TG Therapeutics, Inc.

Greetings. Welcome to TG Therapeutics' second quarter 2024 earnings call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If you'd like to ask a question, please press star 1 from your telephone keypad, and a 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 that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. If anyone today should require operator assistance, please press star zero from your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to Jenna Bosco. Jenna, you may now begin.

Thank you. Welcome, everyone, and thanks for joining us this morning. I'm Jenna Bosco, and with me today to discuss the second quarter 2024 financial results are Michael Weiss, our Chairman and Chief Executive Officer, Adam Waldman, our Chief Commercialization Officer, and Sean Power, our Chief Financial Officer. Following our safe harbor statement, Mike will provide an overview of our recent corporate developments, Adam will share an update on our commercialization efforts, and Sean will give an overview of our financial results before turning the call over to the operator to begin the Q&A session. Before we begin, I'd like to remind everyone that we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about our anticipated future operating and financial performance, including sales performance, projected regulatory or clinical milestones, revenue guidance, 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. With that, I'd like to turn the call over to Mike Weiss, our CEO.

Thank you, Jenna, and good morning, everyone, and thank you for joining us for our quarterly earnings call. I'm pleased to report that we had another quarter of outperformance across all aspects of our business, marked by the continued successful launch of our flagship drug, Briumvi, which was approved about 18 months ago for patients with relapsing forms of multiple sclerosis. The market response has been overwhelmingly positive, and our sales performance has exceeded our initial projections. Let me start by highlighting some key achievements for the second quarter of 2024. First, on the commercial front, I'm pleased to share that we achieved 72.6 million in BrionB net sales in the United States, exceeding our target of approximately 65 million, leading us to raise our full year guidance to approximately 290 million to 300 million. That's up from 270 to 290 million from last quarter, which was already raised from our preliminary guidance of $220 to $260 million provided at the beginning of the year. Our commercial team has done an outstanding job in executing our launch strategy, resulting in strong initial adoption. This early success reinforces our confidence in Briombe's long-term potential to reach our goal of becoming the leading treatment for relapsing forms of multiple sclerosis on a dynamic market share basis. On the R&D front, we also had a very productive quarter. While commercialization of Briombe remains our core focus, we continue to explore ways to improve upon the delivery of BrionV, explore potentially new indications for BrionV, and advance our newly acquired allogeneic off-the-shelf CD19 CART-T for autoimmune diseases. At the same time, we continue to evaluate opportunities to expand our pipeline. Specifically, some R&D highlights for the quarter included our enhanced study, which is evaluating ways to streamline the switch to BrionV from other anti-CD20s continued its robust enrollment. We were also able to present preliminary data from the study at the ACTRMS conference, showing that patients can safely be transitioned from other anti-CD20s to BrionV without the need for the first dose of 150 milligrams over four hours in those patients that enter the study with low B-cell counts. We look forward to sharing additional data from the enhanced trial in the coming months. Another highlight was that we treated our first MS patients with subcutaneous BrionV and a newly launched phase one study to assess bioequivalence of sub-Q versus IV BrionV. This was a high priority for the team and I'm proud of their efforts to get this study initiated quickly. As mentioned in the past, we believe the sub-Q and IV CD20 markets are distinct and believe this could represent a significant additional opportunity for the BrionV franchise. We believe we'll be in a position to share data from this study early next year, and we are still targeting starting a pivotal trial for subcutaneous BrionV by mid-2025. And finally, related to another high-priority R&D program, we were excited to report that the US FDA has cleared our Investigational New Drug Application, or IMD, for Azercel, an off-the-shelf allogeneic CD19 CAR T-cell therapy for the treatment of autoimmune diseases. As a reminder, earlier this year, we entered into a partnership with Precision Biosciences to acquire a worldwide license to age yourself for indications outside of cancer. With an active IND now in hand, we believe we are on track to launch a phase one in autoimmune diseases, initially in patients with progressive MS by the end of this year. Next, I'd like to highlight our financial position and discuss the share repurchase program we announced this morning. The strong launch of Breonvi has positively impacted our financial results, including leading to our first operationally cash flow positive quarter. Sean Power, our CFO, will join shortly to discuss our financial performance in more detail. But I wanted to touch on our newly established five-year $250 million credit facility with healthcare royalty and blew out capital. The proceeds will first be used to repay essentially refinance our approximately $107 million of indebtedness and accrued interest owed to Hercules Capital Partners, which was set to mature in tranches from mid-2025 to January of 2026. Another $100 million of proceeds has been allocated to fund up to a $100 million share repurchase plan, which was recently authorized by our Board of Directors. The remainder will simply be added to working capital providing us with additional operational flexibility. We've been talking about the potential for a share buyback publicly, and we're excited to establish this credit facility, which allows us to accelerate our ability to repurchase shares. We see TG as a growth story, setting up for possible significant cash flows in the future, and we're committed to sharing that value with our shareholders. This repurchase program is just the first step in that process. Importantly, this new credit facility enables us to repurchase shares without utilizing our current cash, which is dedicated to continuing to build out our commercial infrastructure and footprint, growing our marketing efforts, including growing our direct to patient initiatives, and finally investing in our R&D programs. In closing, I want to thank the entire TG team for their dedication and hard work in making this quarter a success. We're excited about the positive impact we're making in patients' lives and the value we're creating for our shareholders. With that, I'll hand the call over to Adam Wallman, our Chief Commercialization Officer, to walk you through our commercial performance in more detail. Adam, go ahead, please.

