TG THERAPEUTICS INC

Previous wording

On January 9, 2024, we entered into an agreement with Precision BioSciences, Inc. (Precision) to acquire a worldwide license to Precision’s azercabtagene zapreleucel (azer-cel), an allogeneic CD19 CAR T cell therapy program for autoimmune diseases and all other non-oncology indications. Azer-cel is an allogeneic (off the shelf) CAR T program, and the Company has near term plans to evaluate the program in multiple autoimmune indications.

Current wording

In August 2024 we announced FDA clearance of the Investigational New Drug (IND) application for azercabtagene zapreleucel (azer-cel) for the treatment of progressive forms of multiple sclerosis. Previously, in January 2024, we entered into an agreement with Precision BioSciences, Inc. (Precision) to acquire a worldwide license to Precision’s azer-cel, for autoimmune diseases and all other non-oncology indications. Azer-cel is an allogeneic (off the shelf) CAR T program, and the Company has near term plans to evaluate the program in multiple autoimmune indications.

Previous wording

On February 27, 2024, we announced the issuance of three additional patents by the United States Patent and Trademark Office (USPTO) for BRIUMVI, which extended patent protection through 2042.

Current wording

In February 2024, we announced the issuance of three additional patents by the United States Patent and Trademark Office (USPTO) for BRIUMVI, which extended patent protection through 2042.

Previous wording

On December 28, 2022, we announced the FDA approval of BRIUMVI for the treatment of RMS, to include clinically isolated syndrome, relapsing-remitting disease, and active secondary progressive disease, in adults, primarily based on results from the ULTIMATE I & II Phase 3 trials. On January 26, 2023, we announced the U.S. commercial launch of BRIUMVI, making it available to physicians and patients.

Current wording

On December 28, 2022, we announced the FDA approval of BRIUMVI for the treatment of RMS, to include clinically isolated syndrome, relapsing-remitting disease, and active secondary progressive disease, in adults, primarily based on results from the ULTIMATE I & II Phase 3 trials. On January 26, 2023, we announced the U.S. commercial launch of BRIUMVI, making it available to physicians and patients and the first RMS patient received a BRIUMVI infusion on February 1, 2023.

Previous wording

On August 1, 2023, we announced an agreement with Neuraxpharm, a leading European specialty pharmaceutical company focused on the treatment of CNS disorders, for the Ex-U.S. commercialization of BRIUMVI (Commercialization Agreement). Under the terms of the Commercialization Agreement, we received an upfront payment of $140 million, and are eligible to receive an additional $12.5 million upon launch in the first EU country and up to an additional $492.5 million in milestone-based payments on achievement of certain launch and commercial milestones. The total deal is valued at up to $645 million in upfront and milestone payments. In addition, we will receive tiered double-digit royalties on net product sales up to 30%. In exchange, Neuraxpharm will have the exclusive right to commercialize BRIUMVI in territories outside the U.S., Canada and Mexico, which are retained by TG, and excluding certain Asian countries of which the Company previously partnered. We retain an option to buy back all rights under the Commercialization Agreement for a period of two years in the event of a change in control of TG.

Current wording

On August 1, 2023, we announced an agreement with Neuraxpharm Pharmaceuticals, S.L. (Neuraxpharm), a leading European specialty pharmaceutical company focused on the treatment of CNS disorders, for the Ex-U.S. commercialization of BRIUMVI (Commercialization Agreement). Under the terms of the Commercialization Agreement, we received an upfront payment of $140 million, and are eligible to receive an additional $12.5 million upon launch in the first EU country and up to an additional $492.5 million in milestone-based payments on achievement of certain launch and commercial milestones. The total deal is valued at up to $645 million in upfront and milestone payments. In addition, we will receive tiered double-digit royalties on net product sales up to 30%. In exchange, Neuraxpharm will have the exclusive right to commercialize BRIUMVI in territories outside the U.S., Canada and Mexico, which are retained by TG, and excluding certain Asian countries of which the Company previously partnered. We retain an option to buy back all rights under the Commercialization Agreement for a period of two years in the event of a change in control of TG.

Previous wording

Product Revenue, net*.*Product revenue, net was approximately $50.5 million for the three months ended March 31, 2024, compared to $7.8 million for the three months ended March 31, 2023. Product revenue, net for the both the three months ended March 31, 2024 and March 31, 2023, consisted of net product sales of BRIUMVI in the United States. In January 2023, we began commercial sales of BRIUMVI within the U.S. following FDA approval. The increase in product revenue, net is driven by an increase in product shipments for BRIUMVI as a result of greater market penetration.

