispecifics, which added activity even over the Fc engineered. And then the next level in the same continuum is the CAR T-cells, which by far, if you look at cancer, are the most active of the B-cell treatments. So to us, it's a natural fit for us. I mean, for us not to have it would be kind of, I mean, it was odd for me for years. We had a deal on the table four years ago.
We would have been the first ones in autoimmune for CAR T-cell. But in hindsight, I guess I'm not so upset because I think I'm happier in an allo platform. That would have been an auto platform. But we would have been first, which is nice. But now we'll have to be just first with allo.
Okay. What are next steps for that program when we expect to see some data?
Yeah. The goal is to get first patients in before year-end. We're targeting to start in progressive forms of multiple sclerosis. We'll start in our home base. We've got great access to clinicians who are super excited. It is truly an unmet medical need in MS. The patients are seemingly very needy and excited to have this therapy. That's where we'll start. Then we hope to expand that study relatively quickly into a number of other indications, including things like NMO, MG, RA, lupus. Yeah.
Can you talk to us a little bit about the manufacturing capabilities that you've got as part of that deal or have to build out from here?
Yeah. So through Precision, they had sold their facility, which, but through that whole relation, we still have access to manufacturing capabilities. We have some guaranteed supply. And then after that, we would sign some arrangement or go to a CMO. But yeah, for the moment, we weren't given as part of the deal enough product, certainly for the first phase one, give or take, depending on doses, probably. And then additional batches as needed.
Sort of enough to get through proof of concept and then you can make decisions from there.
Exactly.
Okay. You're obviously also kind of near position of profitability. I guess how do you think about that transition? And as you shift to cash flow profitability and we stop asking you where you're going to get money, what are your priorities for capital allocation?
Yeah. So I'd say three major forms of capital needs and allocation. So one is obviously continue to invest in BRIUMVI on the commercial side, let's say. So obviously continue to build the team. We've just started to scratch the surface of direct to patient. We've got a pretty robust online presence that certainly can grow. And we'll think of other ways in which we can potentially engage with patients moving forward. But I think building out that has a lot of really nice ROI for us. And then it's also clinically looking at BRIUMVI, making sure we continue to maintain our position as the number one convenient IV therapy. So we want to continue to push some initiatives there. We've got our switch study from Ocrevus where we can skip the first dose. The preliminary data looked very good in terms of switching straight to a 1-hour 450 mg.
That data will be further presented, I believe, at ECTRIMS. And then there's obviously SUB-Q BRIUMVI. So making investments in ensuring BRIUMVI franchise is built and potentially expanded, as we talked about, some of the other indications. Building the pipeline judiciously. So azer-cel, I think, was an easy one. Great strategic fit for us. And so I think we will continue to look for deals like that. And if it makes sense, we'll do them. I don't feel any pressure to do anything. So it's purely opportunistic. And then the last, which is people sometimes think I'm joking, but I'm not at all joking, buy back shares as quickly as we can, as fast as we can. I mean, I think the levels here are pretty low and don't reflect the true long-term value. We've got, like I said, a franchise in BRIUMVI that goes to 2042.
So yeah, I mean, I think the nice part about having a CEO who has one of the largest positions at close to 10% is fully aligned with shareholders' interests. And so if we could buy back shares as many as we can, and then at some point, we'll be offering a dividend, I assume. But yeah, I'd say those are the we would be allocating our capital.
Great. Well, that brings us to time. Thanks so much for joining us.
Well managed.
Yeah. Perfect. Awesome. Thank you again, Mike.
Thank you. Good to see you.