Tg Therapeutics, Inc. Q2 FY2021 Earnings Call

Greetings. Welcome to TG Therapeutics Second Quarter 2021 Earnings Call and Business Update. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. At this time, I will now turn the conference over to Jenna Bosco, Senior Vice President, Corporate Communications. Jenna, you may now begin.

Thank you. Welcome, everyone, and thanks for joining us this morning. I'm Jenna Bosco, and with me today to discuss the second quarter 2021 financial results and provide a business update 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 our recent corporate developments as well as an update on our current pivotal programs and remaining key goals for 2021. Adam will then provide 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 regulatory milestones, clinical development plans 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, including our most recent reports on Forms 10-K and 10-Q. 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. This 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. All participants on this call will be in a listen-only mode. Now, I would like to turn the call over to Mike Weiss, our CEO.

Great, thank you, Jenna, and thanks, everyone, for joining us today. During the first half of 2021, we hope that our long-term goals and vision for TG have really come into focus for investors. Our first phase of our multi-phase strategy is now complete with the accelerated approval of UKONIQ, the first and only dual inhibitor of PI3K-delta and CK1-epsilon for the treatment of relapsed or refractory marginal zone lymphoma and follicular lymphoma. We are very proud of these accelerated approvals for patients who have failed prior therapies and have limited treatment options. We estimate approximately 8,000 patients each year will be seeking treatment in our approved MZL and follicular indications, which we see as an excellent starting point for our commercial efforts. Building on the momentum from our UKONIQ launch, we have submitted and received a PDUFA target goal date of March 25, 2022 for a BLA application requesting approval of the combination of UKONIQ plus ublituximab, our novel glycoengineered anti-CD20 monoclonal antibody, the combination of which we refer to as U2, for the treatment of patients with chronic lymphocytic leukemia. We have also submitted a supplemental New Drug Application, sNDA for UKONIQ for the same indication and received the same PDUFA date for the sNDA. We are excited about the potential to bring our novel U2 combination to CLL patients, especially those who have failed or who are not good candidates for current standards of care. CLL is a significantly larger patient population than marginal zone and follicular. We currently estimate that approximately 30,000 to 40,000 patients will be seeking a new treatment each year in our proposed CLL indication. Not only is CLL a multi-fold larger patient population than marginal zone and follicular, but we would expect the median duration of treatment to be longer in CLL as well. One other important factor to note is that we believe that 85% of our target prescribers for marginal and follicular lymphoma are the same prescribers that we will be targeting for chronic lymphocytic leukemia. So the significant efforts our team has made in building relationships for the marginal zone and follicular launch should translate nicely into our potential CLL launch. Next up in our multi-phased approach is the largest patient population we will be addressing, which is patients with relapsing forms of MS with ublituximab as a single agent. We are targeting a submission of a BLA for MS this quarter and hope to receive a target PDUFA date in the third quarter of next year. We believe our Phase 3 data supports an attractive treatment option for patients with relapsing forms of MS. Entering MS will also raise our commercial profile significantly as we expect to participate as one of only three anti-CD20 monoclonal antibodies and what is then projected to become a $10 billion to $15 billion per year market just for anti-CD20 monoclonal antibodies in the treatment of MS. But the core focus will be on the regulatory and then commercial execution of these first three opportunities, especially the larger market opportunities in CLL and MS. We will continue to seek to enhance our Hematology Oncology franchise by broadening the potential U2 label to new indications such as in marginal zone and follicular lymphoma and also into new combination uses of U2 in CLL, for example, in combination with venetoclax and our very own TG-1701. The ability to combine with standard of care agents in CLL, we hope will bring better outcomes to patients and should also broaden the potential penetration of U2 in CLL. On the MS side, we will seek to build on ublituximab potentially in other auto-inflammatory diseases, as well as seek to build additional programs in MS. With that, let me provide some recent highlights related to our