Greetings, and welcome to the TG Therapeutics Second Quarter 2023 Financial Results and Business Update Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jenna Bosco. Thank you, Ms. Bosco, you may begin.

Thank you. Welcome, everyone, and thanks for joining us this morning. I am Jenna Bosco and with me today to discuss this morning's news of our ex-U.S. commercialization partner as well as the results for the second quarter of 2023 are Michael Weiss, our Chairman and Chief Executive Officer; Adam Waldman, our Chief Commercialization Officer; and Sean Power, our Chief Financial Officer. Following our safe harbor statement, Mike will provide an overview of today's news as well as our corporate development. Adam will give an update on our commercialization efforts and Sean will provide a brief overview of our financial results before turning the call over to the operator to begin the Q&A session. Before we begin, I'd like to remind everyone that we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about our anticipated future operating and financial performance, including sales performance, projected milestones and expectations for our marketed and pipeline products. TG cautions that these forward-looking statements are subject to risks that may cause our actual results to differ materially from those indicated. Factors that may affect TG Therapeutics' operations include various risk factors that can be found in our SEC filings. In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. Today's conference call is being recorded for audio rebroadcast on TG's website, www.tgtherapeutics.com, where it will be available for the next 30 days. Now I would like to turn the call over to Mike Weiss, our CEO.

Thanks, Jenna, and good morning, everyone, and thanks for joining us on today's call. We are excited to present to you our second quarter 2023 financial results, representing the first full quarter of Briumvi sales, which, like the first quarter of 2023 exceeded our expectations. But before I do, I want to kick off today's call by highlighting this morning's news relating to our agreement for ex-U.S. commercialization of Briumvi. As you may recall, in June, Briumvi was approved in the European Union to treat adult patients with relapsing forms of MS who have active disease defined by clinical or imaging features. Today, we are very happy to announce that we've entered into an ex-U.S. commercialization agreement for Briumvi with Neuraxpharm, a leading European specialty pharmaceutical company focused on the treatment of central nervous system disorders or CNS disorders. We are very excited to be partnering with them to launch Briumvi in Europe. The neurology-focused approach, broad European platform and entrepreneurial organization really resonated with us as an attractive partner for Briumvi and TG. Neuraxpharm has over 35 years of experience in the CNS space, a direct presence in 20 European countries and an extensive commercial CNS team. And in addition, they have committed to add over 100 additional field-based commercial and medical MS specialists dedicated to Briumvi. Moreover, they have the backing of one of the preeminent global private equity firm is Permira. For all of these reasons, we are confident in their ability to succeed and make Briumvi a leading treatment for patients with RMS worldwide. From a deal perspective, the terms provide us with many important benefits that we were seeking when evaluating potential ex-U.S. partnerships including a meaningful upfront payment, which together with a near-term milestone, total over $150 million, solidifying our balance sheet. We're also…

Yes. Thank you, Mike, and good morning, everybody. Before I jump into the quarter results in the U.S., let me start by saying how excited I am to be partnering Neuraxpharm, to launch Briumvi in Europe and other markets around the world. They share our entrepreneurial mindset and urgency and will undoubtedly make Briumvi a top priority. From a commercial perspective, I am very impressed with their capabilities, expertise and presence in the neurology space. And I believe they will do an excellent job accelerating the launch and quickly bringing Briumvi to patients around the world. As far as the U.S. performance in the second quarter, which as Mike mentioned, is our first full quarter in the market. We are very pleased with the progress we're seeing with Briumvi and we continue to exceed our internal expectations. We have built positive momentum in the first half of the year and encouraged by the launch trajectory to date. With second quarter net sales for Briumvi of $16 million, representing over 100% growth quarter-over-quarter. Key highlights from the quarter include increases in patient demand growth where we saw daily average hub enrollment nearly double quarter-over-quarter with greater than 800 Briumvi prescriptions coming through our hub in the second quarter, bringing our launch to date total to more than 1,200 new patient scripts. As we have mentioned in the past, we believe this figure is capturing 80% to 90% of the total new scripts written. And while it is challenging to determine the exact number, we saw dramatic increases in new patient infusions in the second quarter. Importantly, patient and physician feedback continues to be overwhelmingly positive. In our market research, the majority of Briumvi prescribers report having very positive experience so far with nearly all patients completing the 1-hour infusions as expected.…

