This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk09: Greetings and welcome to the TG Therapeutics third quarter earnings update call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. 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.
spk00: 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 meetings 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 product. 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.
spk07: Thanks, Jana, and good morning, everyone, and 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 BrionVNet sales in the U.S. To say I'm 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, I'm excited for the next year and for the future of BRIOMV and TG. Just to remind everybody, BRIOMV 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 one-hour infusion twice per year following a starting dose. In clinical trials, BRIOMV 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 the same. Epitope binding and potency of that binding, as well as their ability to engage immune effector cells, are different. And we're seeing these differences begin to resonate amongst healthcare providers. Putting the whole package together, we see BrionV as a differentiated anti-CD20 with best-in-class attributes I believe Brionvy'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 Brionvy 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. EDTRMS 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 people are experiencing with the use of Briomv, as well as stories about patients that were early repleters on other anti-CD20s and are now doing well on Briomv. In addition to interacting with the healthcare providers of the conference, we had the opportunity to present additional exploratory analysis from the ultimate one and two phase three trials of BRIOMV in relapsing forms of MS, as well as the first data from our enhanced phase three B trial evaluating patients who switched from another IV anti-CD20 therapy to BRIOMV. One of the goals of this trial is to understand the safety profile of a patient switching from another IV CD20 to BrionV without the need for the 150 milligram starting dose, as well as to evaluate the speed at which the first infusion, the full 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 two-hour infusion and demonstrated 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 one-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 are 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 with our colleagues from NurexPharm, our XUS partner. As you may recall, in June, Rionvi 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 NurexPharm team and we continue to be confident in their ability to bring BRIOMV 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 BRIOMV launch, we believe BRIOMV is positioned for success in Europe. We are anxiously awaiting the BRIOMV launch which we believe is still on track for early 2024. We're also happy to share that we just received approval for BrionV in the United Kingdom. This is another exciting step forward for BrionV and for MS patients in the UK looking for a new treatment alternative. As we look forward, we are evaluating additional potential indications for BrionV 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 BrionV as a subcutaneous injection. And we expect to be able to provide an update early next year as to whether we believe we have a suitable subcu formulation that could be brought forward into the clinic. Based on the current anti-CD20 subcu landscape, we do believe there is room for a more convenient, more tolerable option. We continue to view the subcu market as distinct from the IV market and thus as a potentially attractive expansion opportunity for Briombe. 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 Briombe. 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 1st, 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 to $37 million. That should put us on target for approximately $82 to $86 million for our first partial year of sales, which is a bit ahead of the current $23 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 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 Brownbee launch. Adam?
spk02: Thank you, Mike, and good morning, everyone. I'm pleased to be with you today to share another strong quarter of execution for our BrionV launch. We continue to deliver results that exceed expectations and set the foundation for future success. The third quarter net sales for BrionV 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 scripts. And as we have mentioned in the past, we believe this figure is capturing about 80 to 90% of the total new Brienti scripts written. As Mike mentioned, with approximately 40,000 MS patients starting at CD20 each year in the US, our patient accumulation remains on target And based on scripts in 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 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. And we have made great progress across all 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 BrionV profile is best in class and will eventually be the IV therapy of choice for the relapsing MS market. BrionV's unique one-hour infusion every six 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 BrionV continues to grow and the feedback we receive is overwhelmingly positive. As we continue to progress towards our goal of making Briambi the go-to IV CD20 therapy, there is nothing more valuable than positive physician, nurse, and patient experience. We believe their growing experience will help reinforce the differentiation of Briambi 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 getting their initial experience with the drug and we are now up to approximately 500 total prescribers at more than 325 centers that have used BRIOMB. 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 BRIOMB. Depth is also increasing from early adopters, with significant increases in physicians that now have multiple patients on BRIOMB. 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 BrainV was going to be a critical success factor for this launch. And we are very pleased with the feedback we received from customers on their interactions with both our people and our patient support services to date. We are very proud of the patient help 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 Brionvi 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 breon be moving forward in addition the permanent j code has now been loaded into payer systems and our average selling price has been published all of which should help build confidence and reimbursement we have made progress uh we've also made progress in the quarter with major institutions and health systems we have secured an increased number of institutional formulary wins for beyond for breon b And importantly, we have seen our first scripts and infusions 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 pre-MV 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 BrionV. 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, growing positive experience with BrionV, and an increasing number of patients coming back for their week 24 infusions. We remain confident in the short run we'll see deepening utilization with our current base, and we'll continue to unlock more and more accounts going forward. We're also confident that in the long term, that Brionvi 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 Brionvi to those people living with MS and their families. With that, I'll now turn the call over to Sean Power, our CFO.