Thank you, Mike, and good morning, everyone. I'm thrilled to share our commercial progress for the second quarter of 2024. Building on the momentum from the first quarter, we have once again delivered strong performance across all key metrics, continuing our commitment to bringing BRIAMBI to patients with relapsing forms of MS. As Mike mentioned, we achieved second quarter net sales of $72.6 million, exceeding our target of $65 million, and reflecting approximately 45% growth quarter over quarter, and 350% growth from the same quarter last year. We saw strong growth in patient enrollments, with over 1,400 new patient scripts processed through the TG Hub, marking a 12% increase from the previous quarter, We have now had approximately 5,850 new patient prescriptions written to our hub across 525 centers from over 950 prescribers launched to date. We are very pleased with the rate of adoption, but also remember that since not all new prescriptions go to our TG hub, these numbers underestimate the total new patient scripts we're rambling. For the second quarter, we estimate that the hub captured only about 80 to 85% of total new scripts. And as more and more academic centers and independent infusion centers adopt BrionV, this hub capture rate could go down further as these types of centers are less likely to utilize our TG hub services. BrionV continues to gain share in a large and rapidly growing anti-CD20 market in the RMS. Strong share growth and patient adherence is leading to significant revenue growth for the CD20 class overall, year over year. The class now represents an approximately $2 billion quarterly revenue opportunity in the U.S., with IV therapies capturing approximately 70% of that. We would expect that the class will continue to grow going forward, and BrionV will continue to grow within it. We have seen our prescriber base continue to expand, adding approximately 150 new prescribers and over 70 new accounts in quarter two. Many of these new prescribers are coming from leading academic centers, further establishing Breon B's presence in the MS treatment landscape. Some have also started to come from the VA. As previously announced, we successfully expanded our market reach by securing a contract with the Department of Veteran Affairs, making Breon B the preferred anti-CD20 treatment for relapsing forms of MS among veterans. This strategic partnership, which went into effect on June 17th, not only broadens our patient base, but also reinforces Breon B's value propositions. We believe this partnership creates access not only to a new group of patients, but also treating physicians that in many cases have dual appointments at the VA and in academia. Overall, we continue to see strong new patient accumulations, reflecting our effective commercial strategy and operational excellence. We believe our strategic investments in field force expansion and patient marketing initiatives are yielding high returns, contributing to our overall growth trajectory. Patient access to Briambi remains our top priority. Our comprehensive patient support programs have been instrumental in assisting patients with accessing Briambi and working to ensure they receive the treatment they need. We have received very positive feedback from both patients and healthcare providers about the support and resources available to get patients started on therapy, and our patient adherence at week 24 remains strong. The diversity of patient types being treated with Briambi remains consistent. We continue to see a balanced mix of patients who are treatment naive, those switching from non-CD20 therapies, and those switching from other CD20 therapies. This broad adoption is a testament to Briambi's compelling clinical profile and its differentiation in the marketplace. Looking ahead, we are optimistic about the continued growth and potential of Briambi. Based on current trends in both new patient accumulations and persistence, we are raising our full year guidance, which was 270 to 290 million, to $290 and $300 million for the year. We expect the quarters to continue to build and have considered the seasonality we saw last year in Q3. We therefore would expect more modest growth from Q2 to Q3, with stronger growth from Q3 to Q4. In conclusion, I want to extend my gratitude to our dedicated team for the relentless effort in driving the success of Briandu. Their hard work and commitment has been crucial in achieving these remarkable results. I also want to thank the healthcare providers and patients for their trust in TG Therapeutics. Together, we're making significant strides in improving outcomes for individuals living with MS. We're excited about the future and remain focused on our mission to bring BreonV to more patients, helping them live better lives. Thank you. And with that, I'll hand the call over to Sean Power, our CFO. Sean?

