Tg Therapeutics, Inc. Q3 FY2023 Earnings Call

Greetings, and welcome to the TG Therapeutics Third Quarter Earnings Update Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jenna Bosco. Thank you, Jenna. You may begin.

Thank you. Welcome, everyone, and thanks for joining us this morning. I'm Jenna Bosco, and with me today to discuss the third quarter of 2023 financial results 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. Adam will share an update on our commercialization efforts, and Sean will give an 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, revenue guidance, clinical development plans, and expectations for our marketed 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 later 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. Now I'd like to turn the call over to Mike Weiss, our CEO.

Thanks, Jenna, and good morning, everyone. Thanks for joining us on today's call. It was another good quarter for TG, and I'm happy to share that our net revenue for the third quarter was $166 million, which includes $140 million that we received as an upfront licensing fee from our ex-U.S. partner, and also includes over $25 million of Briumvi net sales in the U.S. Today, I am pleased with the launch, and our team's execution of our launch strategy would be an understatement. We continue to outperform our internal expectations and all external revenue expectations set at or prior to our launch. I believe we're in a great position to close out the year strong, and I'm excited for the next year and for the future of Briumvi and TG. Just to remind everybody, Briumvi is the first and only anti-CD20 monoclonal antibody approved to treat patients with relapsing forms of multiple sclerosis that can be administered in a 1-hour infusion twice per year following the starting dose. In clinical trials, Briumvi provided robust efficacy with a safety profile consistent with what is expected of the CD20 class. It's worth noting that while all anti-CD20s target the same protein, they are not all created equal. Epitope binding and the potency of that binding, as well as our ability to engage immune factor cells, are different, and we're seeing these differences begin to resonate amongst healthcare providers. Putting the whole package together, we see Briumvi as a differentiated anti-CD20 with best-in-class attributes and believe BRIUMVI's differentiated profile has supported our early and meaningful market share gains. I don't need to remind you that we're only in our second full quarter of sales, so still very early days here for our Briumvi launch, and we believe that we are well-positioned for future share gains, ultimately driving us toward our goal to be the number one prescribed anti-CD20 based on dynamic market share. I'd like to spend a few minutes talking about the recent ECTRIMS conference in Milan. ECTRIMS is the premier global MS conference, and TG had a significant presence there this year. For me personally, it was great to interact with many healthcare providers, and the real-world feedback was overwhelmingly positive. It was really gratifying to hear anecdotes about the tolerability and convenience that people are experiencing with the use of Briumvi, as well as stories about patients that were early depleters on other anti-CD20s and are now doing well on Briumvi. In addition to interacting with the healthcare providers at the conference, we had the opportunity to present additional exploratory analysis from the ULTIMATE I and II Phase III trials of Briumvi in relapsing forms of MS, as well as the first data from our ENHANCE Phase IIIb trial evaluating patients who switch from another IV anti-CD20 therapy to Briumvi. One of the goals of this trial is to understand the safety profile of a patient switching from another IV CD20 to Briumvi without the need for the 150-milligram starting dose, as well as to evaluate the speed at which the first infusion before the 450-milligram dose may be given safely. The early data presented was very encouraging, demonstrating in 12 patients that we could safely skip the 150-milligram introductory dose and go straight to the 450-milligram dose. In the first cohort, that was given as a 2-hour infusion and demonstrated that there were no infusion-related reactions reported nor any dose interruptions or delays. The second cohort is now enrolling and is evaluating the 450-milligram dose administered in the ordinary 1-hour infusion, again without the need for the 150-milligram introductory dose, and we look forward to sharing more data from this trial next year. Interestingly, about 60% of the patients who entered this study reported to have experienced a wearing-off effect or what some people refer to as the 'crap gap' while on their prior IV CD20. So that's something we're going to continue to look out for. While we were in Milan, we also had the opportunity to meet our colleagues from Neuraxpharm, our ex-U.S. partner. 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. Our team has been working closely with the Neuraxpharm team, and we continue to be confident in their ability to bring Briumvi to the market in Europe. With their extensive experience in the CNS space, their broad presence in all major European countries, and an extensive and growing team dedicated to the Briumvi launch, we believe Briumvi is positioned for success in Europe. We are anxiously awaiting the Briumvi launch, which we believe is still on track for early 2024. We are also happy to share that we just received approval for Briumvi in the United Kingdom. This is another exciting step forward for Briumvi and for MS patients in the U.K. looking for a new treatment alternative. As we look forward, we are evaluating additional potential indications for Briumvi and our pipeline candidates, as well as new product opportunities in MS and autoimmune diseases. Also, as I've mentioned before, we're evaluating the suitability of Briumvi as a subcutaneous injection. We expect to be able to provide an update early next year regarding whether we believe we have a suitable subcutaneous formulation that could be brought forward into the clinic. Based on the current anti-CD20 subcutaneous landscape, we believe there is room for a more convenient, more tolerable option. We continue to view the subcutaneous market as distinct from the IV market and thus as a potentially attractive expansion opportunity for Briumvi. Finally, let me discuss some financial matters. Our CFO, Sean Power, will join us in a bit to provide a more detailed financial update, but I just wanted to discuss some revenue expectations and our cash position. First, with respect to revenue expectations, many of you have witnessed the market effects associated with analysts changing their revenue forecast for Briumvi. Some of those changes have been driven by prior quarter sales, but some have been driven by intra-quarter sales reporting from distributors, which, despite our warnings about the usefulness of this data, has become a source of confusion and price volatility. To address this, beginning on November 1, our distributors will no longer be sharing distributor-level data with third-party companies. With that, as promised, I'd like to provide some guidance for the fourth quarter of 2023. At this time, we are targeting revenues of approximately $33 million to $37 million. That should put us on target for approximately $82 million to $86 million for our first partial year of sales, which is a bit ahead of the current 2023 consensus of $80 million and well above the consensus of $72 million set around the time of our launch. Now turning to our cash position. As of the end of the third quarter, we had approximately $229 million in cash. As I mentioned on our last quarterly call, as our revenues grow, and we continue to operate with a relatively stable OpEx, our cash burn is trending down. And from here, we believe we have a reasonable line of sight to profitability in the near term. All in all, we feel really confident with our cash position and our ability to execute on our business plan. With that, let me turn the call over to our Chief Commercialization Officer, Adam Waldman, who will provide more detailed information about our Briumvi launch.