spk05: 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 and 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 Breonby net product sales, and $140 million in license revenue stemming from the upfront payment for our ex-U.S. commercialization agreement with NeuroX Farm. This brings our total net revenue for the nine-month year-to-date period to approximately $190 million, which includes approximately $49 million in BRIAMBI net product sales. On the back of the reported revenues, we were able to report net income in both the three- and nine-month periods. Net income for the three-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 nine-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 non-cash compensation. Over the course of the year, we have continued to invest in brandy 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 3MD 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.
spk09: Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please while we poll for questions. Thank you. Our first question is from Ed White with HC Wainwright. Please proceed with your question.
spk08: Good morning, everyone. Congratulations on a great quarter. Thanks, Ed. You're welcome. 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 sub-Q injections going forward.
spk07: Yeah, so I'll do a little bit about sub-Q. I'll let Adam take the first question. half of that question about the growing CD20 market. My impression of the infusion versus sub-Q market, the infusion market is growing, but the overall market is probably growing faster and that's probably because the sub-Q market is expanding into areas in which the IV market never penetrated. I think we're seeing sub-Q penetrating out into more general neurologists, again, into centers that probably were not already using or very limited use potentially of IV CD20s. So, you know, we think that the IV market will continue to grow. Our focus continues to be on centers that are involved in IV therapy. And, you know, I think we're leaving for the bigger players here to work on the general neurologists And as they expand their use into CD20 and into sub-Q and potentially into IV, we could then tag along and introduce BrionV in those centers. Adam, you want to talk about CD20s as a part of the overall MS treatment landscape?
spk02: Sure. Yeah, so, Ed, we estimate about 80,000 patients is about the dynamic market. Those are patients that are either initiating a new treatment for the first time, or they are switching from another therapy in a given year. And about 50% of those, or about 40,000 patients, are going on a CD20. And we believe, as Mike said, that that market is, the CD20 market is growing and expanding. But that's where we get, that's our assumption for the MS market and where CD20 is playing in that market.
spk08: Okay, thanks, Adam. And perhaps you can comment on, you mentioned the enhanced trial. I'm just wondering if we can get your thoughts on the real-world number of patients that are switching from other CD20s to BRIAM-V.
spk07: Sure. Adam, you take that one?
spk02: Yeah, so we have seen, you know, I think we've said before on this call that we did not expect a lot of patients to be switching from, you know, either IV CD20 or sub-Q CD20. That was not part of our initial estimates or thought process, but we have seen it, and we've said actually it surprised us at how much we are seeing. And I will say that a lot of the reasons that we hear from physicians as to why they are doing it is, you know, one is the one-hour short-term infusion. Of course, that's the most often, you know, referred to attribute of Brion-B that causes the switch. But we also increasingly hear about this wearing-off effect or crap gap that it's called by patients where there's an early wearing-off effect with other CD20s. And, you know, physicians are willing to give Brion-B a try to see if they can you know, get a better response with, with BrionV. So we're seeing that and, and yes, it has surprises at how much we are seeing.
spk08: Thanks, Adam. And, uh, perhaps my last question would just be, um, how much, uh, free drug through, uh, Quick Start, um, the Quick Start program did you see this quarter and, you know, what are your expectations for that, um, going forward?
spk02: Sure. Yeah, free goods remained at around 20% this quarter, very similar to last quarter. The majority of that is quick start. So, you know, 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, you know, 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 three quarters so far.
spk08: Okay, great. Thanks for taking my questions. Thanks, Ed.