Thank you, Adam, and thanks, everyone, for joining us. Earlier this morning, we reported our detailed second quarter 2024 financial results, which can be viewed on the Investors and Media section of our website. Before I get into the results for the quarter, I'd like to begin by briefly discussing an accounting matter we described in an 8-K filed earlier this morning. During our second quarter review, we identified an error which was deemed to be immaterial related to the expense recognition of a single restricted stock grant from 2021. This error was isolated to 2021 and 2022 and does not impact results of operations in any other or subsequent period. Although the error was determined to be immaterial to all relevant financial statements, it was determined that this represented material weakness in the company's internal control over financial reporting related to controls around non-routine stock awards. which will require some disclosure in our 10Q this quarter and an amendment to our 2023 10K that will be filed later this week. We're already in the process of updating our internal controls relative to these equity grants and expect the material weakness will be fully remediated before December 31st of this year. Now let's turn to the financial results for the quarter. We are pleased to report that we were both cash flow positive and generated net income in the second quarter of 24. We ended the quarter with approximately $217 million in cash, cash equivalents, and investment securities, up $7 million from Q1, and flat from year end. This was, of course, made possible by the strong quarter of Briambi, with $72.6 million of U.S. Briambi net product revenue. which is up more than 350% over the comparable quarter in 23. Our OpEx excluding non-cash items during the second quarter came in below guided ranges at approximately $47 million, roughly in line with Q1 24 when excluding the one-time charges seen during Q1 2024. Our OpEx for the first six months of 2024 is approximately $105 million we're averaging just over $50 million per quarter, again, below our guided range. As discussed briefly earlier, our GAAP net income for the three months ended was $6.9 million, or 4 cents per diluted share. When excluding non-cash items, net income for the period was approximately $16.4 million. And finally, I'll close by touching briefly on today's announcement of a new $250 million debt facility with healthcare royalty and Blue Owl Capital. We were pleased to be able to refinance our existing debt to a facility with a longer-term duration and attractive financial terms. As Mike discussed, this will provide us with sufficient resources to execute on our share repurchase program, also announced today, as well as continue to invest in the BrionV commercial opportunity. With that, I will now turn the call back over to the conference operator to begin the Q&A.

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, you may press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Thank you. And our first question comes from the line of Roger Song with Jefferies. Pleased to see you with your questions.