Thank you, Adam, and thanks, everyone, for joining us. Earlier this morning, we reported our detailed second quarter 2023 financial results, which can be viewed on the Investors & Media section of our website. I'd like to begin today's call by touching on our cash position. As we released earlier this morning and highlighted by Mike, we are pleased to report that the ex-U.S. commercialization agreement with Neuraxpharm contains an upfront cash payment of $140 million and additional near-term cash milestones of approximately $12.5 million. During the second quarter, we were also able to take advantage of favorable market conditions to bolster our balance sheet and raised approximately $46 million in net proceeds from the utilization of our ATM facility at an average price of approximately $34. All told, we ended the second quarter with approximately $145 million in cash. And when accounting for the $140 million upfront payment, I have a current pro forma cash balance of approximately $285 million. We believe our current capital when coupled with modest Briumvi revenue assumptions, will take us out into the foreseeable future without the need to raise incremental capital. Turning to some of the other key financial metrics for the quarter. First, as Adam previously reported, we are pleased to announce $16 million in Briumvi net sales in our first full quarter since launch, representing 100% growth over the first quarter of 2023 and $23.8 million in cumulative net sales since launch. As for our broader financial results, our net loss for the second quarter of 2023 excluding noncash items, was approximately $35.1 million, roughly in line with the first quarter of 2023, where we saw a net loss of $32.4 million when excluding noncash items. Our GAAP net loss for the second quarter of 2023 was approximately $47.6 million or $0.34 per share compared to a GAAP net loss of $40.5 million or $0.30 per share in the second quarter of 2022. With that, I will now turn the call back over to the conference operator to begin the Q&A.

[Operator Instructions] Our first question is from Eric Joseph with JP Morgan.

Can you talk a little bit about the cadence of new prescriptions for Briumvi over the course of 2Q and throughout July to date. I'm curious to know whether the demand curve is accelerating, plateauing, is it choppy? And then are you seeing a material impact so far from -- now having the J-Code in place.

Yes. Thanks, Eric. Adam, you want to go ahead and back along.

Yes. I would characterize it as steady growth. And I would say we saw a little bit of a slowdown in the July 4th week, which is a down week, I think, across the board. We've seen acceleration since. That said, we wouldn't expect an immediate impact on the J-Code. It takes time for this J-Code to get loaded into payer systems, loaded into the institutional systems. We do believe it's a net positive. We do believe that it will lead to continued growth and will lead to more pickup for Briumvi, but it will take time, as I think I've said in the past.

Okay. That's helpful. And maybe just a follow-up, if I could. Just when it comes to your updated cash guidance, right, have it being funded through operations for the foreseeable future. Can you just talk about what that encompasses, if anything beyond Briumvi commercialization in the U.S.? Does it anticipate any further development of the product perhaps for other indications or formulations.

Yes. Thanks, Eric. So yes, it does mean we are continuing to evaluate the subcu formulation of Briumvi. So that's also included in that. We've got our eye on potentially additional clinical studies for Briumvi. We've got some of them, we obviously have the BTK inhibitor in our portfolio that we're evaluating. We're kind of waiting to see what the data looks like from some of the competitive products to see if there's an avenue for us to move forward there. And we've said and we continue to be active in looking at new opportunities and all of that would be included in that cash guidance, yes. None of it would be so material to impact where we're going, which appears to be quarter-over-quarter, our net loss should continue to decline.

And our next question is from Ed White with H.C. Wainwright.

Congratulations on the second quarter sales and also on the deal announced this morning. Just 2 questions for me. First, Mike, I just wanted to get your thoughts on the Ocrevus subcutaneous Phase III data and the potential impact that will have on the market and where you are as far as you had just mentioned your subcutaneous formulation. And then the second question I have is just for Sean, the R&D was up dramatically sequentially in the second quarter. I just wanted to get your thoughts on R&D expenses over the second half of the year.

Yes. So the Ocrevus subcu. So a few points on that. Obviously, it's made somewhat of a splash among the investment community, which I find interesting in that it wasn't a surprise, right? This has been telegraphed for quite some time that this data was coming. I think the data that they presented is in line with what one would expect from a top line data release. I do think that the details let's say, [indiscernible] in the details. We all look forward to seeing the detailed data presentation. I do know that there's a pain measure, I think, is a co-primary endpoint. So we'll be interested to see what that pain level looks like. Anecdotally, we have heard that pain associated with the subcu can be significant in some patients. So I think we're all in a position of waiting to see what the actual profile of that product looks like. I think as we sit here today, Briumvi with its 1-hour infusion is the gold standard for convenience and efficacy in the CD20 space. And I think the fact that folks are excited and potentially interested and the fact that Roche is excited and interested in a faster and more convenient, call it, "infusion options" since it's not a rapid infusion -- it's not a simple subcu similar to Kesimpta, but it's a process which will take 10 to 15 minutes. It will require significant nursing attention to get that in, which we think also will deter from centers getting too excited potentially about using it as a more efficient product. There's nothing more efficient than setting up an hour infusion for multiple patients and sitting there. So we do think that the Briumvi is setting the standard. We're excited that investors and our competitors are excited about trying to improve the patient experience and try to compete with us in that patient experience. But for the next year or more, we're going to have a monopoly on that part of the market and potentially longer, and we'll see what their product looks like. So I think overall to us, it's all net positive. I think it highlights the fact that -- there is a need in the marketplace for a more convenient product and Briumvi is the gold standard today. Sean, do you want to tackle that R&D difference.