spk09: Thank you. Our next question is from Roger Song with Jefferies. Please proceed with your question.
spk11: Great. Thanks and my congrats for the a good quarter a couple questions from us um yes i think you like um so um the first question may be a drill down for the patient composition you have been seeing for your um for the patient's use uh beyond these so like um how many of them are what's the breakdown between the new patient versus switch patient and the new patient because i believe you start to see some the new patient But maybe more interesting is how the recent months in 4Q, you start to see those patients.
spk07: Yeah. Adam, you want to tackle that one? So you're saying composition of new versus returning patients for their infusions.
spk02: Is that the question, Roger? Or is it how many new versus switched patients? Can you just clarify the question before I answer?
spk11: Yeah, sure. So basically we have three categories of the patient. New patient, new to the CD20, switched from other CD20, and also the new for the re-ambulation. Maybe just qualitatively how you will characterize those three categories. Thank you. Got it. Sorry, I misunderstood you.
spk07: Go ahead, Adam.
spk02: Sure. So, you know, we've seen a nice balance between all those three groups, right? So we are seeing a good percentage from new to therapy. We are seeing probably the biggest percentage from switches from non-CD20s. And we are seeing a decent amount from, as I mentioned before, decent and more than expected from existing CD20s. So relatively balanced across those three groups, probably a little bit more in the switching from non-CD20 therapy.
spk11: Got it. Thank you. And another also related to the revenue question is you report the prescription you're getting and also the revenue. From the prescription to the revenue, what what are the key factors to, you know, playing to the final net revenue? Because the prescription you're getting are maybe those patients will have some compliance rate to get to fulfill those revenue. And of course, we have this free drug and growth to net. Those are the key factors to convert from prescription to the revenue. Thank you.
spk07: Adam, you want to keep going? You're on a roll here.
spk02: Sure. Yeah, so those are the factors. I would also say, you know, it's important to understand that there is a time lag from the hub to the infusion, right? So there's time that goes on from when a patient comes into our hub and when a patient gets infusion. There's also, you mentioned compliance, but there are also, we know that there are some patients that go into the hub that actually never
spk11: get to an infusion so those are the factors in addition to the ones that you you mentioned um yeah that's all that's all i can think of is that that answer your question roger no that's great okay uh final question quick one um nice you have the the guidance for for q and the overall year for 2023 uh maybe um when you will provide the 2024 revenue guidance and how should we think about the trajectory from 2023 to 2024?
spk07: Thank you. Yeah, thanks, Roger. So, yeah, we have not given any guidance on 24 yet. We're still getting our feet wet here and trying to work on how do we produce guidance. So still early days for us in that standpoint. But our goal would be to, you know, 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, again, people don't use sources of information that we don't believe are as reliable as at least what we hope we're seeing and looking at as creating the forecast. So, yeah, so hopefully we can get something out early next year and give some guidance, get people on the right track.
spk11: Excellent. Thank you. Thank you for taking the question. Congrats again. Thanks, Roger.
spk09: Thank you. Our next question is from Mayank Manconi with B. Riley Securities. Please proceed with your question.
spk06: Good morning, team. Congrats also on strong execution and thanks for taking our questions. So maybe just continuing on Roger's sort of flow of questions on understanding prescription volume to revenue. So Adam, when you report prescription volume, for example, if you have two loading doses, is that basically one 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.
spk02: Yeah, Mike, just to be clear, the only number we're reporting is new prescriptions. 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.
spk06: Super helpful. Thank you for clarifying that. And then on the market share,
spk02: Yeah, 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.
spk06: 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.
spk02: Sure. So as I mentioned in the prepared remarks, we're seeing improvements in time to, you know, from hub to infusion, which we would expect as, you know, 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's some things that we can control, and there's 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, yeah, I think what we said was in the first quarter it was 77%. And in Q2, we said it was in line with that. And 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.
spk06: Understood. Thank you. And final question about your sort of guidance thinking. Are you able to give a little bit more color on new versus prior anti-CD20 switch? You know, how should we think about that? And then also, you know, making in the return patients, the 24-week return patients, would you just maybe comment on how to think about 4Q and into first half, given what you're seeing?