Great. Congrats for the strong quarter, and thank you for taking our questions. Maybe the first one, like you didn't comment on the current dynamic market share. As we recall, you have been saying you're getting around 10%. Just curious about this quarter and then also what's the near-term goal for the dynamic market share and the thing you want to become the number one dynamic market share in the future. Thank you.

Yeah, thanks, Roger. Yeah, of course, our goal is to get to that number one position. We're working hard at it. You've got to have goals, so we're going to keep driving at it. Yeah, I mean, look, I don't know, with 1,400 out of 10,000, probably we can Remember, we're using approximate numbers, but we assume, again, about 10,000 patients will start a new therapy, so that's the dynamic share per quarter. If we had 1,400 enrollments into the hub, which, as Adam said, probably represents only about 80-85% of the total prescriptions, we are tracking sort of into that 15-ish percent range, give or take, but Again, it's not fully baked. But, yeah, I think we're doing great. The team is out there hustling. They're working hard. The drug is performing well. And we're going to continue to push toward our goal.

Excellent. Thank you. And then in terms of the LOBD19 CAR, your first indication is progressive MS. Just biologically, can you comment on how you think about the CB19 versus CB20 for this particular population of the MS. And then also, when you start the trial, what are the targeted population for the progressive MS if you are targeting certain severity or any baseline characteristics you want to do the initial study? Thank you.

Yeah, thanks, Roger. Yeah, I mean, CD20 versus CD19, I don't know that there's a huge difference in MS specifically. I mean, CD19 has a broader coverage in pre-B cells and short-lived plasma cells, which has some advantages in some areas, potentially some disadvantages in others, and that might be disadvantageous in MS if you were constantly treating these patients. Given that we think this will be a one-time treatment, or if it's not one time, it'll be separated by a significant amount of time, I think the CD19 is quite a good approach for MS. And again, the goal for this treatment would be to have a very deep and robust B cell depletion across tissues within the systemic system but of course in the central that would create potentially a best in class treatment and then you release and you hopefully let the B cells come back hopefully they're reset to be non immunogenic B cells and that would be ideal and of course you'd be able to then leave long gaps potentially use it as a one time treatment or very long gaps between treatments so I think, generally speaking, CD20, probably, if you're going to be repeating treatments, probably CD20 a little bit better for MS. If you're looking at something that has a one-time treatment, CD19 may have some advantages in that case. You had a second part to that question, Roger, which, of course, I lost myself in the answer. Is there more to that question?

Yeah, just curious about the progressive MS and the specific baseline population or baseline patient characteristics you want to target in your initial clinical trial?

Not really, no. I mean, I think we're open to all progressive patients. So that is definitely the unmet medical need in MS right now. So yeah, we're excited to get into those patients. So it could be primary progressive, it could be secondary progressive, it could be secondary progressive that are inactive, secondary progressive that are active. We're sort of agnostic to that group. We just want to make sure we're hitting progressive patients and hopefully, like I said, deep tissue penetration and CNS penetration would be great for that disease.

Got it. Thank you. Thanks a lot. Thanks, Roger.

Thank you. The next question is from the line of Matt Kaplan with Landenberg Fallon. Please proceed with your question.

Hey, good morning, guys, and congrats on the quarterly results, strong results. I guess a few questions. First, on the pipeline, you mentioned that you started the sub-Q program. Can you give us a little bit more sense in terms of potential profile of your sub-Q from a from a frequency and delivery point of view?

