TG Therapeutics' CEO Discusses Q2 2013 Results - Earnings Call Transcript

| About: TG Therapeutics, (TGTX)

TG Therapeutics, Inc. (NASDAQ:TGTX)

Q2 2013 Results Earnings Call

August 2, 2013 8:30 AM ET


Jenna Bosco - Director, Investor Relations

Sean Power - Chief Financial Officer

Michael Weiss - Executive Chairman and Interim CEO


Jonathan Aschoff - Brean Capital

Joe Pantginis - ROTH Capital Partners

Matt Kaplan - Ladenburg Thalmann


Greetings. And welcome to the TG Therapeutics Second Quarter 2013 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, Director of Investor Relations. Thank you. You may begin.

Jenna Bosco

Thank you. Good morning. And welcome to our conference call regarding TG Therapeutics second quarter 2013 financial results and business update. I’m Jenna Bosco, TG’s Director of Investor Relations and I welcome you to our conference call today.

Following our Safe Harbor statements, Sean Power, TG’s Chief Financial Officer, will provide a brief overview of our financial results and then turn the call over to Michael Weiss, the company’s Executive Chairman and Interim Chief Executive Officer, who will provide an update on the ongoing development of our glycoengineered anti-CD20 monoclonal antibody, TG-1101 and our novel PI3K delta inhibitor TGR-1202.

Before we begin, I would like to remind everyone that various remarks that we make about our future expectations, plans and prospects constitute forward-looking statements, for the purposes of the safe harbor provision, under the Private Securities Litigation Reform Act of 1995.

TG cautions that these forward-looking statements are subject to risks and uncertainties that may cause our results to differ materially from those indicated. Factors that may affect TG Therapeutics operations will include various risk factors and uncertainties that can be found in our SEC filings.

This conference call will -- is being recorded for audio rebroadcast on TG’s website, where it will be available for the next 30 days. All participants on this call will be on listen-only mode.

Now, I would like to turn the call over to Sean Power, our Chief Financial Officer, to briefly discuss the financial results for the second quarter of 2013, as well as the company’s overall financial condition.

Sean Power

Thank you, Jenna, and thanks everyone for joining us. As you maybe aware, our financial results were released yesterday evening and can be viewed on the Investors and Media section of our website at

As of June 30, 2013, the company had cash and cash equivalents of $13.4 million, as compared to $16.5 million at December 31, 2012. Subsequent to June 30th, the company completed an underwritten public offering of our common stock, which provided proceeds for the company of approximately $37.4 million, net of underwriting discounts and offering expenses.

Including the net proceeds from the offering, as of June 30, 2013, on a pro forma basis, the company had cash and cash equivalents of approximately $50.8 million. Following the offering the company will continue to operate with a very well controlled burn rate and we expect that our current cash will be sufficient for approximately 30 to 36 months.

Now turning to the financial results for the quarter. Consolidated net loss for the second quarter ended June 30, 2013 was $6.6 million or $0.29 per diluted share, compared to a consolidated net loss of $2.6 million during the comparable quarter in 2012, representing an increase in consolidated net loss of $4 million.

Consolidated net loss for the second quarter ended June 30, 2013, included an increase in other research and development expenses of $3.1 million, principally related to the TG-1101 and TGR-1202 clinical development programs.

Consolidated net loss for the second quarter ended June 30, 2013 also included $1.4 million of non-cash compensation expense related to equity incentive grants.

Consolidated net loss for the six months ended June 30, 2013 was $10.3 million or $0.46 per diluted share, compared to a consolidated net loss of $20 million during the comparable quarter in 2012, representing a decrease in consolidated net loss of $9.7 million.

Included in the consolidated net loss for the six months ended June 30, 2012 was $16.6 million in non-cash stock expense recorded in conjunction with the license for TG-1101, which was partially offset in the six months ended June 30, 2013 by an increase in other research and development expenses of $4.2 million, principally related to the TG-1101 and TGR-1202 clinical development programs.

Consolidated net loss for the six months ended June 30, 2013 also included $3.3 million of non-cash compensation expense related to equity incentive grants.

With that, I will now turn the call over to Michael Weiss, our Executive Chairman and Interim CEO.

Michael Weiss

Thank you, Sean, and thanks to all of you for joining us on this call today. We had an extremely productive second quarter and I’d like to start by highlighting just a few of the major accomplishments.

June represented data three major medical conferences on both TG-1101, our glycoengineered anti-CD20 monoclonal antibody also known as ublituximab, which I’ll refer simply today as 1101 and TGR-1202, our next-generation PI3K delta inhibitor, which I will refer to as 1202.