spk02: Sure. You know, I think I covered the distribution of patients. I'll give a couple things to think about with regards to revenue from week 24 infusions. So just a couple things to think about. One is that, and you mentioned this, a patient that starts therapy is going to get that initial loading dose, or 150 milligrams, followed by 450 milligrams. So that's four vials, right? The vials are 150 milligrams. Each of that's four vials. A patient coming back for week 24 is getting three vials. So that's a 25% reduction when that patient comes back and just from a revenue standpoint. The other thing that's important to think about just in terms of revenue from repeat versus new is you have to take into account that not everyone will return from week one to week 24. We still don't know what that, obviously it's still way too early for us to tell you what we think that that will be for Brionvi. But we do know that looking at other IBCD20s, that they lose about 15% of patients from drug initiation to their six-month dosing. And then that drop-off rate seems to decrease at a slower rate from there, right? With, you know, the average duration for an IBCD20 seems to be about five years in growing, but they do lose about 15% is our understanding of the data, about 15% from the first infusions to the second infusion, which is the largest drop off. And then as I mentioned, it sort of evens out from there. So those are two things to think about when you're thinking about return revenue. Hopefully that answers the question. Thank you.
spk06: Yes, very helpful. Thank you for taking our question and congrats again. Thanks, ma'am.
spk09: Thank you. Our next question is from Eric Joseph with JP Morgan. Please proceed with your question.
spk04: Thank you. Good morning. I appreciate the guidance that you guys laid out for the fourth quarter and full year. Can you talk a little bit about your internal targets, I guess, to delivering on that expectation? I'm wondering sort of if the charge is to you know, add new centers or expand share within existing centers or perhaps even lean in a little bit more to this CD20 switch opportunity that, you know, is a bit surprising. And maybe just one follow-up to that, to your last comment, Adam, on repeat or week 24 infusion expectations. That 15% drop-off, that's kind of a – a hard final number or is it just sort of a time shifted where you might sort of catch the patient but not quite exactly on a 24 week schedule?
spk02: Yeah, so let me, I guess I can take, you want me to go, Mike?
spk09: Yeah, go ahead, yep, go ahead.
spk02: Yeah, okay, yeah. So to the first part of your question, yeah, I mean, you know, our strategy is to continue to increase enrollments and continue to find, you know, new business. Adding new centers and new prescribers obviously is important. But at the same time, you know, a deepening experience seems to be, you know, something that's leading to more experience. I will say in this market that You know, as physicians are getting used to the product or they want to try it, they want to see how it goes, they want to see how reimbursement goes, and then once they have that experience and it goes well, then they will continue to add. So, you know, we're getting to the point here now where, you know, many, many physicians have had that experience now. They've gotten reimbursed, and now they're willing to expand their base. So, I think we'll continue to lean in there, but I think there's plenty of opportunity here for us to expand usage into new centers and new prescribers. We've made great progress, but there's plenty of opportunity for us to continue to grow, both in academic centers, as we've mentioned, as an area that has been slightly slower to adopt. It's increasing, but it's been slightly slower. We think there's plenty of room in academic centers to increase. And then just in general, I mean, again, we're making good progress on penetration with our top prescribers, but there's a lot of room for us to continue to grow. And then the second part of your question was the 15%. Yeah, what we're doing there is just we don't know, obviously, what our drop-off rate is going to look like, but there is published data out there with the other IVCD20 We've looked at it, and it's about a 15% that they're losing between dose one and the first dose and the week or the six-month dose.
spk04: 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?
spk02: No. Yeah, we don't get those. No, we don't necessarily get those. We get the first ones that come in. And then once they're in our hub, then what we're doing is as they come up for their week 24 dose, we're reaching out to them. There's no requirement to come back into our hub at that point, but we're reaching out to them to see what we can do to help with the, you know, the re-verification insurance benefits and so on and so forth. But know that we don't have access or visibility to the week 24 scripts.
spk04: All right, great. Thanks for taking the questions, and congrats on the quarter. Thanks, Eric.