Yeah, so there is one sub-Q on the market. It's currently dosed once per month in a, I'd say, relatively elegant auto-injector format. But it still needs to be taken once a month, and you still have to deal with getting that drug to the patient once a month. So there's definitely logistical issues that can arise. Uh, the other, uh, that is not yet in the market, but potentially could be here, uh, in September is a, uh, is a sub two, uh, version of Okravis. Uh, that one, you know, is a bit more clunky. Uh, you need to either have it pushed over 10 to 15 minutes by a, by a healthcare provider or, uh, used with a pump format where they attach a pump, but it, uh, It will cause some bruising, some swelling, some reactions. So I think that's a bit more clunky than the elegance of a sub-Q auto-injector. Our goal is to find ourselves somewhere in the middle, something that's less frequent than, and the sub-Q Ocrevus will be every six months if it's approved. Uh, the, the goal is to have something that's less frequently than once a month and more elegant than, uh, you know, large volume, uh, sub queue that, uh, that I've seen with the Okra. So, uh, yeah, I mean, look, we think the elegance of sub queue auto injectors is the gold standard. Uh, and we'd like to get ourselves there and we'd just like it to be less frequently than once a month.

Okay. Okay. That's, that's helpful. Thank you. And then, um, In your prepared remarks, you mentioned along with your guidance, increased guidance, some seasonality to expect between second quarter to third quarter versus third to fourth. Can you talk a little bit about that, how we should think about that? And then also congrats on your first quarter in terms of achieving profitability from your underlying business. Is that something we should expect kind of going forward?

Sure. Adam, you want to take that seasonality question, and then we'll come back to the profitability question.

Sure. Yeah, thanks, Matt. Historically, we have seen the MS market does tend to slow down a touch in the summer months. You have both patients and physicians taking vacations. So you have seen that historically, and we saw it last year, so we would expect to see it this year. You also have the added... with this year being a little bit unique in that the ECTRIMS conference has moved into quarter three versus quarter four last year. And we did see some softening around ECTRIMS last year with a lot of physicians from the U.S. attending that conference. So those two things we think will contribute to the guidance that we provided. But overall, we're very confident, obviously, in the long term. We've raised our full year guidance. And that's just more of a seasonality that you mentioned.

Thanks, Adam. And then on the profitability side, I'll take a crack, and Sean's here to help and correct me if I get this wrong. But I think on an operating basis, we should maintain profitability going forward. Again, those are impacted on a gap basis. That will be impacted or net income will be impacted by, things like non-cash comp. Cash flow profitability will be impacted by things like inventory build. So we're in that sort of fringe area where some of those things will affect, but I assume as we get further into the year, we'll get closer and closer to both, regardless of whether we're buying inventory or regardless of the non-cash stuff. we'll maintain both positive net income and cash flow. But certainly on an operations basis, as you can see, the expenses, as Sean mentioned, are even lower than expected. We're trying to spend it. We've added to our team. We're increasing our marketing budget. We're continuing to do that. We will continue to do that. But certainly we don't expect that the expenses could outpace the revenue growth at this point. Sean, anything to add on top of that?

Nope, I think you nailed it, Mike. I think that's perfect.

Thanks, Mike. Thanks, Matt.

Our next questions come from the line of Michael DeFior with Evercore ISI. Please proceed with your questions.

Hi, guys. Thanks so much for taking my question, and congrats on such a strong quarter. A few questions from me. Number one, how do you foresee the initial launch of SubQ Okravis, Inc., impacting account penetration for the balance of the year? I mean, You've obviously increased guidance, but I was wondering if you're hearing anything from the field that may have helped boost your outlook in this regard. And I have two follow-ups. Thanks.

Sure. Adam, you want to go ahead and talk a little about what we're expecting from the launch of SubQ Ocrubus?

Sure. Thanks, Mike, for the questions. You know, our teams are obviously, will be prepped and ready for the launch of the product extension for Oculus. But honestly, we haven't detected a lot of enthusiasm for this product with our customer base. We've heard concerns around, you know, complex administration, nurse training required, potential side effect profiles. So, you know, our interpretation today is we don't think it will have a significant impact in the U.S. market. But that's, you know, that's today we sit here, and that's our view from talking to many, many customers.

That's helpful. Second question is just any update on growth to net dynamics in Q2 and the outlook for the balance of the year, as well as if you could comment on any inventory dynamics in Q2.

