TG Therapeutics Stock 300% Rally Has Legs Yet

Key Points

• Shares are loving the FDA-related momentum. 
• Cantor Fitzgerald sees another 30% upside from here.
• Tight risk management is needed as volatility is present.  

It’s been a while since the Marketbeat team flagged a hot stock that had already logged a 300% rally but looked like it was going to go higher. But the New York-headquartered TG Therapeutics Inc NASDAQ: TGTX is worth every word. Their shares have tacked on as much as 275% since the middle of November and there are several signs to suggest that momentum is only continuing to build. 
To get a clear idea of what the stock might do in the coming months, it’s necessary to understand the catalysts and drivers that have sent it so high. Buckle up.

Like most small-cap and mid-cap biotechs, TG Therapeutics’ stock chart in recent years is mostly defined by updates, be they positive or negative, in relation to their FDA trials and the madness of crowds.

Their shares got swept up in the COVID rally and ran from $5 to $50, only to come back to $5 again last summer. But having started to fade into obscurity by the fall as the stock got used to being in a downtrend, one update changed all that. 

FDA Updates

News that the company had begun labeling discussions with the FDA ahead of a potential U.S. approval for its multiple sclerosis (MS) therapy ublituximab sent the shorts scrambling to cover and the bulls to buy. The stock jumped 90% over the next three days, and while the surge petered out, shares consolidated around most of the gains. Then came the company’s PDUFA date at the end of December, arguably the most watched event for many small biotechs.

It’s the date the FDA has shared in advance for when they’re aiming to give a final decision on a company’s new drug application. The positive signs from November held through, approval was confirmed, and the stock popped again. This time it jumped 50% in the following three days, and it hasn’t looked back since. 

That rally is still going, with TG Therapeutics’ stock notching fresh highs only yesterday and tagging a 292% return from the first week of November. The shares saw some selling in yesterday’s afternoon session before rallying into the close. This kind of volatility is almost certain to remain, with the stock’s RSI well above 70, indicating extremely overbought conditions. But this makes TG Therapeutics a compelling stock to add to your watchlist. 

As longer-term investors take profits and the stock seesaws, those keen to get involved in early-stage biotech on the FDA’s right side should see some interesting buying opportunities opening up. And more eyes than ever before are watching the stock now. 

Getting Involved Now

Last month, one of the company directors disclosed fresh insider purchases to increase his stake, a move Wall Street loves to see that gives investors confidence. And only yesterday, the team over at Cantor Fitzgerald was out with a bullish review of the stock’s prospects. Analyst Prakhar Agrawal and his team expect a “strong” commercial rollout for the company’s new MS therapy, now being marketed as Briumvi. 

As part of the update, Agrawal reiterated his Overweight rating and upped his price target on TG Therapeutics shares from the $18 they’re trading at this week to $24. This points to further upside in the region of 30% yet to be realized, which should be more than enough to get even the more risk-averse investor interested. 

Like most biotechs out there, investors have to be careful. Those stocks have a bad habit of rallying into, often through, the news but then fading from the headlines and losing momentum. Tight risk management is critical, which is why we wouldn’t advise to jump in head first. Let’s see how shares trade through this week and if some interesting buying opportunities open up to make that targeted 30% upside even better.