Thank you, Mike, and good morning, everyone. I'm pleased to be with you today to share another strong quarter of execution for our Briumvi launch. We continue to deliver results that exceed expectations and set the foundation for future success. The third quarter net sales for Briumvi were $25.1 million, representing 57% growth quarter-over-quarter. This growth was primarily driven by increases in new patient infusions, reduced logistical barriers, and continued steady growth in patient demand, as represented by over 900 prescriptions into our hub. That brings our launch-to-date total to approximately 2,200 new patient prescriptions. As we have mentioned in the past, we believe this figure is capturing about 80% to 90% of the total new Briumvi prescriptions written. As Mike mentioned, with approximately 40,000 MS patients starting treatment with CD20 each year in the U.S., our patient accumulation remains on target. Based on prescriptions to our hub, we are now capturing a nice portion of the new anti-CD20 patient share at this early point in our launch. And we do believe that the CD20 market is growing and will continue to expand going forward. Additionally, in Q3, we saw, for the first time, patients returning for their week 24 infusions, and we anticipate the number of week 24 infusions will increase significantly in Q4 as more patients are expected to return. From an execution perspective, we remain focused on our initial priorities to drive adoption in the high-volume targeted accounts, provide best-in-class patient support, enable access, and educate patients. We have made great progress across all of these priorities. The cumulative effects of what we've accomplished are certainly helping to drive the momentum we saw from Q2 to Q3, and we expect to see that momentum carry forward into Q4 and into next year. We continue to believe the Briumvi profile is best-in-class and will eventually be the IV therapy of choice for the relapsing MS market. BRIUMVI's unique 1-hour infusion every 6 months delivers on patient convenience, reduces healthcare resource burdens, and helps to address the needs of both private practice infusion centers and busy academic centers. The real-world experience with Briumvi continues to grow, and the feedback we received is overwhelmingly positive. As we continue to progress towards our goal of making Briumvi the go-to IV CD20 therapy, there is nothing more valuable than positive physician, nurse, and patient experience. We believe growing experience will help reinforce the differentiation of Briumvi and lead to expanded utilization in the future. Encouragingly, we are seeing increases in both breadth and depth with our prescribers. We are seeing more and more prescribers and centers get their initial experience with the drug, and we are now up to approximately 500 total prescribers at more than 325 centers that have used Briumvi. Importantly, the adoption rate at top centers of excellence continues to increase with now 90% of the top 50 centers and 80% of the top 100 centers having utilized Briumvi. Depth is also increasing from early adopters, with significant increases in physicians that now have multiple patients on Briumvi. We view increases in repeat users as an important metric, as we believe it likely represents a positive experience using the product. We have always known that the process of accessing Briumvi was going to be a critical success factor for this launch. We are very pleased with the feedback we have received from customers on their interactions with both our people and our patient support services to date. We are very proud of the patient hub programs that we have built to support patients, and our field teams have done a tremendous job engaging with our customers. We believe our efforts here are contributing to the positive experience with Briumvi and building confidence in our organization in general. We continue to focus on moving patients from the hub to the infusion as quickly as possible, and we are seeing improvements here over time. Continued improvement in payer coverage is facilitating our ability to do that. We are now up to 95% coverage for commercial and Medicare lives, exceeding our corporate goal for the year, and we believe this will enhance access to Briumvi moving forward. In addition, the permanent J-Code has now been loaded in the payer systems, and our average selling price has been published, all of which should help build confidence in reimbursement. We have made progress in the quarter with major institutions and health systems. We have secured an increased number of institutional formulary wins for Briumvi. And importantly, we have seen our first prescriptions in infusion this quarter from several of the top academic institutions and highest volume MS centers. We are confident prescribing at these institutions will expand moving forward as they gain more and more experience and fully integrate Briumvi into their systems. Finally, our research indicates that patients play an important role in selecting their therapy for MS. With that in mind, and now that we've made great progress on building awareness with our healthcare providers and gaining broad insurance coverage, we have significantly increased our patient activation tactics and are starting to see the impacts of those efforts. In September and October, we generated substantial increases in overall impressions through our digital media efforts, and we are already seeing the impact in website visits and increases in patient requests for Briumvi. I can say with certainty that our team has built a strong foundation for success, and we are determined to build upon this. Going into the fourth quarter, we have solid momentum behind us: 95% coverage in place, decreasing logistical barriers, positive growing experience with Briumvi, and an increasing number of patients coming back for their week 24 infusions. We remain confident in the short run that we'll see deepening utilization with our current base, and we'll continue to unlock more accounts going forward. We are also confident that in the long term, Briumvi will become the IV CD20 of choice for patients with relapsing forms of MS. We certainly have more work to do, but we continue to make progress, and we are ahead of where we thought we'd be at this point, and we are extremely motivated to continue to work every day to bring Briumvi to those people living with MS and their families. With that, I'll now turn the call over to Sean Power, our CFO.