initial commercial launch efforts with UKONIQ and our key regulatory efforts and development programs. First, let me just remind everyone and restate that in February, the FDA granted accelerated approval of UKONIQ for the treatment of adult patients with relapsed or refractory marginal zone lymphoma who have received at least one prior anti-CD20-based regimen, and for adult patients with relapsed or refractory follicular lymphoma who have received at least three prior lines of systemic therapy. This approval was based primarily on the results from the UNITY NHL trial, which were recently published in the Journal of Clinical Oncology. On the commercial side, UKONIQ became commercially available a few weeks following approval, and overall, I can say we are extremely pleased with the performance of the commercialization efforts to date. Launching during a global pandemic is no easy task, but under the circumstances, the team has done a really nice job in engaging target prescribers, both commercially and educationally under the leadership of our Chief Commercialization Officer, Adam Waldman. Adam will join us shortly to discuss some launch metrics and give some high-level qualitative assessments of the launch thus far. I don't want to steal his thunder, but again from where I sit, the launch is going well and I believe it is positioning us for future success with the potential approval of U2 for CLL early next year. Speaking of which, and as noted above, the BLA and sNDA for U2 in CLL have both been granted a PDUFA target goal date of March 25, 2022. For the MS Program, we were pleased in the second quarter to be able to present the positive results from our ULTIMATE I and II Phase 3 trials evaluating ublituximab in relapsing forms of MS at two major conferences, the American Academy of Neurology Annual Meeting and the European Academy of Neurology Annual Meeting. As mentioned during our last call, both studies met their primary endpoint with ublituximab treatment demonstrating a statistically significant reduction in annualized relapse rate, ARR, with ublituximab treatment resulting in historically low levels of ARR. We believe these results are highly encouraging and showcase the potential of ublituximab to provide an efficacious treatment option in a one-hour infusion every six months following the first dose. The expert feedback we have received thus far has been very positive, and our one-hour infusion is viewed as an important benefit for both physicians and especially their patients. These trials were conducted under Special Protocol Assessment with the FDA and we are on track to complete a BLA submission for ublituximab to treat relapsing forms of MS this quarter. And briefly before I turn the call over to Adam, I want to provide a quick update to our combination and pipeline programs that we hope will be drivers of future growth. Starting with U2 plus venetoclax, which has moved forward now into Phase 3 for patients with CLL within the ULTRA-V trial. The Phase 2 portion of the ULTRA-V study completed enrollment earlier this year. You may recall that at last ASH in December, Dr. Paul Barr of the Wilmot Cancer Center in Rochester, New York presented preliminary results from his Phase 1 study of the U2 plus venetoclax combination, which included results from the first 27 patients in the study to complete the 12 cycles of fixed-duration therapy. In those patients, there was a 100% overall response rate and greater than 75% of the patients achieved undetectable MRD in the bone marrow. We view these results as highly encouraging and we look forward to presenting updated data from this Phase 1 trial later this year with approximately double the number of patients through 12 cycles of treatment. Next, let's discuss TG-1701, our investigational BTK inhibitor. We were pleased to present updated results from the Phase 1 trial of TG-1701 as a monotherapy and in combination with U2 last month during the summer oncology meetings, including ASCO, EHA and ICML. We were pleased to see that with additional patients treated with TG-1701, it continued to show encouraging clinical activity paired with what appears to be a tolerable safety profile. As I mentioned earlier, we view these triple therapy trials as a way to enhance the utility of U2 in the treatment of CLL. Further in the clinical pipeline are our CD19/CD47 bispecific antibody referred to as TG-1801 and our PD-L1 antibody referred to as TG-1501 or cosibelimab. Both are moving through early stages of testing with the possibility of data later this year or next. 2021 has been a very busy year for us as we've made significant progress on both the clinical and regulatory fronts and look forward to an impactful end of year and into 2022 as we strive to expand our commercialization efforts into CLL and MS. With that, I'm excited to turn the call over to our Chief Commercialization Officer, Adam Waldman, to share some highlights from our early commercialization efforts. Adam?