Current wording

Product Revenue, Net*.*Product revenue, net was approximately $72.6 million for the three months ended June 30, 2024, compared to $16.0 million for the three months ended June 30, 2023. Product revenue, net for the both the three months ended June 30, 2024 and June 30, 2023 consisted of net product sales of BRIUMVI in the United States. In January 2023, we began commercial sales of BRIUMVI within the U.S. following FDA approval. The increase in product revenue, net is driven by an increase in product shipments for BRIUMVI as a result of greater market penetration.

Previous wording

Other Revenue. Other revenue was approximately $0.5 million and zero for the three months ended March 31, 2024 and March 31, 2023, respectively. Other revenue for the three months ended March 31, 2024 is comprised of consideration received for development and regulatory activities performed on behalf of Neuraxpharm in accordance with the Commercialization Agreement.

Current wording

Other Revenue. Other revenue was approximately $0.7 million and zero for the three months ended June 30, 2024 and June 30, 2023, respectively. Other revenue for the three months ended June 30, 2024 is comprised of consideration received for development and regulatory activities performed on behalf of Neuraxpharm in accordance with the Commercialization Agreement.

Previous wording

Cost of Revenue. Cost of revenue for the three months ended March 31, 2024 was $5.4 million compared to approximately $0.9 million for the three months ended March 31, 2023. Cost of revenue for both the three months ended March 31, 2024 and March 31, 2023 consists primarily of third-party manufacturing, distribution, overhead costs and royalties owed to our licensing partner for BRIUMVI sales. A portion of the costs of producing BRIUMVI sold to date was expensed as research and development prior to the FDA approval of BRIUMVI and therefore it is not reflected in the cost of revenue. As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in cost of revenue. We expect the cost of revenue for BRIUMVI to increase in relation to product revenues as we deplete these inventories. We expect to use the remaining pre-commercialization inventory for product sales through the first quarter of 2025, after which our product gross margin is anticipated to decrease modestly. A portion of the cost of revenue for the three months ended March 31, 2023 includes costs related to delivering regulatory support & development services to Neuraxpharm in accordance with the Commercialization Agreement.

Current wording

Cost of Revenue. Cost of revenue for the three months ended June 30, 2024 was $8.3 million compared to approximately $1.9 million for the three months ended June 30, 2023. Cost of revenue for both the three months ended June 30, 2024 and June 30, 2023 consists primarily of third-party manufacturing, distribution, overhead costs and royalties owed to our licensing partner for BRIUMVI sales. A portion of the costs of producing BRIUMVI sold to date was expensed as research and development prior to the FDA approval of BRIUMVI and therefore it is not reflected in the cost of revenue. As a result, our initial product gross margin is higher as our pre-launch inventory costs are not included in cost of revenue. We expect the cost of revenue for BRIUMVI to increase in relation to product revenues as we deplete these inventories. We expect to use the remaining pre-commercialization inventory for product sales through the first quarter of 2025, after which our product gross margin is anticipated to decrease modestly. The cost of revenue for both the three months ended June 30, 2024 and June 30, 2023 includes, respectively, $0.7 million and zero, costs related to delivering regulatory support & development services to Neuraxpharm in accordance with the Commercialization Agreement.

Previous wording

Noncash Compensation Expense (Research and Development). Noncash compensation expense (research and development) related to equity incentive grants totaled $2.5 million for the three months ended March 31, 2024, as compared to $1.6 million during the comparable period ended March 31, 2023. The increase in noncash compensation expense was primarily due to greater vesting of equity grants during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

Current wording

Noncash Compensation Expense (Research and Development). Noncash compensation expense (research and development) related to equity incentive grants totaled $2.5 million for the three months ended June 30, 2024, as compared to $5.7 million during the comparable period ended June 30, 2023. The decrease in noncash compensation expense was primarily due to decreased vesting of milestone-based grants during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

Previous wording

Other Selling, General and Administrative.*** ***Other selling, general and administrative expenses totaled $27.7 million for the three months ended March 31, 2024, as compared to $22.8 million during the comparable period ended March 31, 2023. The increase was primarily due to other selling, general and administrative costs, including personnel and consultants, associated with the commercialization of BRIUMVI, during the three months ended March 31, 2024.