Thank you, Adam, and thanks, everyone, for joining us. Earlier this morning, we reported our detailed third quarter 2023 financial results, which can be viewed on the Investors & Media section of our website. I'll start today's call by recapping some of the financial highlights from this morning's release. For the third quarter, we are pleased to report total net revenue of approximately $166 million, which is comprised of $25.1 million in Briumvi net product sales and $140 million in license revenue stemming from the upfront payment for our ex-U.S. commercialization agreement with Neuraxpharm. This brings our total net revenue for the 9-month year-to-date period to approximately $190 million, which includes approximately $49 million in Briumvi net product sales. On the back of the reported revenues, we were able to report net income in both the 3- and 9-month periods. Net income for the 3-month period was approximately $114 million or $0.73 per diluted share and net income of $27 million or $0.19 per diluted share for the 9-month period. Our OpEx during the period has remained well controlled and within previously guided ranges. For the third quarter, our R&D and SG&A operating expenses totaled approximately $48 million and approximately $38 million when excluding noncash compensation. Over the course of the year, we have continued to invest in Briumvi inventory, with approximately $34 million now on our balance sheet, of which $24 million is reflected in the current quarter cash burn. And finally, from a cash standpoint, we ended the quarter with approximately $229 million in cash, cash equivalents, and investment securities. As Mike touched on earlier, we feel comfortable that our existing cash when coupled with modest Briumvi revenue assumptions, provides us with sufficient capital to fund our operations to cash flow positivity. With that, I will now turn the call back over to the conference operator to begin the Q&A.

