TG Therapeutics Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 1, 2023

There are 12 speakers on the call.

Operator

Greetings, and welcome to the TG Therapeutics Second Quarter 2023 Financial Results and Business Update Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jenna Bosco.

Operator

Thank you, Ms. Bosco. You may begin.

Speaker 1

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 Q2 of 2023 Are Michael Weiss, our Chairman and Chief Executive Officer Adam Walden, our Chief Commercialization Officer and Sean Power, our Chief Financial Officer.

Speaker 1

Following our Safe Harbor statement, Mike will provide an overview of today's news as well as our recent corporate developments. 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 and 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 and 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.

Speaker 1

Factors that may affect TG Therapeutics' operations includes 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. This conference call is being recorded for audio rebroadcast on TG's website, www.tgtherapeutics.com, it will be available for the next 30 days. Now, I would like to turn the call over to Mike Weiss, our CEO.

Speaker 2

Thanks, Jenna, and good morning, everyone, and thanks for joining us on today's call. We are excited to present to you our Q2 2023 financial results, representing the 1st full quarter of Breombee sales, which like the Q1 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 Briombee.

Speaker 2

As you may recall, in June, Briombe was approved in the European Union to treat adult patients with relapsing forms of MS agreement for Breomvie with NeurexPharm, a leading European specialty pharmaceutical company focused on the treatment of central nervous system disorders or CNS disorders. We're very excited to be partnering with them to launch BRYOMV in Europe. Their neurology focused approach, broad European platform Nurex Pharma 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 Briomvi. Moreover, they have the backing of 1 of the preeminent global private equity firms, Premera.

Speaker 2

For all of these reasons, we are confident in their ability to succeed and making IMBRYOM the leading treatment for patients with RMS worldwide. From a deal perspective, the terms provide us with many important benefits We were seeking when evaluating potential ex U. S. Partnerships, including a meaningful upfront payment, which together with a near term milestone Total over $150,000,000 solidifying our balance sheet. We're also eligible to receive up to an additional $500,000,000 in milestone payments based on the achievement of certain launch and commercial objectives for a total deal value at up to approximately $650,000,000 We will also receive tiered double digit royalties on net product sales Up to 30%, which we think provides significant participation in the excess of Brionv in Europe and the rest of the world.

Speaker 2

And lastly, and very importantly, as part of the deal, we retain strategic flexibility in the event of an acquisition of TG within the next 2 years with an option to buy back all rights under the commercialization agreement. As we noted previously, Retaining this type of strategic flexibility was core to our considering an ex U. S. Transaction and Nurex Pharma and their backers appreciated that need. In exchange, Nurex Pharma will have the exclusive right to commercialize Briumbi in territories outside the United States, Canada and Mexico, which we have retained and excluding certain Asian countries, which we had previously partnered.

Speaker 2

As I said earlier, we are very excited to partner with and believe they are well positioned to successfully launch BRYONVY in Europe, which we expect to commence in Germany in the next 6 months. With that, let me touch upon the U. S. Reonvi launch efforts, which remains our primary focus. As a reminder, Reonvi received U.

Speaker 2

S. FDA approval late last year and officially launched at the end of January of this year as the first and only anti CD20 monoclonal antibody to treat patients with relapsing forms of MS that can be administered in a 1 hour infusion twice per year following the starting dose. I'm delighted to share that we experienced significant growth in revenues and prescriptions over the Q1 of this year, illustrating what we believe is strong early demand for Briumbee. Equally noteworthy is the breadth of centers and providers willing to embrace this new treatment option, demonstrating the trust and confidence they have in Briomvi And TG. Our early performance is a testament to the dedication and passion of our entire TG team We have relentlessly worked to bring BRYANVI to patients with RMS.

Speaker 2

The enthusiasm for BRYANVI continues to build And the feedback we have received continues to encourage us that the unique attributes of Briohnbee are supportive of its best in class potential, Including its glycoengineering for efficient B cell depletion, lowest reported annualized relapse rates of any CD20 monoclonal antibody in MS Phase 3 trials and a rapid and reliable 1 hour infusion. As we move into the Q3, we believe we are building a solid foundation We continue to see adoption from both major academic centers and community centers and believe that that adoption will continue to grow, especially now that we have a permanent J code in place and improving insurance coverage for Briamvie. All of these factors along with the continuing growth of the CD20 market within the overall MS treatment landscape further strengthen our confidence And the future potential of Breomby. I'll stop there as our Chief Commercialization Officer, Adam Waldman, will join us shortly More detailed launch metrics, but as you can hear, I'm extremely impressed with the progress the team has made to date and look forward to an impactful second half of twenty twenty three. Before I turn the call over to Adam, I just want to touch briefly on TG's cash position.