Sorry, Mike, could you repeat the first part of that question?

Yeah, I was wondering if you could just clarify any gross-to-net dynamics in Q2 and the outlook on gross-to-net for the balance of the year, as well as comment on whether there was any inventory dynamics to be noted into Q. Yeah, gross-to-net was

similar to previous quarters and no material change in inventory, nothing to note, nothing that was unexpected.

Got it. My final question to any update on the EU launch, I mean, any feedback from large academic centers there? And have you noticed any notable differences compared to the initial rollout of Briambi in the US?

Yeah, Mike, you want to take that one?

Adam, you're on a roll. Keep going. Okay.

So as you know, Mike, they launched it in Germany. We're still preparing for the launch, waiting for the reimbursement in several other countries. But the feedback has been very positive. They are gaining momentum both in the academic centers but also, interestingly, in the community centers as well. who they're getting feedback that the one-hour infusion is particularly attractive in those centers from an efficiency standpoint. So overall, it's been going well. As far as the comparison to the U.S. launch, I think similar in that there is good information you know, uptake and, you know, enthusiasm for the product profile. And we'll see how they continue to go there. And we're looking forward to seeing, you know, more countries launching later this year or early next year.

Very helpful. Thank you.

Thanks, Michael. Our next questions are from the line of Eric Joseph with J.B. Morgan. Pleased to see you with your questions.

Good morning. Congrats on the great quarter and thanks for taking the questions. I guess just first on the updated guidance, I guess what is the anticipated terms pulled through via the VA contract? I guess any sort of range you could kind of put around that. And then I'm also curious to know what kind of incremental visibility you had this quarter on inter-CD20 switching to BrionV, how much switches contributed to BrionV uptake and also where you think that might go with additional data from the enhanced trial. And then secondly, Mike, you kind of commented on sort of additional expenditure to support the launch here. I guess, how should we be thinking about sort of the build in SG&A of the next couple of quarters, and I guess ultimately looking long-term, I guess how should we be thinking about sort of the commercial margin, the profitability of the franchise? Thanks.

Great. Thanks for the three-part question, Eric. I think, Adam, if you want, maybe the first one was updated guidance, how it may be impacted by the VA. Do you want to start there?

Yeah. So the guidance includes the VA, but I would say that the VA, as I think we mentioned on the call last time, would not be a material impact in 2024. We're in the early stages of the launch at the VA. It's been about a month since the contract went into place. At this point, I would say 10% to 15% perhaps of the VA centers of excellence have utilized EMD. The contract is specifically for new patients. And so I don't expect, although our guidance includes it, it's not a major driver of the overall guidance. And then your second question was on switches from CD20. Switches from CD20 remain permanent. consistent quarter to quarter. We've seen a good amount of our overall patient population being switched from CD20s. And yeah, we would expect with more data and the enhanced trial and making it easier to switch patients, we know that there are many patients that complain of crap gap and other issues around tolerability of other CD20s. and we believe it's an attractive market and it's been nice to see it stay consistent since launch in terms of percentage of patients switching over from CB20. And then I don't remember the third part.