Data presentations from all three medical meetings can be obtained on our website and include a clinical presentation on 1101 from the American Society of Clinical Oncology annual meeting, several poster presentations from the European Hematology Association annual meeting and an oral presentation was highlighted the synergies displayed with the preclinical combination of 1101 and 1202 at the International Conference on Malignant Lymphoma in Lugano Switzerland.

From the financial standpoint, we were pleased to be approved the listing on the NASDAQ Capital Market in May and earlier this month we completed the capital raise of approximately $40 million, which we used to the fund the aggressive clinical development of 1101 and 1202.

I’d like to now share some highlights from our 1101 clinical presentation at ASCO. A poster presentation by the lymphoma team from Columbia Presbyterian Medical Center led by Dr. Owen O'Connor, we were excited to report the first clinical data with single agent 1101 in patients with Rituxan relapse and/or refractory non-Hodgkin's lymphoma.

The presentation highlighted preliminary safety and efficacy data from four cohorts of three patients each at dose levels of 450, 600, 900 and 1,200 mg flat dosing. Also patients were valuable for safety, while 10 of the 12 patients were valuable for efficacy, some patients were too early for efficacy evaluation.

Patients in the study were heavily pretreated with meeting in the four prior therapies and all patients were previously treated with at least one prior Rituxan-based regimen and three quarters of the patients had receive two prior Rituxan-based regimens. Additionally, half of the patients were consider refractory to Rituxan. The find is progressing on more than six months following of Rituxan-based regimen.

Both showed that 1101 was well-tolerated and only one great three event reported at the time of the presentation and no dose limiting toxicities were observed. All 12 patients completed all planned infusion, infusion time is decreasing significantly and the first infusion at an average of four hours down to approximately 19 minutes to the fourth and maintain infusions.

From an activity standpoint and of the 12 patients were valuable for efficacy of which five patients achieved an objective response, including three complete responses and two partial responses, for an overall response rate of 50%.

Investigators were impressed to see responses in both Rituxan relapsed, as well as Rituxan refractory patients. Including patients that been exposed to several lines of prior Rituxan therapy.

Two of five valuable Rituxan refractory patients achieved their complete response after treatment with single agent 1101. Meeting progression free survival for this study had not been reached at the time of the presentation.

Additionally, we have observed a treating activity in the small lymphoma subtype called marginal zone lymphoma. Of the three patients with marginal zone lymphoma treated with single agent 1101, all three patients were responded to the drug.

Two of which achieved complete responses, while number of patients treated thus far is small results are very encouraging and we plan to further study the effects of 1101 in relapsed/refractory marginal zone lymphoma, and we have been in contract with an International Marginal Zone Study Group who has expressed interest in studying 1101 in the marginal zone patients.

In summary, we and the 1101 investigators were very encouraged with the safety and efficacy we had presented ASCO this year and we look forward to future presentation at the American Society of Hematology meeting also referred to as ASH later this year in December.

Now let me update everyone on the progress of our ongoing clinical trials for 1101. As just discussed, we reported and ask a preliminary data from our ongoing clinical trial of 1101 as a single agent in patients that were relapsed from and/or refractory to Rituxan.

Complete enrollment into the dose-escalation portion of the study in June of this year, as a result of the activity seen, we are current enrolling up to 10 to 20 patients to our first expansion cohort at 900 mg, we anticipate enrolling an additional up to 10 to 20 patients up to 1,200 mg dose level. We have seen no dose limiting toxicity at the 1,200 mg dose level. We may also explore higher doses going forward.

In addition to our single agent study, we also have an ongoing combination study with Revlimid, an immune modulating agent that was recently approved for the treatment of mantle cell lymphoma.

This study with dose-escalation trial with the traditional 3+3 design with 450, 600 and 900 mgs of 1101 administered in combination with titrating doses of Revlimid. We are now dosing patients in the 900 mg cohort. Early clinical data was presented on the combination at the recent European Hematology meeting in June with an updated presentation plan for ASH.

Moving forward we are eager to expand our combination program, since the founding of the company we have been excited about the potential benefit to patient providing 1101 with novel small molecule inhibitors the B-cell receptor pathway such as BTK inhibitor and PI3K Delta inhibitor. So much so that early on department for own PI3K Delta inhibitor TGR-1202 which I’ll be providing an update momentarily.

With the immanent approval of the first B-cell receptor pathway inhibitors expected before the end of this year and additional approvals into next year, we are looking both convincing additional combination studies. Accordingly we are targeting commencing such combination studies before the end of this year. I will keep you posted on the study design and plans as we move closer to launching them.