Speaker 2

Following the NeuroxPharm transaction, We have pro form a cash balance of approximately $285,000,000 Given our relatively stable OpEx and growing revenues, We believe we now have sufficient capital to fund our operations into the foreseeable future without the need to raise additional capital. Of course, this projection is subject to many variables, but suffice to say, as of today, we are confident with our cash position. With that, let me turn the call over to Adam Waldman, our Chief Commercialization Officer, to share some additional color on our first full quarter of launch. Adam?

Speaker 3

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 NurexPharm to launch Breomby in Europe and other markets around the world. They share our entrepreneurial mindset and urgency and will undoubtedly make Breomby a top priority.

Speaker 3

From a commercial perspective, I'm 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 bring Breonbee to patients around the world. As far as the U. S. Performance in the Q2, which as Mike mentioned is our 1st full quarter in the market, we are very pleased with the progress we're seeing with Breombee We continue to exceed our internal expectations.

Speaker 3

We have built positive momentum in the first half of the year and encouraged by the launch trajectory to date. With 2nd quarter net sales for Bremby of $16,000,000 representing over 100% growth quarter over quarter. Key highlights from the quarter include increases in patient demand growth, where we saw daily average HUB enrollments nearly double quarter over quarter With greater than 800 Briohny prescriptions coming through our hub in the Q2, bringing our launch to date total to more than 1200 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 2nd quarter.

Speaker 3

Importantly, patient and physician feedback continues to be overwhelmingly positive. In our market research, the majority of BREONV prescribers report having very experience so far with nearly all patients completing the 1 hour infusions as expected. We also continue to increase our breadth of adoption adding more than 100 plus incremental accounts and over 170 incremental prescribers, bringing the total to over 225 accounts and over 3 40 prescribers launched to date. This includes both academic and community centers across all regions of the U. S.

Speaker 3

At this point, we have seen a high percentage of our initially targeted accounts prescribed Briohnbee and we intend to broaden our focus the second half of the year. We also continue to see broad utilization across patient types, including newly diagnosed and switches that are both new to CD20 from other CD20s. Importantly, we have received we have importantly, the feedback we have received from customers on the unique profile of Breomdi Continues to be encouraging. We routinely hear that the predictability of the 1 hour infusion combined with the annualized relapse rate of less than 0.1 are important differentiators for BRYAN B. Through our market research, we have also found the vast majority of BRYAN B prescribers plan to increase their use of BRYAN B over the next 6 months.

Speaker 3

We've launched with a focused strategy to maximize our market opportunity with a nimble and experienced team who are producing early results. Neurologists' perceptions of TD rep performance is outstanding and outpaces our competition on almost all attributes. The team is actively engaging with accounts and has shown strong share of voice among customers on par with leading MF therapies. I'm extremely proud of the team's performance to date and their continued commitment to the MF community. Our growing patient demand in the form of enrollments and new patient infusions, increasing breadth of adoption by prescribers and centers and an effective J code as of July 1, we believe puts us in great position into the going into the second half of the year.

Speaker 3

I'm also very pleased to report that we now have achieved payer coverage for approximately 80% of commercial and Medicare lives, giving us coverage for BRIONV at parity with OCREVUS across the vast majority of these plans. If you recall, our corporate goal was to achieve 80% coverage by the end of the year. To accomplishing that by mid year far exceeds our expectations and is a testament to the attractiveness of Briohn B to payers and the strong efforts of our MarketAxess team. We also made solid progress in the quarter securing additional institutional formulary coverage. While many of these institutions have been slower moving than we had anticipated, we expect they will increase adoption into the second half of the year.

Speaker 3

So following a strong start in Q1, this was another very solid quarter for the Breomby launch. We continue to make progress across all fronts And believe Briohn B offers a best in class profile. We continue to see MS specialists expand their use of CD20s and anticipate this trend will continue given the therapeutic index of the drugs in this class and further believe IV therapies will continue to lead the market. We now have a permanent J code in effect, which helps on reimbursement, payer coverage is significantly ahead of schedule And major health systems have added and are continuing to add Briampi to their formularies. While we still have a lot of work to do, we are really pleased with the progress we've made in Q2.