Our first question is from Ed White with H.C. Wainright.

Congratulations on a great quarter.

Thanks, Ed.

So Mike, I just wanted to get your thoughts on the anti-CD20 market penetration within the overall MS treatment landscape and your thoughts on infusion versus subcutaneous injections going forward?

Yes. So I'll do a little bit about subcutaneous. I'll let Adam take the first half of that question about the growing CD20 market. But yes, I mean, my impression of the infusion versus subcutaneous market is that the infusion market is growing, but the overall market is probably growing faster, and that's probably because the subcutaneous market is expanding into areas in which the IV market never penetrated. So I think we're seeing subcutaneous penetrating out into more general neurologists. Again, it's centers that probably were not already using or had very limited use of IV CD20. So we think that the IV market will continue to grow. Our focus continues to be on centers that are involved in IV therapy, and I think we're leaving it for the bigger players here to work on the general neurologists. As they expand, they're using CD20s and entering subcutaneous and potentially into IV; we could then tag along and introduce Briumvi in those centers. Adam, do you want to talk about CD20 as a part of the overall MS treatment landscape?

Sure. We estimate that around 80,000 patients are entering this dynamic market each year, comprising those starting a new treatment for the first time or switching from another therapy. Approximately 50% of these, or about 40,000 patients, are expected to start treatment with a CD20 therapy. We believe, as Mike mentioned, that the CD20 market is experiencing growth and expansion, which is our perspective on the MS market and the role of CD20 therapies within it.

Okay. Can you share your thoughts on the real-world number of patients who are switching from other CD20 treatments to Briumvi, especially in relation to the ENHANCE trial?

Sure. Adam, can you take that one?

Yes. We previously mentioned that we did not anticipate many patients switching from either IV CD20 or subcutaneous CD20, which was not included in our initial estimates. However, we have noticed this happening, and it has surprised us how significant the shift has been. Physicians cite several reasons for these switches, with the primary one being the shorter infusion time of Briumvi by one hour. Additionally, we are increasingly hearing about the early wearing-off effect associated with other CD20 treatments, referred to by patients as a 'crap gap.' This has prompted physicians to try Briumvi in hopes of achieving a better response. Our observations of this trend have been unexpected and notable.

And perhaps my last question would just be how much free drug through the Quick Start program did you see this quarter? And what are your expectations for that going forward?

Sure. Yes, free goods remained at around 20% this quarter, very similar to last quarter. The majority of that is Quick Start. We do expect, now that we have 95% coverage in place, that we will see a drop in free goods going into the fourth quarter and continuing forward. So I can't exactly tell you how much of a drop, but we do think it will be less than what we're seeing in the first 3 quarters so far.

Our next question is from Roger Song with Jefferies.

Great, and congratulations on a successful quarter. I have a couple of questions. First, could you provide more details about the composition of patients using Briumvi? Specifically, what is the breakdown between new patients, switch patients, and renewed patients? I believe you are beginning to see some renewed patients. Additionally, I'm curious about the trends you've observed in the recent month of the fourth quarter regarding these patients.

Yes. Adam, would you like to address that? Are you referring to the ratio of new patients compared to returning patients for their infusions?

Is that the question, Roger? Or is it visit how many new versus switch patients? Can you just clarify the question before I answer?