Yes. Thanks, Mike. And I'm very excited to provide a commercial update for the first full quarter of the UKONIQ launch. Let me start with some numbers and then provide some qualitative assessment. As you've already seen in the financial press release, we achieved $1.5 million in net sales of UKONIQ for the second quarter, which was our first full quarter of sales. While we were quite pleased with the extent of our launch penetration, which by our estimates reflects UKONIQ capturing 3% to 4% of new patient starts in our labeled indication. In our view, that is a great starting point that is ahead of our internal projections. Importantly, our net sales figure doesn't fully capture the total demand for UKONIQ in this past quarter as the amount of free UKONIQ provided to patients through our patient assistance program has been significant. Many of our patients are covered by Medicare Part D and their out-of-pocket costs are very high due to the Part D benefit design. In addition, unfortunately, unlike CLL there is a general lack of financial systems available to support marginal zone and follicular patients with their out-of-pocket costs at the current time. This dynamic is leading to a high percentage of patients qualifying to receive free product. To give you a sense of the extent of the free product offered, we provided over 35% of the UKONIQ bottles to patients free of charge through our patient assistance program in the second quarter. As we have said over and over, we are committed to helping patients access our products and we are proud to be able to help those in need by providing UKONIQ free of charge. When we look at the volume of our overall demand, which includes free product, we are extremely pleased by the early uptake for UKONIQ. As we've stated before, our goal with this initial launch is to get as many accounts, prescribers and patients to have a positive experience with UKONIQ as we build towards the potential CLL launch early next year and we believe ensuring patient access is a strong step towards achieving that goal. Based on these early trends and current assumptions, we are targeting $7.5 million to $12.5 million in net sales for the full year 2021 assuming a similar rate of free goods for the remainder of the year to support UKONIQ for those who cannot afford it. And further, we would expect to see nice growth in our net sales for 2022 and currently we are targeting net revenues for 2022 to be between $50 million and $75 million assuming the approval of U2 by the March 25 PDUFA date allowing for partial sales of U2 in both frontline and relapsed/refractory CLL and a small contribution from ublituximab in MS for which we hope to have a third quarter 2022 PDUFA date, all of which puts us on pace for our 2025 goal of achieving $1 billion in corporate-wide sales. Now, let me provide some additional color beyond the numbers. While it is still early into our launch, we are pleased with our execution and believe we have made significant progress to date. Our strategy has been to focus on the approximately 1,000 higher-volume community and academic accounts, representing approximately 3,000 hematologists-oncologists that see the vast majority of the eligible patients in our indications. What we have seen is that most of the initial adoption has occurred within these targeted accounts, and in fact, a large percentage of the initial utilization is coming from centers that were involved in our clinical trials. In many cases, we are seeing repeat prescribing from these accounts as well, which we also view as a positive sign. And although still early, we are pleased with the initial refill rates we are seeing which we view as a reflection of both the clinical profile of UKONIQ and that providers are effectively navigating potential toxicities and keeping patients on therapy where appropriate. This growing experience builds comfort and confidence for our expanding prescriber base and our team is doing a fantastic job with educating and supporting clinicians in safely managing patients. We continue to receive very favorable feedback on the UKONIQ clinical profile. Insights from our recent launch tracking studies show strong product performance, message recall, product perceptions and importantly intent to prescribe once physicians have appropriate patients. When our teams have engaged our target healthcare providers, they see UKONIQ as having a differentiated profile and view it as a valuable treatment option for both relapsed/refractory marginal zone and follicular patients. However, gaining access to our customers remains a challenge. COVID-related restrictions have persisted affecting our ability to access all of our targeted accounts. And although the situation did improve modestly throughout the quarter, with an increasing percentage of our in-person engagements, the most recent trends in the delta variant have caused some institutions to re-institute certain visitor restrictions potentially reducing the opportunities for in-person engagements in the coming weeks and months. One other important COVID-related trend relates to patient visits. Marginal zone and follicular, as you know, are relatively small patient populations to begin with, and most physicians only see a few of these patients that fall within our labeled indications in a given year. But it appears that since the onset of COVID, patient visits and treatment starts have decreased in lymphoma across the board. Most of these patients are elderly and may have been reticent to visit oncology offices during the pandemic; we believe this continues to be an issue and we have not recovered back to pre-pandemic numbers quite yet. These trends make our initial uptake even more impressive and essentially bode well for an increasing patient flow once the pandemic is behind us. Another positive note is that payer coverage has not been a challenge to date. The team has done an exceptional job here; they have been able to achieve broad coverage of UKONIQ very quickly. More than 90% of commercial and Medicare lives have confirmed coverage to our label or NCCN compendia. We are committed to making sure that each and every eligible patient and healthcare provider has a positive experience with TG and UKONIQ. When a healthcare provider and their patient have a positive experience with UKONIQ with strong educational and access support from the TG team, we believe that the healthcare providers are more likely to prescribe UKONIQ for additional appropriate patients in the future. We also believe that this will carry through to their CLL patients, assuming approval of U2. As Mike mentioned, we estimate there's roughly an 85% overlap of healthcare providers within our target base across lymphoma and CLL reinforcing the importance of what we're doing in establishing our footprint with this launch. So with that, I'd like to thank you very much for being here. And I'd like to hand it over to Sean Power.