Speaker 3

With that, I'll now turn the call over to Sean Power, our CFO.

Speaker 4

Thank you, Adam, and thanks everyone for joining us. Earlier this morning, we reported our detailed Q2 2023 financial results, which can be viewed on the Investors and 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 Ex U. S.

Speaker 4

Commercialization agreement with NeuroXPharm contains an upfront cash payment of $140,000,000 and additional near term cash milestones of approximately $12,500,000 During the Q2, we were also able to take advantage of favorable market conditions to bolster our balance sheet and raised approximately $46,000,000 in net proceeds from the utilization of our ATM facility at an average price of approximately $34 All told, we ended the 2nd quarter with approximately $145,000,000 in cash And when accounting for the $140,000,000 upfront payment, have a current pro form a cash balance of approximately 285,000,000 We believe our current capital, when coupled with modest pre owned 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 $16,000,000 in Breomby net sales in our 1st full quarter since launch, representing 100% growth over the Q1 of 2023 and $23,800,000 in cumulative net sales since launch. As for our broader financial results, Our net loss for the Q2 of 2023, excluding non cash items, was approximately $35,100,000 roughly in line with the Q1 of 2023, where we saw a net loss of $32,400,000 when excluding non cash items.

Speaker 4

Our GAAP net loss for the Q2 of 2023 was approximately $47,600,000 or $0.34 per share compared to a GAAP net loss of $40,500,000 or $0.30 per share in the Q2 of 2022. With that, I will now turn the call back over to the conference operator to begin the Q and A.

Operator

Thank you. And our first question is from Eric Joseph with JPMorgan. Please proceed with your question.

Speaker 5

Good morning. Thanks for taking the questions. Can you talk a little bit about the cadence of new prescriptions for Ranvi, 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?

Speaker 2

Yes. Thanks, Eric. Adam, you want to go ahead and tackle that?

Speaker 3

Yes. I would characterize it as steady growth. And I would See, we saw a little bit of a slowdown in 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.

Speaker 3

It takes Time for this J code to get loaded into payer systems, loaded into the institutional systems. We do believe it's Net positive, we do believe that it will lead to continued growth and will lead to more pickup of Brienbi, but it will take time as I think I've said

Speaker 2

in the

Speaker 5

past. Okay. That's helpful. Maybe just a follow-up if I could. Just when it comes to your Updated cash guidance, right, having been funded through operations for the foreseeable future.

Speaker 5

Can you just talk about what that encompasses, Anything beyond Reunve commercialization in the U. S, does it anticipate any further developments of the product perhaps for Other indications or formulations? Thanks.

Speaker 2

Yes. Thanks, Eric. So, yes, it does. I mean, We are continuing to evaluate the subcu formulation of Breonvage, so that's also included in that. We've got Our ION potentially additional clinical studies for Breyenvy, we've got some of them.

Speaker 2

We've obviously have the BTK inhibitor in our portfolio that we're evaluating. We're 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 It should continue to decline.

Speaker 5

Great. Thanks for taking the questions.

Speaker 2

Thanks, Eric.

Operator

Thank you. And our next question is from Ed White with H. C. Wainwright. Please proceed with your question.

Speaker 6

Good morning. Congratulations on the 2nd quarter sales and also on the deal announced this morning.

Speaker 2

Thanks, Ed.

Speaker 6

You're welcome, Mike. Just two questions for me. First, Mike, I just wanted to get your thoughts on The OCREVUS subcutaneous Phase 3 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 and D was up dramatically sequentially in the second I just wanted to get your thoughts on R and D expenses over the second half of the year.

Speaker 2

Great. Thanks, Ed. Yes, so OCREVUS sub Q, 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.

Speaker 2

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, That's the expression of devils 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.

Speaker 2

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, Briamvie 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, I'll call it infusion options since it's not Rapid Infuse, it's not a simple subcu similar to Kasympta, 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 Well, deter from centers getting too excited potentially about using it as a more efficient product.

Speaker 2

There's nothing more efficient than setting up an hour infusion for Multiple patients and sitting there. So we do think that Breomvie 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 Briohnvy is the gold standard today.

Speaker 2

Sean, do you want to tackle that R and D difference?

Speaker 4

Yes, sure. Good morning, Ed. Thanks for the question. The increase in R and D over the Q1 of 'twenty three relates primarily to a milestone due to LFB On the EU approval of brandy? $6,000,000

Speaker 6

Great. Thank you for taking my questions.