Yes, sure. So basically, we have 3 categories of the patients: new patients, new to the CD20; switch from other CD20; and also the renew for the Briumvi patient. Maybe just qualitatively how you will characterize those 3 categories?

Got it. Sorry, I misunderstood you. Go ahead, Adam.

We have observed a good distribution among the three patient groups. We are seeing a solid percentage of new patients starting therapy, the largest share is coming from patients switching from non-CD20 therapies, and there is also a considerable number from existing CD20 patients, which is exceeding our expectations. Overall, the distribution is quite balanced across these groups, with a slight emphasis on patients switching from non-CD20 therapy.

Got it. Another question related to revenue is about the prescriptions you report and the corresponding revenue. What are the key factors influencing the final net revenue from these prescriptions? For instance, will patients adhere to their treatment, and how do free drugs and gross to net play a role? Are these the main factors affecting the conversion from prescriptions to revenue?

Adam, you want to keep going? You're on a roll here.

Sure. It's important to recognize that there is a delay from when a patient arrives at our hub to when they actually receive the infusion. Additionally, while you mentioned compliance, we also know that some patients enter the hub but never progress to receiving an infusion. These factors, along with the ones you already mentioned, are significant. Yes, that’s all I can think of. Does that answer your question, Roger?

No, that's great. Okay. Final question, a quick one. Mike, you have the guidance for 4Q and the overall year for 2023. Maybe when will you provide the 2024 revenue guidance? And how should we think about the trajectory from 2023 to 2024?

Yes. Thanks, Roger. So yes, we have not given any guidance on '24 yet. We're still getting our feet wet here and trying to work on how we produce guidance. So still early days for us in that standpoint. But our goal would be to, again, to the extent possible, to try to get some guidance out as early as possible next year. Again, to avoid people trying to guess what it's going to look like. So we are trying to close the information gap, so people don't use sources of information that we don't believe are reliable compared to what we hope we're seeing and looking at is creating the forecast. So yes. So hopefully, we can get something out early next year and give some guidance to get people on the right track.

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

Team, congrats also on strong execution. So maybe just continuing on Roger's sort of follow-up questions on understanding prescription volume to revenues. So Adam, when you refer to prescription volume, for example, if you have 2 loading doses, is that basically 1 prescription volume? And then the 24-week return patient, is that sort of another prescription number that basically, just from a process standpoint, is that how it works? And then, sorry if I missed that, did you say the number for your new patient share info within the anti-CD20 class? It looks like you have some mature data now to be able to say what your market share is for new patients?

Yes. Mayank, just to be clear, the only number we're reporting is new prescriptions, and they're not separate scripts. So we're not reporting week 24 scripts. We're not reporting day 15 scripts. The numbers we're giving you are new scripts for new patients coming into our hub.

Super helpful. And then on the new patient share information.

Yes, the market share, yes, I think we're just taking the calculation of 40,000 patients in the year. Approximately it's about 10,000 a quarter. And if you get 900 new into the hub. And again, we're basing that just on folks coming into our hub. That gives you a good sense of the share of the anti-CD20 market that we're getting.

Got it. And then your point on the hub to infusion time and percent rate conversion to infusion, like this trend-wise, how is that evolving? If you could comment on that. And I don't know if you commented on gross to net, if you could comment on that, too.

Sure. So as I mentioned in the prepared remarks, we are seeing improvements in time from the hub to infusion, which we would expect as insurance coverage gets better. So that's good that we're seeing that, and we're doing everything we can to decrease that time as much as possible. There are some things that we can control and certainly some things that are outside of our control. But we think that that's an important thing to focus on, and we are seeing improvements in that area. As far as the gross to net question, yes, I think what we said was in the first quarter, it was 77%. In Q2, we said it was in line with that. I think it's a good number to use from a modeling perspective across the year, but we're not going to update the gross demand on a quarterly basis.

Understood. And final question about your guidance, thinking you would give a little bit more color on new versus prior anti-CD20 switch, how should we think about that? And then also, baking in the return patients, the 24-week return patients, could you just maybe comment on how to think about 4Q and into the first half given what you're seeing?