Thank you, Adam. And thanks everyone again for joining us. Earlier this morning, we reported our detailed second quarter 2021 financial results, which can be viewed on the Investors and Media section of our corporate website. For today's call, I'll keep my remarks brief and touch on a few highlights from the quarter, beginning with our cash position. We ended the second quarter with approximately $456 million in cash, cash equivalents and investment securities, which we believe will be sufficient to take us into 2023. As Adam noted earlier, we are pleased to report $1.5 million of UKONIQ net product revenue in the second quarter, our first full quarter of product sales. Our net loss for the second quarter of 2021, excluding non-cash items was approximately $62 million, which was a decrease of $12 million quarter-over-quarter from Q1 of 2021 where we saw a net loss, excluding non-cash items of approximately $74 million. Given that Q1 of this year was our first quarter as a fully commercial entity, it's probably a more apples-to-apples comparison to what we saw this quarter. As compared to the first quarter of 2021, the decrease of approximately $12 million was primarily driven by one-time licensing milestone payments of approximately $14 million recurring in Q1 of this year. If we shift and compare this quarter to Q2 of 2020 where we saw a net loss, excluding non-cash items of approximately $46 million, that increase is primarily related to increased selling, general and administrative expenses associated with the launch of UKONIQ and planning for the potential future launches of U2 in CLL and ublituximab in RMS. Our GAAP net loss for the second quarter of 2021 inclusive of non-cash items was $78.5 million or $0.59 per share compared to a net loss of $52.9 million or $0.47 per share during the comparable quarter in 2020. With that, I will now turn the call back over to the conference operator to begin the Q&A.

Thank you. At this time, we’ll now be conducting a question-and-answer session. Thank you. And our first question is from the line of Alethia Young with Cantor Fitzgerald. Please proceed with your question.

Hey, guys, thanks for taking my questions and congrats on the early progress with the launch. Maybe just a couple from me. One, I wanted to get a bit more color about how you were talking about during the COVID trends, just how much penetration has occurred into the roughly around, I guess, 3,000 heme/onc? And how has that ebbed and flowed like — it sounded like it might start to slow a little bit in light of the Delta variant? And then, my second question is just as far as a differentiated clinical profile in MZL and follicular, especially on safety, I just wanted to get some color around how that's going and some of the early experience. I know it's still super early, but any color you can provide there? And then I was intrigued by kind of the — when you said the 2025 $1 billion in sales, can you give us a little bit of framework about how to think about what that breakout might be between multiple sclerosis and the hematology indications? Thanks.

Yes. Mike, do you want me to take those? Hello?

I'm sorry. Yes, please. I was on mute.

Okay. Yes. Alethia, thank you. Doing this over the lines, it's a little tough, so sorry. So the first question around penetration, I think given the pandemic, and as I've mentioned before, we've hired a really experienced team; they came in with relationships and existing connections. So our penetration has been very good, especially in the top centers. The issue is with frequency and just how often you can get into these centers and with a new product, it does take multiple visits sometimes to discuss the full profile, the mechanism, the patient populations and it does take some time. To answer your question, penetration has been good, especially into the top accounts. We're working on frequency. We're starting to see that, and as I mentioned, things did get modestly better in the second quarter. We were seeing increases in live engagements, which we think is a more effective way of communicating. However, with the Delta variant in the last few weeks, we are seeing reversal of those trends. And so it's getting — we're starting to see cancer centers start to restrict live engagements again. So we'll have to watch that and see how it goes. But in general, we feel like live engagements are better. Our penetration has been good, but obviously it's a fluid situation. Alethia, can you remind me of the second question?

Feedback on the use as far as the safety differentiation that could be seen with UKONIQ.