Speaker 2

Thanks, Ed.

Operator

Thank you. And our next question is from Roger Song with Jefferies. Please proceed with your question.

Speaker 7

Great. Thanks for taking the question. Maybe, Mike, if you can, should you give us a little bit color around The ex U. S. Deal regarding the buyback options, what's the term associated?

Speaker 7

For example, What will be the valuation for the buyback and would that be tied to the commercialization results? Thank you.

Speaker 2

Sure. Thanks for the question, Roger. So, yes, the buyback option is basically designed to provide Neurex, 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.

Speaker 2

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.

Speaker 7

Got it. Yes, that's helpful. And then in terms of the sales, we all track IQVIA and the Symphony. It seems the number In terms of dollar value, pretty on track from at least from Symphony. So we know your Mark, this through the specialty and you have your own hub.

Speaker 7

So how should we think about reconsolidation of Multiple third party database versus your Q on Q sales numbers? Thank you.

Speaker 2

Yes. So I'll take a quick crack at this and I'll let Adam speak on this as well. But We've been cautioning all along that trying to create some sort of Reconciliation between Symphony OR TUVIA 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.

Speaker 2

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 net sales for the quarter We're ahead of our expectations. We're 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.

Speaker 2

We're right on track and where we want to be. So it's obviously a little Disheartening when folks somehow change 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.

Speaker 3

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.

Speaker 3

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 IQV as a way to estimate our quarterly net sales going forward, and I hope that helps.

Speaker 7

Excellent. Thank you. That's it from us.

Speaker 2

Thanks Roger.

Operator

Thank you. And our next question is from Mayank Mamtani with B. Riley Securities. Please proceed with your question.

Speaker 8

Good morning, team. Thanks for taking my questions. Just to quickly follow-up on questions previously asked. If you could comment on inventory on average held 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 volume split between newly diagnosed versus switch patients, that would be super helpful.

Speaker 2

Adam, you want to tackle this one?

Speaker 3

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 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.

Speaker 3

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 three segments, both newly diagnosed and switches, both from CD20s and non CD20s. I

Speaker 8

Great. Thank you for that comprehensive answer. 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 EBITDA is coming down the pipe and also obviously you commented on subcu.

Speaker 8

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 Thanks for taking our questions.

Speaker 2

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.

Speaker 2

Nurex Pharma 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 Nurex Pharma 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. I think we can help them with what we've learned in the U.

Speaker 2

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 offered us everything we wanted. It's almost a hybrid way of getting Briandvi to the market as quickly as possible without cutting off our strategic options. So that was the process and like I said, it was very competitive.

Speaker 2

In terms of the BTKs or the sub 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 sub Q. So I don't think that was a major consideration in the process.

Speaker 8

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 would love to hear your most Recent thoughts on that and if that could come into the picture at some point?

Speaker 2

Yes. I mean in terms of U. S. Revenue guidance, Mark, And when we might be in a position to do that? Yes.

Speaker 2

Yes. I mean, again, 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 changed. But short of that, we feel like we're on track and we're Doing great in terms of where we're heading.

Speaker 2

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. 1, 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 Q4 of 'twenty three, which will help us start to think about what the Q1 of 'twenty four 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.

Speaker 2

We're still early on in this process. We don't have the full dynamics of prescription to the hub to total prescriptions Two total infusions, right. So because at the early phases, we're going to be it's going to take longer to go from As that compresses over the next few quarters, then once we have that piece of information also that will help us Give a better sense of how long and where those revenues are going to fall. So I just think it's so early. We're literally in our first Full quarter, I think we're quite happy.

Speaker 2

Again, we've got a lot of centers that have tried the drug. Got a lot of physicians that have tried the drug and things are going quite well and there's so much untapped potential here. Even within those centers, many of those centers have multiple providers and perhaps only 1 or 2 of those providers are already Involved in BRYALMV and we think that that should grow and there's still unfortunately and I think Adam touched on this, there's still many centers Where the formulary internal formulary process just takes much longer than we anticipated. So there's A lot of major centers that are still yet to be able to prescribe Brownvie. So we think that's a nice area That we'll see some nice growth going forward.

Speaker 2

So again, I think we're on the right trajectory that we expected. And when we get to the end of the year, as we get into next year, I think we'll be in a better position to give some guidance.