Yeah, I've got that one. That one was directed at me, although you could help and so could Sean probably. So the question was on the launch build in SG&A and then sort of long-term where we see that going. Yeah, I mean, look, we had a very focused strategy when we started the launch and we sized the team for that strategy. And we always said that we will grow the team and basically reinvest the revenues to build out the team. The SG&A and total OpEx for this year of $250 million baked in a growth of the team. Over the course of the year, we've I think since the launch, certainly in the core field teams themselves versus our management level positions, we've close to doubled, I think, our field force or at least grown more than 50% the field force. And that continues to grow. I mean, I get requests for new hires in the field nearly every day, certainly once or twice a week. So the team is growing, but that's, again, all baked into that OpEx environment Again, it's about 250. I'm not going to say exact. Obviously, we've been running a little bit below for the year so far, but I think we're going to still stick with approximately 250 in OpEx for the year. As we move into next year, I'm confident the OpEx that we target will be higher, I think incrementally higher. We're certainly, like I said, the team will continue to grow. Our marketing budget Again, we were very specific early on that we wanted to focus on clinician awareness, HCP awareness, and that was really a field-based endeavor. We're going to obviously continue to do that, and as we said, we're growing that. But phase two of the launch, we've talked about this a bit, and we've already increased, again, which is already in this year's budget, our online direct-to-patient marketing efforts. And we're going to continue to grow that budget as we get into next year. Long term, again, I can see we'll continue to incrementally. At some point, the team is probably fully maxed out. So that will cap out. And then the marketing budget will be the marketing budget that we think is appropriate. But like I said, my hope and expectation is that our incremental spend in OpEx and SG&A over time is is measured and incremental, whereas the revenue should be relatively gapping up every year and we're having a really nice accumulation effect as we continue hopefully to build our market share and grow that out. The new starts will continue to build as well. So all of that on top of itself is why I quoted earlier that I could potentially see significant cash flows as we move forward. Um, but yeah, I mean, I think long-term the margins should be solid. I mean, I've, I've looked at some of the best operating margins in biotech, uh, out there. I've seen, I think Vertex Regeneron have done an amazing job in, in, in keeping their OpEx high. Uh, there's a few other companies out there. I think, you know, we could be, you know, in a leading position in terms of OpEx to, to revenue. So OpEx margins.

Right. Great. Thanks for taking all the questions, and again, congrats on the quarter. Thanks, Eric. Appreciate it.

Our next question is from the line of Mayak Montani with B. Reilly Securities. Let's just see if there are questions.

Good morning, team. Congrats on a solid quarter, and thanks for taking our questions. So quick two-part on commercial metrics. Adam, if you could update on the persistence rate you're seeing, and if you guys can qualitatively talk to an year-end market share target, be it within new-to-class or intra-class sort of switch segments, and then I have a quick follow-up.

Yeah, thanks, Mac. The persistence rate, yeah, the persistence rate at week 24 continues to be solid. And as expected, you know, what we've said before is we expected it to be around, you know, 80, high 80s. And that's what we saw, at least what Okravit saw, and we're late in that ballpark. So the rain is very strong there. In terms of market share, I'm not going to give a specific market share that we think we're going to hit by the end of the year. I just think to reiterate what Mike has said and what we said in the call, we're going to continue to add more and more prescribers and we're going to continue to grow in a growing market and that's what we're focused on every day and we continue to see that we're getting traction and we'll continue to focus on I'm doing that, and like I said, our goal is to be the number one prescribed MS therapy in terms of dynamic sharing.

Got it. Thank you. And then at ECTRIMS, I see you're presenting an update to enhance study results. Maybe just talk to what's new and incremental there and what sort of the healthcare provider feedback to the data you've generated to date And also I noticed there's the deliberative phase three late breaker Gemini and Hercules program data coming also at Ectrin. Would love to hear your latest thoughts on how you're thinking, you know, the BTK drug class impact on your sort of long range plan, you know, recognizing the results have been relatively mixed recently. Thanks again for taking my question.