Sure. I think I covered the distribution of patients. Here are a couple of points regarding revenue from week 24 infusions: first, a patient starting therapy receives an initial loading dose of 150 milligrams followed by 450 milligrams, which amounts to 4 vials. Each vial contains 150 milligrams. When a patient returns for week 24, they will receive 3 vials, reflecting a 25% reduction in revenue from that patient. It's also important to consider that not all patients will return from week 1 to week 24. While it's still too early to provide specific estimates for Briumvi, we do know that other IV CD20 therapies typically see about a 15% drop in patients from the first infusion to the second infusion, which is the largest decrease. The rate of dropout generally slows thereafter, with the average duration of treatment for an IV CD20 being around 5 years and increasing. So, those are two key points to consider regarding returning revenue. I hope that clarifies your question.

Our next question is from Eric Joseph with JPMorgan.

I appreciate the guidance you provided for the fourth quarter and full year. Could you share more about your internal targets to meet those expectations? I'm curious if the focus is on adding new centers, increasing share within existing centers, or perhaps leaning more toward the CD20 switch opportunity, which is somewhat unexpected. Additionally, regarding your last comment, Adam, about the 15% drop-off in expectations for week 24 infusions, is that a definitive figure, or is it more about timing, where you might be able to catch the patient but not exactly on the 24-week schedule?

Yes. Let me take that. Do you want me to go, Mike?

Yes, go ahead.

Our strategy is to keep increasing enrollments and find new business opportunities. Adding new centers and prescribers is essential. At the same time, gaining more experience seems to encourage further engagement. In this market, physicians are starting to try the product, observing how it performs and how reimbursement goes. Once they have a positive experience, they are more likely to expand their use. Many physicians have now experienced the product, received reimbursement, and are ready to broaden their base. We believe there's still a significant opportunity to expand into new centers and with new prescribers. We've made substantial progress, but there's much room for growth in academic centers, which have been slower to adopt. That said, they're starting to increase their usage. Additionally, we are seeing strong progress with our top prescribers, yet we still have ample opportunity to grow further. Regarding the 15% drop-off, we are unsure what our drop-off rate will be. However, there's published data on other IV CD20 treatments indicating that they experience about a 15% drop-off between the first dose and the six-month dose.

Okay. In your hub, do you have visibility on week 24 prescriptions versus starting prescriptions? And is that sort of a metric that you anticipate providing or updating the street on going forward?

Yes, we don’t receive that information. We only get the initial prescriptions that come in. Once they are in our hub, we reach out to them as they approach their week 24 dose to assist with the reverification of insurance benefits and similar tasks. However, we do not have access to the week 24 prescriptions.

Our next question is from Prakhar Agrawal with Cantor Fitzgerald.

Thank you for taking my questions and congrats on the quarter. Maybe first question on the switches from Ocrevus, is this a trend that you think will continue into next year? Or is there some sort of a bolus of Ocrevus patients wanting to switch initially maybe due to tolerability issues? Any color would be appreciated?

Yes, I'll take a crack at that. Adam, you could join in. I mean, based on my interactions with healthcare providers and even with our own folks, I would say that that's something that would at least stay constant, if not grow over time. I think the more patients who go on Briumvi, the more patients will be interested in going on Briumvi. So if you're reasonably satisfied or somewhat unsatisfied but not horribly unsatisfied with your current CD20, you still may consider changing. You just want to see more utilization. So we've heard that from HCPs. I'll talk to some of the Ocrevus patients who are potentially candidates, and they'll say, 'Hey, I just want to wait a little longer to see more on-market experience, hear more stories from you and your patients and how things are going.' So I don't think it was about any sort of bolus. I do think it's about organic demand that will occur over time as more and more people see the potential benefits of switching over. Adam, any further thoughts on that?

No, I think you covered it, Mike. Thanks.

Got it. And second question on expenses. So the expenses for 3Q were at the lower end of your OpEx guidance, excluding share comp and inventory build. So any one-offs for this quarter we should be aware of or for 4Q? And as a follow-up, any initial thoughts whether you expect a significant inflection in expense growth trajectory for next year? Or is it more about steady growth?