spk09: Thanks, Eric. Thank you. Our next question is from Krakar Absarwal with Cantor Fitzgerald. Please proceed with your question.
spk01: Hi, good morning, and thanks for taking my questions, and congrats on the quarter. Maybe first question, on the switches from Okraverse, is this a trend that you think persists 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.
spk07: Yeah, 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 Briomvi, the more patients will be interested in going on Briomvi. 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 ACPs. They'll talk to some of their URCA patients who are potentially candidates, and they'll say, hey, you know, just want to wait a little longer, 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?
spk02: No, I think you covered it, Mike. Thanks.
spk01: 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 as we model out 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? Thank you.
spk07: Yeah. 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 air support or advertising initiatives, mostly online and social. So we are definitely creeping up on the burn, but nothing too dramatic at all. And we'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 and 50 million But, in fact, it's been slightly lower than that over the last two quarters of a chance of true operating. So we have room to be within the 40 to 50 and should be pretty unnoticeable from a financial standpoint. Sean, do you want to answer the question on the expense side?
spk05: Yeah, Parker, would you mind just clarifying your question as it relates to – Right.
spk01: So, yeah, for 3Q, it was at the lower end of your OPEX guidance. 40 to 50 million for the quarter. So maybe any color on whether there were any one-offs or UX and how should we think about the 4Q number?
spk05: Yeah, no one-offs in the quarter. And I think Mike covered it pretty well as it relates to sort of the fourth quarter and next year. So no one-offs in the quarter that really drove things being on the lower end of the range.
spk01: Okay, go ahead. And last question. There's some interesting data from the BTK drugs and MS. 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? Thank you.
spk07: Sure. So, yeah, the BTKs look interesting, I'd say, at this point from afar until we get the Phase III data, which I think is possible. 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 hear is folks are more excited about the potential for BTKs in primary progressive MS, where, you know, 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 six months does seem to fit most people's high end of convenience factor. So, you know, unless something is 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. So, you know, it's all data dependent. We'll see how it looks. I'm 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 to the space. And we'll go from there. So we're all waiting on the data for the moment. Thanks, Parker.
spk01: Thank you, and congrats again. Thank you.
spk09: Thank you. Our next question is from Matt Kaplan with Leidenberg Thalmann. Please proceed with your question.
spk10: Thank you, and good morning, guys, and congrats on the strong quarter. Maybe can you give us a little bit more color? You said the momentum, you're seeing the momentum continue past the end of the third quarter. Can you give us a little bit more color in terms of what you're seeing in October? And I guess maybe more broadly, do you expect to see any seasonality to the business at all?
spk07: Sure. Adam, you want to go ahead and take that one?
spk02: Sure. Yeah, thanks, Matt. I appreciate the question. You know, I think we've given guidance for the quarter and, you know, at this point that I'm not going to get into any fourth quarter trends. I think the guidance will speak for itself there. In terms of seasonality, yeah, I mean, we did see some seasonality, and we talked about this a little bit on the last call. We did see some seasonality over the summer months. In fact, when we looked at it, there is sort of a dampening across the entire MS market in the summer months. Um, you know, uh, you know, we saw, you know, a slower July followed by stronger months in August and September. Um, but we do see, you know, at least we saw in, in, uh, early July and into July, a slow, a slow down. And I think, you know, as people go on vacations, uh, people go out of the office, um, it's natural, especially for infusion based therapies. And we are seeing that, uh, again with, uh, other, uh, IVCD 20s, uh, as well. So. We did see that seasonality there. You know, we're just launching, so we're continuing to look at the trends and trying to figure out, you know, what we might see from season to season. So hard to say what the future will bring. Of course, around holidays, you know, when people don't want to get infused, that's a natural time where you'll see slowdowns. But, you know, other than that, I think it remains to be seen as we continue to move forward.
spk10: Thanks, Adam. That's really helpful. And then, Mike, I think you commented on this in terms of in your prepared remarks, but can you talk a little bit more about the anticipated impact of the sub-Q, specifically sub-Q accretives, on the anti-CD20 space in MS, and how important is it for you to have a sub-Q offering?