Speaker 8

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

Operator

And our next question is from Michael DiFiore with Evercore. Please proceed with your question.

Speaker 9

Hi, guys. Thanks so much for taking my Congrats on all the progress. A few from me. Number 1, like how should we think about uptake and adoption in the EU, just considering Back end loaded nature of the deal. I have two follow ups.

Speaker 2

Yes. So, Adam, you want to talk about uptake and adoption in the year?

Speaker 3

Yes. Michael, thanks for the question. As you know, Europe is a country by country approach, Each country having a slightly different reimbursement timeline. 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.

Speaker 3

Hopefully that answers the question. Thanks.

Speaker 9

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 infusion share capacity. Could this 30% figure increase as it gets harder and harder for patients to schedule share

Speaker 2

Yes. I mean, I think that plays Into the Briomvi value proposition. So again, if you're an infuser, you want to optimize your infusion suite. And so And I would assume instead of sending out patients for sub Q, you'd prefer to Keep them in house. Again, there's a lot of good reasons.

Speaker 2

I hear it all the time. The doctors want to know the patient's 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 BREAMVI 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.

Speaker 2

I mean, I assume there will be some uptick in subcu As a result, but I also think there'll be a nice uptick in Brianca 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 BREUMVI In that setting, if that's what you're trying to achieve in getting more patients in, then we think that's a nice tailwind for us.

Speaker 9

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

Speaker 3

I don't know. It was largely yes, it was largely in line with Q1.

Speaker 4

Thank you.

Operator

Thank you. Our next question is from pakar agrawal with Cantor Fitzgerald. Please proceed with your question.

Speaker 10

Hi, good morning and thanks for taking my questions. So I had

Speaker 11

a question on the quarter. The 800 prescriptions in the Briomv Hub that you reported in 2Q, so there seems to be a lag between prescriptions and the revenue So could you help us bridge that gap? What is causing the lag? Is it the percentage paid Rx's? Gross to net seems to be stable.

Speaker 11

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.

Speaker 2

Adam, you want to take a crack?

Speaker 3

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.

Speaker 3

We continue to look at our Timeframe and it's in that range and hopefully will compress over time as we continue to get more insurance coverage, I don't think that J COOP will necessarily affect that. It'll 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.

Speaker 11

Okay. Thanks, Adam. And secondly, the subcutaneous OCREVUS safety tolerability looks good. Do you have any plans for subcutaneous formulation for pre

Speaker 2

Yes. So we've said on multiple calls that we are evaluating the physical, Biological properties of our material around a subcu and just to understand what is feasible with Breombe in a subcu. So that is that work is ongoing as we speak, and we're going to make a determination at some point toward the end of the year, early next year of 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 It looks good.

Speaker 2

I think we haven't seen that data and we're looking forward to seeing it. I assume we will see that at Ectorum. So I think the jury is still out What's the exact profile of the Ocrys subcu and what that will look like and what the patient experience will be? Like I said, anecdotally, we do hear There is 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?

Speaker 2

Thank you. Thank

Operator

you. Thank you. Our next question is from Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

Speaker 10

Hey, guys. Good morning and

Speaker 4

thanks for

Speaker 10

taking the question.

Speaker 2

Just wanted to follow-up a little bit

Speaker 10

on the ex U. S. Deal. Can you give us a little bit more color on The $500,000,000 tough and milestones, what would trigger those and how those could roll out?

Speaker 2

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

Speaker 4

Yes, sure. Good morning, Matt. So as you may They're mostly tied to sales milestones in the U. S. Escalating on a tiered basis.

Speaker 4

Beyond that, not providing a whole lot more detail at this point.

Speaker 8

Okay.

Speaker 10

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

Speaker 4

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

Speaker 10

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

Speaker 3

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 in and out of the center.

Speaker 3

Infusion centers have been very impressed with the overall tolerability And the efficiency that Breombe provides. Doctors have given us great feedback in terms The efficacy of the drug and the 1 hour infusion is being attractive, as I mentioned in my remarks. So I would say across the board, we're getting very positive and consistent feedback.

Speaker 10

Great. Well, thanks for taking the questions and congrats on the ex U. S. Deal.

Speaker 2

Thanks, Matt. Appreciate it.

Operator

Thank you. 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.

Speaker 2

Great. Thank you. 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 Breomvie has set a Hi, Var 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 at the company feels the same way.

Speaker 2

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.

Operator

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

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Earnings Conference Call
TG Therapeutics Q2 2023
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