Yes. I'll take the second part of that, and Sean, maybe hit the expense question. In terms of any inflection in expenses, no, I think the short answer there is no. We do anticipate that the burn will creep up a bit. We've talked about that we've always had a plan to modestly expand our team. We're doing more, what I refer to as support or advertising initiatives, mostly online and social. So we are definitely creeping up on the burn but nothing too dramatic at all. You've also talked about getting more aggressive on the R&D side, but again, nothing that will dramatically change or show any sort of major inflection in expenses. We've been saying that our operating burn is between $40 million and $50 million. But in fact, it's been slightly lower than that over the last 2 quarters in terms of true operating. We have room to be within the $40 million to $50 million and should be pretty unnoticeable from a financial standpoint. Sean, do you want to answer the question on the expense side?

Yes. Prakhar, would you mind just clarifying your question as early...

For the third quarter, our operating expenses were at the lower end of our guidance, which was between $40 million and $50 million. Could you provide any insights on whether there were any unusual expenses and how we should approach the fourth quarter forecast?

Yes, no one-offs in the quarter. I think Mike covered it pretty well as it relates to sort of the fourth quarter next year. So no one-offs in the quarter that really drove things being on the lower end of the range.

Okay. Got it. And last question. There's some interesting data from the BTK drugs in MS. So how do you see those drugs impacting the CD20 class? And I know you had a BTK in the pipeline. Is there any plan to take that forward into MS?

Sure. The BTKs look interesting. I'd say at this point from afar, until we get the Phase III data, which I think is possible that we may see some first Phase III data before the end of this year, we won't really have a good sense of the exact profile. So I think I'll reserve too much judgment other than, I'll say, from a market standpoint, what we do here as folks are more excited about the potential for BTKs in primary progressive MS, where glial cell activation may be or inactivation through BTK could be a really nice mechanism for slowing the progression in the absence of active disease. RMS is primarily characterized by active disease, which is well served by the CD20 class and the convenience of once every 6 months doesn't seem to fit most people's high end of convenience factor. So unless something remarkable happens in the RMS patients, I think most people are looking at it for RMS patients as another oral option, which will compete with the current oral therapies but shouldn't really compete very much with the CD20s. For primary progressive, again, on the other hand, that could be a potential competitor to CD20s if it performs at a high level. It's all data dependent. We'll see how it looks. We're certainly going to reserve judgment. We do have our own BTK. We've been hanging back. We have a lot of information in cancer patients about the profile of our drug. So we know what it looks like; we can move pretty quickly once we decide to pull the trigger. But we're going to sit back, let's see some data come out. Let's identify if there's an opportunity to fit in the space, and we'll go from there. We're all waiting on the data for the moment. Thanks, Prakhar.

Our last question is from Matt Kaplan with Ladenburg Thalmann.

Congratulations on a strong quarter. Could you provide some more detail? You mentioned that the momentum is continuing beyond the end of the third quarter. What are you observing in October? Additionally, do you anticipate any seasonal trends in the business overall?

Sure. Adam, do you want to go ahead and take that one?

Thanks, Matt. I appreciate the question. We've given guidance for the quarter, and I'm not going to go into any fourth-quarter trends at this time. The guidance will clarify things. Regarding seasonality, we noticed some patterns over the summer months, which we discussed briefly on the last call. There was a general slowdown in the MS market during this time. We experienced a slower July, followed by stronger performance in August and September. Early July showed signs of a slowdown, likely due to people taking vacations and being out of the office, which is typical, especially for infusion-based therapies. We are currently launching our product and monitoring trends to understand seasonal variations. It’s difficult to predict the future, but we know that during holidays, people tend to avoid infusions, which typically leads to slowdowns. Beyond that, we will have to see how things develop as we move forward.

Adam, that's really helpful. Mike, you mentioned this in your prepared remarks, but could you elaborate on the expected impact of the subcutaneous acupunctive in the anti-CD20 space in MS? How crucial is it for you to have a subcutaneous option?