spk07: Sure. Thanks, Matt. So yeah, so if you take the developers of SubQ at their word in their last teleconference, they made it, I thought, pretty clear that they were going to use SubQ to expand the market for the drug. So I don't think that it's a major competitive threat to IV CD20. I think their primary goal, again, I can only base it on what I heard and how I interpreted what they said. I don't think it's going to have a major impact. I think they are going after that part of the market that has been reserved for sub-Q. One company has a monopoly in that area today and I think the new sub-Q will try to compete for the extra convenience of a one in every six month infusion. I do think that it's going to have limited impact on the IV marketplace. In terms of the importance of us having a sub-Q, again, it's not important from a primary goal for us, right? So our primary goal is to make Brionvi the number one prescribed dynamic share IV CD20. That's what everyone in the company is working toward. Um, so that's, and, and I don't think, uh, a sub Q, uh, I, sub Q Okavis is going to impact the, the overall IV market and our ability to potentially achieve that goal. Is it a potential area for us to expand and create a new market, uh, for Briamvi? Sure. And if we, you know, if we get to a point where we think we can develop a sub Q that has a profile. that is competitive with what's out there and available. We do think that, again, the SubQ market is growing. We think they're building into general neurologists and other neurology practices that have not historically used a lot of IV CD20s. So again, we do think there's a market opportunity. We think there's something there. When you look at the two products that are available, sorry, one product's available and one product that we expect will be available at some point. You know, we think there is room for a more tolerable, more convenient product opportunity. So not sure that we'll get there, but we think there's an opening. We'll just have to see if we can fit the gap.
spk10: Thanks. Thanks for the added color, Mike. And congrats again. Yep. Thank you.
spk09: Thank you. Our last question is from Mike DeFiore with Evercore ISI. Please proceed with your question.
spk03: Hi, guys. Thanks so much for taking my question, and 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 maximal establishment as far as the J code goes. And then I have a follow-up. Thank you.
spk07: Adam, you want to go ahead with that one?
spk02: Yeah. I mean, you know, I think the J code is a positive thing. You know, I think we're going to continue to see a steady growth and continued ads. But in general, it's a good thing. provides the confidence in reimbursement and 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.
spk03: 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, they seem like they view BTKs as just another oral option for relapsing-remitting MS. But if the first, if phase 3 data pans out and the efficacy is really good, either equal or on par to the anti-CD20 therapies, why wouldn't KOLs use these oral BTKs options instead? I mean, any color would be helpful there.
spk07: Yeah, I mean, look, I think they will give them as options for patients. I think what we've heard and seen in research is that patients do resonate toward an every six-month treatment option. When I've talked to clinicians about our BTKs, In particular, and I've said, you know, look, let's say it's just as good as the CD20. They say, so what? Then they have to take a pill every day or twice a day. That's not as attractive as an every six month infusion. The other thing is compliance, right? Orals have historically poor compliance. So in terms of real world experience of BTKs, even if they look phenomenal in clinical trials, compliance will be a problem. It's been for every oral drug. There's some research that's gone on down at UT Southwestern with Dr. Darren Okuda, who collects unused oral meds for MS, and I think he's collected, I'm going to make up a number, and I could be wrong, but anywhere from 25 to 50 million of unused oral meds. So it is a major issue, compliance. So again, I just don't see it. It's going to go in the oral class, I assume. Again, I could be wrong, but... based on the conversations that I've had with folks, you know, unless it's dramatically better than the CD20s, even comparable activity to CD20s, we'll just drop it into the oral bucket because for most of them there's nothing more convenient and nothing more assured than a six-month IV infusion.
spk03: Got it. Thanks so much. You got it.
spk07: I believe that was the last question. Is that correct, operator?
spk09: Yes. There are no further questions at this time.
spk07: Excellent. Well, we've got two minutes until the market opens, 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 really working super hard. They're sincere about really helping folks with MS and 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. I think it's also important that we recognize the HEPs who put their trust in TG and Briomvi. 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, 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.
spk09: This concludes today's call. You may disconnect your lines at this time. Thank you for your participation.
Disclaimer