Yes. The feedback has been really positive on the profile. They see it as very differentiated. As I mentioned before, the lack of a black box warning is seen as differentiating versus the other PI3Ks out there. And I think it just takes time for when they see a patient and when a patient presents himself, and these patients don't show up on an individual physician basis that often throughout the year. So when we're able to get good frequency of interaction and a patient shows up, that's when we're getting use. But the feedback on the product has been very, very positive. And then, as far as the breakdown in the $1 billion, as I mentioned, we expect a small contribution from MS given that we are expecting a late-in-the-year approval there. We expect to get some contribution from U2 given that we would have three quarters of use of approval. And our ability to promote U2 in CLL starting in the second quarter is our expectation. And then the continued launch of marginal zone and follicular will continue to form the base of the revenue projections.

Alethia, just to clarify, Adam was referring to 2022 in his answer.

2022, got it.

That was for 2022. For the $1 billion in 2025, I don't think we've gone as far as to say that, but I think at that point, we should be in a 50-50 or trending toward a larger contribution from MS at that point. The models that we have in forecast, there is some flux between bull and bear cases. So I think we're giving ourselves a little bit of flexibility there as well.

Okay. I guess just a follow-up. You talked about these 8,000 follicular and MZL, which could be a sizable opportunity itself. So I guess, I was just trying to get a feel between '22 and '25, how confident you are in being able to penetrate this core group over time?

I mean, in terms of marginal and follicular, we feel pretty good about the potential for penetration. Again, I don't know what peak penetration expectations are overall, but I think if we were 20% to 30% penetration that would be pretty fantastic in any group where there are multiple drugs available.

Awesome. Great. Thank you.

The next question is from the line of Josh Schimmer with Evercore ISI. Please proceed with your questions.

Thanks so much for taking the questions. First, on reimbursement and access. How do you expect to evolve from here for UKONIQ or for U2, the reasons to expect it will improve? And if so, what would those reasons be? Second, if you could discuss the pathway for full approval of UKONIQ, and what you expect will take to achieve that? And then last, maybe you could talk or even consider kind of rank ordering the obstacles to UKONIQ adoption, how much of it is COVID, how much is reimbursement, how much is awareness, how much is competitive therapies? And how you think those obstacles may alleviate in the coming months and years? Thank you.

Yes, Adam, why don't you go ahead with some reimbursement access and where you see things heading?

Sure. Thanks for the question, Josh. On the access and reimbursement front, we really haven't seen many challenges. I think, as I mentioned, we have achieved broad payer coverage and they are not experiencing any issues with regards to that. I think what you may be getting to is whether the level of free goods will change, but overall we think we're good on the access and reimbursement side. I'll take the obstacles and competitive question, and I'll let Mike talk about the full approval. I think the obstacles — yes, I mean, launching in a pandemic is difficult. When we get in front of physicians, as I mentioned there, they have very positive feedback on the product, but that's when we get in front of them and we're continuing to make progress there. And when we have those interactions, they are largely very positive interactions. From our market research, it shows that they see it as a differentiated product and one which is very compelling for marginal zone and follicular patients in our indications. I think the biggest obstacles are COVID in getting access, and a decrease in patient visits or treatment starts given the reticence of some patients to come in to start a new treatment. I think those will be the biggest challenges and I think they will hopefully alleviate when we get further down the line and move away from the pandemic going forward.

And Josh on the pathway for full approval of UKONIQ, two points: one, the CLL UNITY CLL trial will ideally support a full approval of UKONIQ in CLL; and then converting the marginal zone and follicular accelerated approval into a full approval will require a randomized trial that we're in the process of finalizing the design with the FDA, and hopefully that study will commence before year end. The concept there will be some trial that will be in slightly earlier lines of follicular and then a randomized trial with UKONIQ.

Adam, maybe you can clarify on the reimbursement, the 35% free drug — whether that's something you expect to continue or whether that may improve going forward? And if so, why?

Yes. Good clarification. So in marginal zone and follicular specifically, we're seeing a general lack of co-pay support funds available for Medicare Part D patients. A large percentage of our patients in this specific indication are Medicare Part D over the age of 65. And specifically in marginal zone and follicular, we are not seeing availability of co-pay funds. We do expect that to change with CLL. We see much more funding available on CLL and this is much less of an issue with CLL. And MS is a different ballgame altogether; we're talking about largely commercial patients, so not as relevant. So we would expect this rate of free product to persist for this year, and then as we get into CLL, we would expect it to come down as an overall issue given the funding that's available in that patient population.