Let me now turn to TGR-1202, our novel PI3K Delta inhibitor, which we are developing jointly with Rhizen Pharmaceuticals. As a reminder, 1202 is a highly specific PI3K Delta inhibitor targeting Delta soform with nanomolar potency and high selectivity over the alpha, beta and gamma isoforms of PI3K.

We commence our first invent Phase I study of 1202 earlier this year. Phase I study is a standard 3+3 dose-escalation study to assess the safety and efficacy of 1202 patients with select hematological malignancies.

We are pleased to report that no dose limiting toxicity has been observed to date and the maximum-tolerated dose has not been reached. By the no patient experience dose limiting toxicity additional cohorts evaluating sequentially higher doses of TGR-1202 are planned.

Accordingly, the study will also evaluate the pharmacokinetics and pharmacodynamics of 1202. We plan to analyze and present the PK data on the first four cohorts, approximately 12 patients by the end of the third quarter, which time we believe we will be able to make two key determinations. First, whether we can offer patients a once-a-day PI3K Delta inhibitor, as a reminder both idelalisib and IPI-145 requires twice per day dosing.

And second, we’re trying to use the PK data to more actively project the target dose level which will be required to sufficiently suppress the I3K delta. We look forward to continued enrolment in the dose escalation portion of the trial and present in preliminary Phase I data at the ASH meeting in December.

We conclude my formal remarks by summarizing what investors should expect in the second half of the year. Continued enrolment into our current 1101 clinical trials both as a single agent and a combination with Revlimid and clinical updates on these studies at ASH, the commencement of a single agent trial in marginal zone lymphoma and the combination studies with B-cell receptor pathway inhibitors including possibly with 1202.

With regards to 1202, PK assessment on the first four cohorts approximately 12 patients reflect that data before the end of September, and in addition to the PK data on 1202, our goal is to provide a clinical update on the Phase 1 dose escalation study at ASH this year.

With that, I would like to turn the call back over to the conference operator for the Q&A session, following which I will return and provide some concluding remarks.

Question-and-Answer Session


(Operator Instructions) Thank you. Our first question comes from the line of Jonathan Aschoff with Brean Capital. Please proceed with your question.

Jonathan Aschoff - Brean Capital

Thank you. Good morning, guys.

Mike Weiss

Good morning

Sean Power

Good morning

Jonathan Aschoff - Brean Capital

I was -- just a couple of questions, I was wondering, could you give an update on those responders that were filed at ASCO, are you ready to give that now? And I was also wondering maybe I missed it. I was a bit distracted by someone during the call, what's left to learn before you definitively go into a 1202, 1101 combination trial?

Mike Weiss

So let me answer the first question. We haven't yet updated that but I could say that all those patients are still in response. The longest one is out almost a year now on those patients with total response.

In terms of 1101-1202 combination, we are still dose escalating. So we are kind of getting all the preparations together to start that combination study, sort of, a hurry up and wait for the moment and we’re just waiting to get up, high enough for the dosing that we can comfortably start the combination. We’d like to get to a point where we are comfortable with the activity level and the safety profile.

So we’re evaluating in real time and we are waiting also particularly to get the PK analysis done. We want to get through the PK on the first four cohort. Again our goal is to analyze that information and make it available to you and the investors hopefully by the end of the summer, so into September and certainly before the end of the month for sure.

Jonathan Aschoff - Brean Capital

And I guess lastly, I was wondering if you are familiar at all with this insight delta, this PI3K delta that they have -- I think they have just started or about to start a Phase I with it, if you have any knowledge about that and how it compares to 1202?

Mike Weiss

You stumped me really Jonathan, sorry about that. Looks like we haven't -- it hasn’t been really on our radar screen, but we will take a look and see what we know about it and what we can [learn] from it but I don't think it’s in clinic, probably we’ll do a little bit of research on it.

Jonathan Aschoff - Brean Capital

Okay. Thank you.


Our next question comes from the line of Joe Pantginis with ROTH Capital Partners. Please proceed with your question.

Joe Pantginis - ROTH Capital Partners

Hey, guys, how are you? Good morning. Couple of quick questions, for ublituximab, is for the marginal zone study, I know you are targeting about 40 to 50 patients, are we still looking at that potential size?

Mike Weiss

Thinking in total, yeah, we would like to see if we get a nice population, 40, 50 patients will be great.

Joe Pantginis - ROTH Capital Partners

Okay. And going of some comments from Dr. O'Connor just wondering if you can dive into it a little more especially, after the ASCO data, there were some commentary. Obviously there is a lot of people who are entrenched using Rituxan and are stalwart fans of the drug, but there had been, I guess, I am quoted as some rethinking of the ADCC activity associated with Ublituximab, I was just wondering if you can add any more color to that?