Current wording

Other Selling, General and Administrative Expenses.*** ***Other selling, general and administrative expenses totaled $31.8 million for the three months ended June 30, 2024, as compared to $23.8 million during the comparable period ended June 30, 2023. The increase was primarily due to other selling, general and administrative costs, including personnel and consultants, associated with the commercialization of BRIUMVI, during the three months ended June 30, 2024.

Previous wording

Interest Expense.*** ***Interest expense decreased by $0.5 million to $2.3 million for the three months ended March 31, 2024, as compared to $2.8 million for the three months ended March 31, 2023.

Current wording

Interest Expense.*** ***Interest expense increased by $0.4 million to $4.0 million for the three months ended June 30, 2024, as compared to $3.6 million for the three months ended June 30, 2023.

Previous wording

Other Income.*** ***Other income increased by $0.3 million to $0.9 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase is mainly due to higher interest income received from our money market investments.

Current wording

Other Income.*** ***Other income increased by $1.0 million to $1.7 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The increase is mainly due to higher interest income received from our money market investments.

Previous wording

License Revenue. License revenue was $12.5 million and less than $0.1 million for the three months ended March 31, 2024 and March 31, 2023, respectively. License revenue for the three months ended March 31, 2024 is predominantly comprised of a milestone payment under the Neuraxpharm Commercialization Agreement for the first key market commercial launch of BRIUMVI in the EU. License revenue for the three months ended March 31, 2023 is comprised of recognition of a portion of the upfront payment from the Ublituximab sublicense agreement with Ildong.

Current wording

License Revenue. License revenue was $12.6 million for the six months ended June 30, 2024 compared to approximately $0.1 million for the six months ended June 30, 2023. License revenue for the six months ended June 30, 2024 is predominantly comprised of a milestone payment under the Neuraxpharm Commercialization Agreement for the first key market commercial launch of BRIUMVI in the EU. License revenue for the six months ended June 30, 2023 is comprised of recognition of a portion of the upfront payment from the Ublituximab sublicense agreement with Ildong.

Previous wording

Other Research and Development Expense*.*Other research and development expense increased for the three months ended March 31, 2024, by approximately $16.0 million to $30.3 million as compared to the comparable period ended March 31, 2023. The increase in research and development expense during the three months ended March 31, 2024 was primarily attributable to the Precision License Agreement, as well as manufacturing related expenses during the period.

Current wording

Other Research and Development Expense*.*Other research and development expense increased for the six months ended June 30, 2024, by approximately $8.6 million to $45.3 million as compared to the comparable period ended June 30, 2023. The increase in research and development expense during the six months ended June 30, 2024 was primarily attributable to the Precision License Agreement, as well as manufacturing related expenses during the period, offset by a decrease in clinical trial expenses.

Previous wording

Noncash Compensation Expense (Selling, General and Administrative).*** ***Noncash compensation expense (selling, general and administrative) related to equity incentive grants totaled $6.9 million for the three months ended March 31, 2024, as compared to $5.2 million during the comparable period ended March 31, 2023. The increase in noncash compensation expense was primarily due to greater vesting of equity grants during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

Current wording

Noncash Compensation Expense (Selling, General and Administrative).*** ***Noncash compensation expense (selling, general and administrative) related to equity incentive grants totaled $13.8 million for the six months ended June 30, 2024, as compared to $12.1 million during the comparable period ended June 30, 2023. The increase in noncash compensation expense was primarily due to greater vesting of equity grants during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

Previous wording

Historically, we have incurred operating losses since our inception; however, the Company experienced a net profit during the twelve months ended December 31, 2023 due to a $140.0 million non-refundable upfront payment recognized as license revenue in the third quarter of 2023 as part of our Commercialization Agreement with Neuraxpharm (see Note 2 for more information). We expect to continue to incur operating losses in the near term and may never become profitable. As of March 31, 2024, we have an accumulated deficit of $1.5 billion.

Current wording

Historically, we have incurred operating losses; however, during the three months ended June 30, 2024, the Company experienced a net profit. Additionally, during the twelve months ended December 31, 2023, the Company experienced a net profit due to a $140.0 million non-refundable upfront payment recognized as license revenue in the third quarter of 2023 as part of our Commercialization Agreement with Neuraxpharm (see Note 2 for more information). We may incur operating losses in the near term and may never become profitable. As of June 30, 2024, we have an accumulated deficit of $1.6 billion.