Yes, sure. Thanks for the question. The increase in R&D over the first quarter of '23 relates primarily to a milestone due to LFP on the EU approval of Briumvi, $6 million.

And our next question is from Roger Song with Jefferies.

Great. Maybe, Mike, if you can you give us a little bit of color around the ex-U.S. deal regarding the buyback options, what's the term associated. For example, what will be the valuation for the buyback? And would that be tied to the commercialization results?

Sure. Thanks for the question, Roger. So Yes, the buyback option is basically designed to provide Neurax a return essentially on investment. So whatever they pay us, we basically will pay them back that amount plus a return on their investment. So we think it's a very reasonable approach. I think it accounts for the risk that they're taking in building out what they need to build out to commercialize and building out the market for us and then losing that. But it's also not punitive at all that would inhibit our ability to conduct a strategic transaction.

Got it. Yes. That's helpful. And then in terms of the sales we all track IQVIA and the Symphony seems the number in terms of dollar value pretty on track from at least from Symphony. So we know your market this through the specialty and that you have your own hub. So how should we think about reconsolidation of marketable third-party database versus your Q-on-Q sales number?

Yes. So I'll take a quick crack at this, and I'll let Adam talk -- speak on this as well. But we've been cautioning all along that trying to create some sort of reconciliation between Symphony or IQVIA and our numbers at this point is not a useful endeavor. We have said that we believe that over time, once we have several quarters to maybe more than several quarters, of utilization that will reach what I've described as steady state. And at that point, I think people can probably take that data and try to use a multiplier effect or some sort of algorithm to calculate what the sales are going to be. But since we're so early in the launch, I think that's a pretty dangerous game to play and we've warned everyone multiple times publicly in every setting we can that, that's not a good idea at this point to try to gauge. Having said that, we -- sales for the -- the net sales for the quarter were ahead of our expectations -- were ahead of all of Wall Street's expectations, honestly, until about 2 days ago. So we think it was a very good quarter. We're obviously super excited about it. We're right on track of where we want to be. So it's obviously a little disheartening when folks somehow changed the consensus 2 days before the reporting and then assume that it was a bad quarter. And similarly to use Symphony numbers to try to gauge what that sales number is going to be, again, I just -- like I said, we find that to be a very dangerous game to play and we've said that multiple times. On that note, I'll let Adam add some more color there.

Sure. I mean, Roger, thanks for the question. If you look at other IV products, including in the MS space, you'll see the ratio between Symphony and IQVIA and reported net sales is often highest in the launch quarter. I think it can be -- and it does come down often. As we said, it can be perhaps helpful in understanding directional trends, but it does a poor job capturing launch dynamics that all new products experience. And as I've said and I think Mike has said, it doesn't capture sales through our direct channel. We've also said that, that's going to be highly variable quarter-to-quarter, especially in the beginning as people figure out how they want to purchase. And that will also impact the ratio between Symphony sales and net sales. So again, we recommend not using Symphony or IQVIA as a way to estimate our quarterly net sales going forward. And I hope that helps.

Our next question is from Mayank Mamtani with B. Riley Securities.

Just to quickly follow up on questions previously asked. If you could comment on inventory on average, helped by distributors and offices? And also on those -- some of those launch metrics, what percentage you're tracking for free drug sampling. And lastly, if you could comment on the TRx volumes lead between newly diagnosed versus switch patients that would be super helpful.

Adam, do you want to tackle this one?

Sure. I mean inventory is within industry standards. There's no surprises there and pretty much what you would expect. As far as the free goods, we had free goods of about 20% in the quarter. The majority of that is through our Quick Start program. And as we said before, that is a program to get patients started and eventually, our hope is that they would convert to commercial product at some point in the future. And then as far as the patient mix, we haven't said we're still not in a position yet, I don't think, to comment on the percentages. But what we have said is we've seen a nice distribution across all 3 segments, both newly diagnosed and switches, both from CD20s and non-CD20.