Thanks very much.

Thank you. Our next question is from the line of Eric Joseph with JPMorgan. Please proceed with your question.

Good morning. Thanks for taking the questions. First is around your 2022 sales guidance. I'm just wondering what that anticipates in terms of CLL penetration and whether there is any anticipated impact to UKONIQ net price as combo therapy as opposed to use as single-agent in follicular and marginal zone. And then I'd also be curious to get a sense of what your latest thinking is around the European commercial and regulatory strategies across the different franchises, both in heme and ublituximab in RMS? Thanks.

Thanks, Eric. Adam, do you want to take a crack? Let me take a crack at the first one.

Why don't you start and then I'll weigh in.

So in terms of CLL penetration, given the point in time of the year that we'll get launched, which will likely be into the second quarter, there will be some contribution from CLL in the year. In terms of the amount of penetration, we've used conservative penetration numbers for 2022, even more modest than what we're seeing now with UKONIQ in MZL and follicular. And then in terms of UKONIQ pricing as part of the package, we have not finalized pricing yet. It's hard to give too much detail because we haven't given guidance on ublituximab pricing. The most likely scenario will include some discounting to UKONIQ in that setting, but it will be a function of how we price ublituximab and how the package comes together to arrive at a total price we think is fair for the patient population.

Got it. Second, any latest opinion on approaching the European commercial opportunity perhaps with the various product franchises?

We're still scoping that out. We are moving forward; I think the first application ex-US may be in MS, so we may end up staging it MS first and then CLL second. The MS opportunity in Europe is interesting and can be managed with a smaller team than in the U.S. Pricing in Europe will be a big driver of uptake. We're still exploring to make sure our assumptions are valid. But assuming they are, we think there's a pretty interesting opportunity for a European launch in MS while we continue to scope out how pricing and CLL interplay ex-US. For the moment, we're likely to head forward with MS first and then CLL second ex-US.

Okay, great. Thanks for taking the questions. Appreciate it.

The next question is from the line of Chris Howerton with Jefferies. Please proceed with your question.

Great, thanks so much for taking the questions. Congratulations on the progress. First, with respect to the U2 plus venetoclax trials, I couldn't quite remember what the regulatory path is. Would the Phase 2 study be sufficient for an accelerated approval opportunity? I guess, is just a pretty simple question. And then with respect to the Phase 2 study itself, what would be the expected data disclosure? I know there was at least in my head some anticipation that we would get some of the data at ASH, but it might not be the full results. So I guess, some thinking around that would be helpful. And then the last question was just ensuring that everything is good to go with respect to CMC, particularly as it relates to ublituximab? Thank you.

So in terms of the U2-VEN program, we've been focused on multiple phases. We had a Phase 1 that Dr. Paul Barr conducted as a lead investigator, and that Phase 1 is what we've presented previously at last year's ASH, and it's what we've been committing to present later this year and update too. We had 27 patients through 12 months in the first cohort and we're looking for somewhere between 40 and 50 patients through 12 months for the completion of that portion. So that is the U2-VEN data that we've been talking about as being presented later this year. In terms of ULTRA-V, enrollment completed earlier this year into the Phase 2 portion. To have all the patients through 12 months would not occur until after ASH. We would need to be prepared for ASH probably two months prior for the data, so the ULTRA-V data set will likely be incomplete for this ASH. If we could present a partial data set it would be a function of what the principal investigator wants to do. My general feeling is that it probably will not occur this year. If I were the PI and close to having all patients through 12 months, I wouldn't want to release a partial set when I could do a full set within a reasonable timeframe. We'll wait to hear from the PI. For the moment, I wouldn't be surprised if he opted not to present a partial data set. In terms of the regulatory side, once we have the full Phase 2 data with all patients through the 12-month time point, we'll look at that data and have a conversation with the FDA. Ideally, U2 would be approved at that time. There's no assurance that the Phase 2 data would be usable for approval. If it's not usable for approval, of course, the Phase 2 data will be published, we'll send it to NCCN and see if they're interested in adding it to their guidelines. The Phase 3 is enrolling as we speak. That's the current status.

Great. Okay, that's awesome. And then, I guess just anything to note on CMC?