Thanks, Matt. Based on what the developers of subcutaneous mentioned in their last teleconference, it seems clear that they intend to use subcutaneous to broaden the market for their drug. Therefore, I don't believe this poses a significant competitive threat to IV CD20. Their main aim, from my understanding, is to target the market section currently reserved for subcutaneous treatments. There is currently one company that monopolizes that area, and the new subcutaneous option will likely seek to attract patients with its advantage of a one-hour infusion every six months. Consequently, I expect it will have limited effects on the IV marketplace. Regarding the significance of having a subcutaneous option, it is not our primary focus. Our main objective is to make Briumvi the leading prescribed dynamic share IV CD20, which everyone in our company is striving towards. I don't believe a subcutaneous Ocrevus will impact the overall IV market or hinder our chances of reaching that goal. However, it could present an opportunity for us to grow and establish a new market for Briumvi. If we reach a point where we believe we can develop a competitive subcutaneous option, we see potential in that market since it is expanding. We think that general neurologists and other neurology practices, which have not significantly utilized IV CD20s in the past, are gradually getting more involved. When considering the two products available—one currently on the market and another anticipated in the future—there is an opportunity for a more tolerable and convenient product. While it's uncertain whether we will achieve that, we believe there is potential to bridge the gap.

Our last question is from Mike DiFiore with Evercore ISI.

Congrats on the great quarter. Two for me, and I may have missed this, but regarding the J-Code, now that it's fully established at most institutions, can we expect more of a gradual ramp? Or have we hit like a maximal establishment as far as the J-Code goes? And then I have a follow-up.

Adam, do you want to go ahead with that one?

Yes. I mean I think the J-Code is a positive thing. I think we're going to continue to see steady growth and continued adds. But in general, it's a good thing, provides confidence in reimbursement. It’s a positive milestone to reach, and now it has been fully loaded into payer systems, and ASP has been established. So we're in good shape there, and we would expect to see continued steady growth.

Got it. Got it. And then just to go back to the whole BTK competitiveness question. I thought your comments were interesting on how based on your research so far, physicians seem like they view BTKs as just another oral option for relapsing-remitting MS. But if the Phase III data pans out and their efficacy is really good, either equal or on par to the anti-CD20 therapies. Why wouldn't KOLs use these oral BTK options instead? I mean, any color would be helpful there.

I believe they will offer options for patients. Based on our research, patients seem to prefer a treatment option every six months. When I've discussed our BTK with clinicians and suggested it might be as effective as the CD20 treatments, their response has been that taking a daily pill or two isn't as appealing as a six-month infusion. Compliance is another issue; oral medications have historically had poor adherence rates. In real-world scenarios, even if BTKs show excellent results in clinical trials, compliance is likely to be a challenge, as it has been for all oral medications. There's some research from UT Southwestern by Dr. Darin Okuda, who collects unused oral medications for multiple sclerosis, and I believe they have reported between 25 million to 50 million unused oral meds. Compliance is a significant concern. Therefore, I don't expect BTKs to fall into the oral category unless they are significantly better than CD20 treatments. Even comparable effectiveness would likely position them as an oral option, but for patients, nothing is more convenient or reliable than a six-month IV infusion. I think that concludes our Q&A, correct, operator?

Yes. There are no further questions at this time.

Excellent. Well, we've got two minutes to the market open, so I think we should bring this call to a conclusion. I just want to thank everyone again for joining us today. We feel really great about the launch and what we've done so far. Our team is working super hard. They're sincere about really helping folks with MS. I would say the feedback we've gotten from the patients has been really heartwarming and also really provides the fuel for everyone at TG to do what we do every day. It's also important that we recognize the healthcare providers who put their trust in TG and Briumvi. We really do believe it's a best-in-class medicine and can offer real benefit to patients. As we close out the year, we'll continue to work hard to drive adoption. We need to meet the revenue targets we have set and build value in TG for our shareholders and our employees. With that, I'd like to conclude the call. Have a great day, everybody. Thank you.

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