Great. And maybe, Mike, if you could comment on the bidding process for the ex-U.S. deal and would be really helpful to understand how much the sort of competitive nature of MS marketplace especially in context of BTK inhibitors coming down the pipe? And also, obviously, you commented on subcu, -- like how much of that is sort of part of that discussion because obviously, your partners or future even strategics would want to incorporate that as part of the long-range planning.

Yes. Thanks. So yes, so look, we've said for quite a while that we're going to do the analysis on whether we should go to loan in Europe or we should seek a partner to help us evaluate that and make that decision. We engaged with JPMorgan to run a -- what I think was a very professional, very competitive process to see what kind of economics we can get on an ex-U.S. deal. It was a competitive process. Neuraxpharm was clearly the most eager and hungry and provide us with the best economic terms, but also, we felt the best overall terms in terms -- especially with respect to the strategic flexibility that the deal offers us, so the combination of the deal terms, the economic terms plus the buyback option really made the Neuraxpharm, the top choice. And I think culturally, they're a great fit with us. I think we'll be able to work closely with them. And I think we can help them with what we've learned in the U.S. And I think in terms of their ability to execute on this plan, we're feeling very confident and very good about it. So really, to us, the deal kind of offers us everything we wanted. It's almost a hybrid way of getting Briumvi to the market as quickly as possible without cutting off our strategic options. So that was the process, and like I said, is very competitive. In terms of the BTKs or the subcu, I think most folks are quite comfortable with the what that competitive landscape is going to look like in the future in terms of the real risk of BTK and the real risk of subcu. So I don't think that was a major consideration in the process.

Maybe just one more question, Mike. On the guidance, at some point, I think you had mentioned you might be 1, 2, 3 quarters away from maybe having a good idea of what demand looks like to be able to put out a guidance number, like I would love to hear your most recent thoughts on that and if that could come into the picture at some point.

Yes. I mean in terms of U.S. revenue guidance, Mayank? And when we may be in a position to do that? Yes I think we are -- and what I've said in the past is probably going into next year, we'll be in a much better position to give some sort of guidance. I think for the remainder of this year, we're going to keep to ourselves, and we're going to keep working on it. But I think, like I said, this quarter, we exceeded our expectations, we exceeded the Street expectations until about 2 days ago when they change. But short of that, we feel like we're on track and we're doing great in terms of where we're heading. But yes, my guess is that we'll probably wait to get this whole year under our belt, we'll get a good sense of how the sales are tracking. One we'll have -- we'll know how many -- at that point, we'll know how many patients we treated in 2023, which will give us a base case for 2024. We'll know where we are in terms of new patient starts in the fourth quarter of '23, which will help us start to think about what the first quarter of '24 will look like in terms of new patient starts. So I think we'll just have a lot more information to be in a better position to do that. We'll also understand the dynamics. We're still so early on in this process. We don't have the full dynamics of prescription to the hub to total prescriptions to total infusions, right? So because at the early phases, we're going to be -- it's going to take longer to go from prescription to vein as that compresses over the next few quarters. Then once…

Makes a lot of sense. Again, congrats on the progress and look forward to an equally exciting second half.

Thanks, Mayank. I appreciate it.

Our next question is from Michael DiFiore with Evercore.

Congrats all the progress. A few for me. Number 1, like how should we think about uptake adoption in the EU, just considering the back-end loaded nature of the deal? And I have 2 follow-ups.

Yes. So Adam, do you want to talk about uptake in adoption in EU.

Yes. Michael, thanks for the question. As you know, Europe is -- it's a country-by-country approach, each country having a slightly different reimbursement time line. And I think Germany is first and then we will layer in other countries as they come aboard from a reimbursement standpoint. So that process does take some time and will play out over the next year to 2 in terms of getting up to full speed in Europe. Hopefully, that answers the question.

Okay. Also separately, in the past, you said that among MS patients opting for anti-CD20 treatments roughly 30% prefer subcu. My question is, how do you see this changing over the next 12 months as Alzheimer's therapy is gradually encroach on the infusion share capacity. Could this 30% figure increase as it gets harder and hard for patients to schedule share time?

Yes. I mean I think that plays into the Briumvi value proposition. So again, if you're an infuser, you want to optimize your infusion suite. And so I would assume instead of sending out patients for subcu, you prefer to keep them in-house. Again, there's a lot of good reasons that I hear it all the time. The doctors want to know the patient is getting the infusion. So the sending out for subcu, we think is not the first alternative. We think the first alternative is going to be switching all your patients from Ocrevus to Briumvi to free up the chair time and see how that goes. But again, we think this is something that will really play into our favor. I mean I assume there will be some uptick in subcu as a result, but I also think there will be a nice uptick in Briumvi use for that same very reason. And again, if you're -- you're going to optimize your infusion suite to the best that you can and certainly moving patients from Ocrevus to Briumvi in that setting, if that's what you're trying to achieve and getting more patients in, then we think that's a nice tailwind for us.