Nothing of specific concern. We filed the CMC; I believe it was the first section we filed as part of the rolling submission for ublituximab in the CLL application. The FDA has been reviewing that file and there's been the typical dialogue back and forth. That's the process that is ongoing but nothing to the team's great concern as far as I know.

Okay, fantastic. Well, thank you, Mike. Appreciate it, and hope to talk to you soon.

The next question is from the line of Ed White with H.C. Wainwright. Please proceed with your question.

Good morning. Thanks for taking my questions. Maybe the first question to Sean, you gave some guidance on SG&A expenses trending higher. I was wondering if you can make any comments on R&D. I know there was the $4 million charge in the quarter. But how should we be thinking about the second half of this year?

Sure. Thanks, Ed. SG&A trended higher compared with last year and the prior quarter, of course, as you'd expect given the commercial launch. I think it will continue to tick up a little over the rest of the year as we prepare the CLL and MS launches. I wouldn't expect much change on the R&D front; there shouldn't be a lot of volatility for the remainder of the year.

Okay, great. Thank you. And then, Mike, just some pipeline questions, you had just commented on ULTRA-V Phase 2. Can you give us any update on how the Phase 3 enrollment is going? Are there any trends you can look at now to let us know when you think the trial will be fully enrolled? And then you had mentioned data later in this year for the Phase 1 trial. I'm just wondering for the other combinations and drugs in development, what we could potentially see at ASH this year?

In terms of full enrollment into ULTRA-V Phase 3, it's too early to give a good projection; we started about a month or two ago so we're in very early days and it's going quite well, but we'll need to see a bigger ramp to give better timing. In terms of data for the rest of the pipeline later this year, we continue to enroll more patients in the TG-1701 BTK study and that will continue to produce data at upcoming conferences. TG-1701 will continue to provide updated data. CD47/CD19 and TG-1501 are in early stages; I cannot promise data this year, but it's possible later this year and certainly into next year. For the remainder of this year, the final Phase 1 U2 plus VEN data we'll see later this year, more updated data on TG-1701 to come out, and there will be sub-analyses coming out from different trials. Those are the primary data sets to expect in the remainder of this year.

Okay, thanks, Mike. And then, my final question is; you mentioned when you were talking about MS, other auto-inflammatory disease indications and other forms of MS, I was just wondering, how should we be thinking about that potential? Should we be seeing potential study starts next year? Or is this further down the road than that?

It's possible to see some studies starting next year. We're working on a few concepts, and if they come to fruition, then yes, I would expect some studies to start next year. We'll keep you posted.

Okay. Thanks, Mike.

The next question is from the line of Graig Suvannavejh with Goldman Sachs. Please proceed with your question.

Yes, thanks. Good morning. I've got a couple of questions, if I could. One, on UKONIQ and it might be too early for you to comment, but can you provide an update on the number of accounts that you've penetrated and if — this might be too early — if you're seeing any reordering? I'm trying to get a sense of what the ordering pattern dynamic might be for UKONIQ. And then a follow-up on UKONIQ: it seems as if the way you're positioning the product relative to the portfolio is that it's a very good product for patients and prescribers to get an overall good experience with TG Therapeutics. With that in mind, I was wondering if you might be comfortable providing what you currently believe the peak revenue opportunity for UKONIQ might be? And then moving beyond UKONIQ, looking at the MS landscape, any color you can provide on what you're seeing in the anti-CD20 marketplace. You've got Ocrevus and Kesimpta is relatively new, but can you comment on how you're seeing Kesimpta in that launch and how that's impacting either Ocrevus or the overall anti-CD20 market?

Yes, Graig, I'll start. We just saw Roche and Novartis' recent commentary on their launches. The anti-CD20 class is on a growth trend and Kesimpta is getting traction, but both appear to be holding steady. We're encouraged; physicians continue to be excited about the class and using these products earlier in disease treatment. Now on UKONIQ accounts and reordering: where we're seeing usage is in our top accounts; the split we're seeing is about 60/40 academic to community. We are seeing reordering from accounts. Much of the product flows through specialty distributors so we don't have perfect granularity yet, but we are seeing reorders and refills. As for peak revenue for UKONIQ specifically in MZL and follicular, our view hasn't changed: we still see this as a significant opportunity. We've said before that marginal zone and follicular could be a few hundred million dollars in peak revenue in a bull case. Remember, currently a large percentage of our units are being provided free of charge to patients, which affects the net sales numbers today. But our positioning for this launch has been primarily to establish TG's presence and build relationships that will carry into CLL. That said, if we were to achieve somewhere in the order of 20% to 30% penetration in these indications, that could translate to a multi-hundred million dollar opportunity over time.