Mike Weiss

Sure, I mean, I think -- our thinking, I think is the same as all the doctors of Rituxan. It is a fantastic drug but eventually you can't use it anymore and the real question is after that can you still target CD20 with other agents?

I think the data that came out of ASCO on GA-101 is I think really the first -- was it a hard evidence, close to hard evidence, that enhancing, with ADCC, glycoengineering these molecules does make molecules more potent than what we see in the predecessors whether you use it instead of which I think is the goal of GA-101 or use it after Rituxan which is our goal.

I think the rethinking that Owen was referring to that the data coming out of the GA-101 head-to-head study against Rituxan showed some dramatic differences in both response rates PFS, and minimal residual disease status.

So I think that was the piece of data that started the rethinking. I don’t think -- I don’t think Rituxan is going to wholesale switch over to TG-1101 but I do think from a perception standpoint, it is reasonably clear now to folks that glycoengineering and enhancing that ADCC actually does matter and does change the profile of activity of these compounds.

Joe Pantginis - ROTH Capital Partners

Great. Thanks a lot guys.

Mike Weiss



Our next question comes from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

Matt Kaplan - Ladenburg Thalmann

Hi, guys. Good morning.

Mike Weiss

Good morning.

Matt Kaplan - Ladenburg Thalmann

Just a follow-up on Joe’s question, a little bit in terms of 1101, given the activity that you’re seeing to-date so far in the marginal zone and patients and the plan, I guess study in that group. Can you talk a little bit about potential regulatory pathway for the product perhaps even in marginal zone patients?

Mike Weiss

Sure. So obviously, we’ll have to at some point, have discussions with the FDA about it. I think in general regulatory sense if we -- it is a subtype of indolent lymphomas. There’s nothing that’s ever been specifically approved for the indication.

We do believe that it represents particularly relapsed or refractory setting after you’ve been through several lines of treatment with Rituxan plus chemotherapy that represents an unmet medical need. And we think if you look at ibrutinib in Mantle Cell Lymphoma, there is probably a pass forward through a single-arm study assuming that we show very high levels of activity in patients who are relapsed or refractory to standard of care. And it probably requires single-arm study between 50 and 100 patients. It would be probably reasonable again depending on the magnitude of the effect.

So we’re kind of remodeling our thought process again subject to close to discussing out some point with the FDA making sure that they continue the same way. We look to kind of modeling our thought process after the ibrutinib process for Mantle Cell.

Matt Kaplan - Ladenburg Thalmann

Great. Thanks. And one additional question on 1202, you mentioned so far you’re -- in dose escalation you’ve seen no DLTs and you have reached the MTD. Can you tell us how many dose cohorts have been completed so far and then what your plans are for additional cohorts.

Mike Weiss

Sure. So we’ve completed three cohorts. We’re in the process of completing the fourth cohort and our goal is to the start with fifth cohort within the next 30 days. And we’re going to continue to dose-escalate. We haven’t seen any dose-limiting toxicities. So we’re clear to continue to escalate the drug. And we’ll continue to do so until we get toxicity.

Matt Kaplan - Ladenburg Thalmann

And in terms of the dose that you’re at and how it compares to the activity you saw pre-clinically. Do you think you’re reaching doses that are clinically relevant at this point?

Mike Weiss

Probably, getting near to the lower end of the range of what might be clinically relevant, based on what we are thinking before we start the study. But again I think we’ve been pretty cautious. Let say, I have been personal cautious about projecting too much from limited animal PK information. And I have been sort of reserving my judgment until we have the analysis of the first four cohort, that’s sort have been my target from day one.

So I think once we have the PK information, the [TD] information from the first four cohorts. I think we’d be able to come up with the much better target from where we expect to see clinical activity.

Matt Kaplan - Ladenburg Thalmann

Great. Well, thanks for taking the questions and congrats on the great progress.

Mike Weiss

Thanks Matt.


Mr. Weiss, it appears we have no further questions at this time. I would now like to turn the floor back over to you for additional or closing comments.

Mike Weiss

Great. Thank you. So again let me thank everyone for joining us on the call today. Very excited about the results generated thus far with 1101, looking forward to more information coming out on 1202 and we certainly continue to be extremely excited about our future prospects.

Our goals continues to be to develop a novel, non-chemotherapy based highly active, less toxic treatment option for patients with relapsed or refractory B-Cell cancers. We and leading experts believe that novel targeted combination therapies, also the greatest hope to enhance larger patients we’ll try to be on the forefront of this effort. Thanks again for joining us and have a great day.


Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to All other use is prohibited.


If you have any additional questions about our online transcripts, please contact us at: Thank you!