Previous wording

Our major sources of cash have been proceeds from private placements and public offerings of equity securities, our loan and security agreements executed with Hercules (see Note 7 for more information), and the upfront payment from the Commercialization Agreement (see Note 2 for more information). 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. During the three months ended March 31, 2024, we generated $50.5 million in product revenue from sales of BRIUMVI. BRIUMVI first became commercially available in the United States in January of 2023. Even with the commercialization of BRIUMVI and the possible future commercialization of our other drug candidates, we may not become profitable. Our ability to achieve profitability depends on our ability to generate revenue and many other factors, including our ability to successfully commercialize our drug candidates alone or in partnership; successfully complete any post-approval regulatory obligations and our ability to maintain or obtain regulatory approval for our drug candidates. We may continue to incur operating losses even now that we are generating revenues from BRIUMVI.

Current wording

Our major sources of cash have been proceeds from private placements and public offerings of equity securities, our loan and security agreements executed with Hercules (see Note 7 for more information), and the upfront payment from the Commercialization Agreement (see Note 2 for more information). 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. During the six months ended June 30, 2024, we generated $123.1 million in product revenue from sales of BRIUMVI. BRIUMVI first became commercially available in the United States in January of 2023. Even with the commercialization of BRIUMVI and the possible future commercialization of our other drug candidates, we may not become profitable. Our ability to achieve profitability depends on our ability to generate revenue and many other factors, including our ability to successfully commercialize our drug candidates alone or in partnership; successfully complete any post-approval regulatory obligations and our ability to maintain or obtain regulatory approval for our drug candidates. We may continue to incur operating losses even now that we are generating revenues from BRIUMVI.

Previous wording

As of March 31, 2024, we had $209.8 million in cash and cash equivalents, and investment securities. The Company believes its existing cash, cash equivalents, and investment securities, combined with projected revenues associated with the sale of BRIUMVI in the U.S. and ex-U.S., will be sufficient to fund its anticipated operating cash requirements for at least twelve months following the date of this filing.

Current wording

As of June 30, 2024, we had $217.3 million in cash and cash equivalents, and investment securities. The Company believes its existing cash, cash equivalents, and investment securities, combined with projected revenues associated with the sale of BRIUMVI in the U.S. and ex-U.S., will be sufficient to fund its anticipated operating cash requirements for at least twelve months following the date of this filing.

Previous wording

The following table summarizes our cash flows for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:

Previous wording

Cash used in operating activities for the three months ended March 31, 2024 was $8.2 million as compared to cash used in operating activities of $59.9 million for the three months ended March 31, 2023. The decrease in net cash used in operating activities was due to a lower net loss during the three months ended March 31, 2024, offset by an increase in inventory of $50.5 million during the same period. This inventory balance increase was due to the buildup of inventory in support of BRIUMVI forecasted sales, to ensure appropriate safety stock levels, and meet our commitment to supply BRIUMVI to Neuraxpharm in relation to the Commercialization Agreement.

Current wording

Cash used in operating activities for the six months ended June 30, 2024 was $2.7 million as compared to cash used in operating activities of $101.9 million for the six months ended June 30, 2023. The decrease in net cash used in operating activities was due to a lower net loss during the six months ended June 30, 2024, offset by an increase in inventory of $39.5 million during the same period. This inventory balance increase was due to the buildup of inventory in support of BRIUMVI forecasted sales, to ensure appropriate safety stock levels, and meet our commitment to supply BRIUMVI to Neuraxpharm in relation to the Commercialization Agreement.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2024, was $9.3 million as compared to $6.2 million for the three months ended March 31, 2023. The increase in net cash used in investing activities was primarily due to increased investment in short-term and long-term securities during the three months ended March 31, 2024.

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 was $7.5 million as compared to $24.3 million provided by investing activities for the six months ended June 30, 2023. The increase in net cash used in investing activities was primarily due to increased investment in short-term securities during the six months ended June 30, 2024.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2024, was approximately zero as compared to net cash provided by financing activities of $25.2 million for the three months ended March 31, 2023. The increase in net cash provided by financing activities during the three months ended March 31, 2023 included an advance of $25.0 million drawn as part of the First Amendment entered into with Hercules.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $0.1 million as compared to net cash provided by financing activities of $72.2 million for the six months ended June 30, 2023. The decrease in net cash provided by financing activities during the six months ended June 30, 2024 is due to the advance of $25.0 million drawn as part of the First Amendment entered into with Hercules on March 31, 2024 and $46.3 million received under 2022 ATM that occurred during the six months June 30, 2023.