And Graig, just to clarify my earlier comments on reordering: we're seeing reordering both in terms of multiple patients from the same accounts and in terms of refills as well.

Okay, thanks for that.

The next question is coming from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

Hey, good morning, guys and thanks for taking the questions. Just a little follow-up on the ULTRA-V program. Can you give us some more color on the ULTRA-V Phase 3 study design? Are there any differences from the Phase 2 portion of the study?

The Phase 3 study design is U2 plus venetoclax versus U2. Regarding dosing, I need to double-check specifics, but we may be using up to three months more of venetoclax than in the Phase 2 portion to align with the current venetoclax schedule. Otherwise, there aren't major differences.

Great, helpful. And then, with respect to your BTK inhibitor program, TG-1701, you presented some positive data recently at the medical meetings. What are your current thoughts on the regulatory path or have you identified pathways to continue developing the product?

We feel really good about TG-1701. The performance has been impressive. We've spent time trying to understand differences between doses and tolerability. Our goal is to identify the most tolerable regimen. We're working hard on that. In terms of registration, we have a few good opportunities and expect to be in a Phase 3 for TG-1701 by early next year.

Okay, very good. And last, on autoimmune indications beyond MS for ublituximab, what's your current thinking on where you might bring the product next?

We haven't given guidance on that yet, but we're scoping out a number of opportunities. As soon as we have plans in place, we'll disclose them.

Congrats on the recent progress. And thanks for taking the questions.

Thank you. Our final question is from the line of Mayank Mamtani with B. Riley Securities. Please proceed with your questions.

Good morning, team. Thanks for taking our questions and appreciate the helpful detail here. Quick one, Adam, on the UKONIQ launch: any early color on what the real-world discontinuation and maybe progression rate might be just to — I know it's early days, but just to get a handle on what the duration of therapy might be? And then I have a couple of quick follow-ups.

Thanks for the question, Mayank. It's too early honestly to comment on discontinuation or progression rates. We need more time to see real-world patterns before we can provide meaningful commentary.

Okay, great. And then, Mike, on the near and long-term guidance, any color on the path to profitability, number one? And then also on the 2025 number for sales, does that include a partner for MS sales?

The 2025 projection does not include a partner for MS sales. In terms of a path to profitability, if we achieve the goal of $1 billion in sales by 2025, my expectation is that the company should be profitable by then.

Okay, great. And on the pipeline side, anything next we should expect to hear for the CD19/CD47 and maybe IRAK4 program? IRAK4 is of increasing interest to investors; what's the plan there?

In terms of IRAK4, that program is likely not moving forward for some time. For CD47/CD19 (TG-1801), it is moving forward nicely; we've opened sites in the U.S. and we hope to have data later this year, if not later this year then into next year.

Okay, thanks, Mike. And congrats again on the progress.

Thank you. We have reached the end of the question and answer session. I'll now turn the call over to Mike Weiss for closing remarks.

Great. Thank you very much. And thanks, everyone, again. Just want to wrap up today's call by once again reviewing our upcoming key goals and objectives. We're going to continue to focus on the commercialization efforts of UKONIQ in relapsed/refractory marginal zone and follicular and expand those commercial capabilities in preparation for potential launch of U2 in CLL and also for ublituximab in relapsing forms of MS. We are working hard towards submitting our BLA for ublituximab in the treatment of relapsing forms of MS this quarter, based on the positive results from the ULTIMATE I and II Phase 3 trials. We will continue pushing hard on enrollment into the ULTRA-V Phase 3 trial, and enrollment into TG-1701 Phase 2 and hopefully starting TG-1701 Phase 3 early next year. We will continue to push forward with the pipeline of TG-1501, the PD-L1 antibody, and TG-1801, the CD47/CD19 bispecific. We've talked about potential data presentations for later this year and we are working very hard to obtain approval for U2 in CLL by the PDUFA goal date of March 25, 2022. On behalf of all of us at TG, I'd like to thank everyone for joining us today and have a great day.

Thank you to everyone joining us today. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.