Finally, just any comments on gross to net metrics during Q2. Has it changed from the 70% to 75% that you cited in Q1?

I know it was largely -- yes, it was largely in line with Q1.

Our next question is from Prakhar Agrawal with Cantor Fitzgerald.

So I had a question on the quarter. The 800 prescriptions in the Briumvi hub that you reported in 2Q. So there seems to be a lag between prescriptions and the revenue reported. So could you help us bridge that gap? What is causing the lag? Is it percentage paid RXs. Gross to net seems to be stable. So like any color you could provide on that? And would you expect permanent J-Code to improve the conversion from prescriptions to patient infusions? And I had a follow-up.

Adam, do you want to take a crack?

Sure. Yes. Thanks for the question. I think as we said in the past, there is a time lag between when a script comes into the hub and when you get the actual infusion. I believe what we said is even Ocrevus that's 5 years into the market, they're averaging around 6 weeks. We continue to look at our time frame and it's in that range. And hopefully, we'll compress over time as we continue to get more insurance coverage. I don't think that J-Code will necessarily affect that, give people more confidence around reimbursement, but the increased insurance coverage and confidence around insurance coverage should help as we smooth out the process. And so over time, that number should come down.

Thanks Adam. And secondly, if the subcutaneous Ocrevus safety already looks good. Do you have any plans for a subcutaneous formulation for Briumvi?

Yes. So we've said on multiple calls that we are evaluating the physical biological properties of our material around a subcu and to understand what is feasible with Briumvi in the subcu. So that is -- that work is ongoing as we speak and we're going to make a determination at some point towards the end of the year, early next year or what we might do with that, assuming we have a profile that we think makes sense. But I think to the Ocrevus subcu point, I don't know that we've seen all the safety and tolerability data, I think it would be premature to say that it looks good. I think we haven't seen that data and we're looking forward to seeing it. I assume you will see that at ECTRIMS. So I think the jury is still out on what's the exact profile of the Ocrevus subcu and what that will look like and what the patient experience will be. Like I said, anecdotally, we do hear but there's some possibility of pain. And of course, pain is a co-primary endpoint. So it will be interesting to see how that pain endpoint stacks up against placebo. Thank you.

Our next question is from Matt Kaplan with Ladenburg Thalmann.

Just wanted to follow up a little bit on the ex-U.S. deal. Can you give us a little bit more color on the $500 million plus milestones? What would trigger those and how those could roll out?

Yes. Sean, do you want to take a crack at that?

Yes, sure. So as you may expect, they're mostly tied to sales milestones in the U.S. escalating on a tiered basis. Beyond that, not providing a whole lot more detail at this point.

Okay. And then, Sean, similarly for the royalty tiered royalty up to 30%, how should we think about that? How does that work?

I think sort of in a similar fashion escalating from double digits up to 30% is sort of what we're guiding at the moment.

Okay. Okay. And then, I guess, maybe for Adam, can you give us some more detail on the feedback that you're hearing from the different stakeholders, the payers, the doctors, patients and also infusion centers, current feedback that you're getting with for Briumvi.

Yes, sure. Thanks for the question, Matt. Yes, from a payer perspective, I think the proof is in the pudding. With 80% coverage now, they're talking with their policies and I think we're in good shape there. Patient feedback has been very positive in terms of the infusion time and ability to get in and out of the center. Infusion centers have been very impressed with the overall tolerability and the efficiency that Briumvi provides. Doctors have given us great feedback in terms of the efficacy of the drug and the 1-hour infusion as being attractive, as I mentioned in my remarks. So I would say across the board, we're getting very positive and consistent feedback.

Congrats on the ex-U.S. deal.

We have reached the end of our question-and-answer session. And with that, I would like to turn the floor back over to CEO, Mike Weiss for closing comments.

Great. So on behalf of all the senior management team on this call today. I want to thank all of our shareholders for their continued support and to the entire TG team for their tireless efforts in support of the MS community. As we've mentioned a few times today, we do believe that Briumvi has set a high bar for activity and convenience in the treatment of MS, with the goal of permitting folks with MS to live their best lives. It's really what we're here for, and we work toward it every day. And I know everyone of the company feels the same way. So with that, we are looking forward to a great and exciting second half. And thanks again for joining us, and have a great day.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.