Yeah, sure. Thanks for the questions. So obviously, we can't talk anything about eCTRIM. The notifications and apps have not been released yet, so can't say anything about that. But I can answer your second part of your question about HCP feedback to the results we have presented previously. And I think the feedback has been extremely positive. I think people intuitively If they have a CD20 patient that walks in the door who's already relatively well B-cell depleted but is having some other issue, whether it's crap gap or had some relapse, they don't feel that there's a need to go through the 150 milligram dose, which is, in some respects, a debulking dose where we take down the B-cell so we can give a full proper dose two weeks later at 450 milligrams in one hour. So, yeah, I think that the people, you know, are happy to see that, happy and not surprised to see that you can safely transition those patients to do that. So, yeah, I think that's a net positive thus far. And like I said, in the coming months, we'd like to present more data from that trial. In terms of BTK, I mean, look, I think, you know, I think most folks would believe at this point, regardless of whether one or several of the BTKs are successful in relapsing forms of MS, it's more likely than not to be an inferior profile to CD20s. I don't think anyone believes that they are, that BTKs in relapsing forms of MS will be more active, more convenient, less side effects than a CD20 gives at this point. Again, I think that's probably now a foregone conclusion. Assuming that the studies in relapsing forms of MS are successful, obviously we've had some failures and some toxicity that's been seen along the way. So we sit and we'll wait and we'll see what the data looks like. But again, I think optimism is relatively low for these drugs in relapsing forms of MS. On the other side, I do think that there's a lot of excitement for the potential for these drugs in progressive forms of MS. I think, in theory, if they would work in progressive MS, that would be phenomenal, right? As I mentioned earlier, we're looking at azacel in progressive forms of MS because that is the unmet medical need. That's the area that is most concerning and is least well-treated at this point. So I think there's excitement and enthusiasm for it to, if it works, I think there's Certainly a fair amount of pessimism that it will work. But again, anytime you have an unmet medical need, people are enthusiastic about the potential. So we shall see. Again, it would be a very nice thing for patients if these work in progressive forms of MS. I think in relapsing forms of MS, it's not a concern of ours.

Understood, Mike. Thanks for that comprehensive answer. And congrats again on all the progress.

Thanks very much, appreciate it.

Our next questions are from the line of Prakhar Azarwal with Cantor Fitzgerald. Please excuse your question.

Hi, good morning, and thanks for taking my questions, and congrats on the quarter. So following up on the sub-keto cruise uptake, based on your conversations in the field, do you expect the uptake to be similar or different between academic and community centers? And for the thousand or so physicians who have prescribed BRMV, Do you know whether the split of their IV versus sub-QCD20 is similar or different than the overall market? And I had a follow-up.

Yeah. Adam, do you want to start on the first one?

Yeah. So the first one, thanks for the question, Prakhar. The first one is where do we think the sub-Q pickup will be, right? So, you know, at this point, we can go by where Roche has guided, which is, you know, in places that don't have ID infrastructure. It's tough for us to tell exactly where this will be picked up. Um, you know, I, I don't know. And as I said earlier, I just don't detect a lot of overall enthusiasm, um, uh, for the, uh, for the product. So, uh, tough to say on that. Um, and then we asked about what are, um, what the, the IV versus, uh, sub IV versus sub key. Could you just repeat that second part of the question? Let me make sure I get it right.

Yes, for the 1,000 physicians who have prescribed BrionV so far, what's their share of IV versus subcutaneous CBT training?

Yeah, Prakhar, I don't know that, you know, but we are focused on prescribers that, you know, have significant IV share. So I don't know the exact answer to your question, but, you know, I would guess that our prescribers have a higher IV share than subcutaneous.

Got it. And just as a follow-up, on Brumby uptake and maybe mixed by academic and community centers, if you can provide more details around the uptake by these segments, and maybe which segments are seeing the most growth right now for Brumby and which segments are starting to moderate? Thank you.

Sure. Yeah, as we've said in previous calls, we've seen the initial uptake was in was in the private practices as academic centers took longer from a formulary perspective and logistics. But we've seen significant growth in all segments, and particularly in the academic centers. We continue recently in the last two quarters to see more and more ads from a prescriber perspective within the hospital segment. In Q2, The Breon B hospital segment saw its highest, you know, ever quarter-over-quarter growth in terms of absolute vials. And now, you know, the hospital segment is the largest segment of our business today. And so, but we're still seeing growth in both segments, you know, and I think that's a testament to the profile of the drug and, you know, the success that we're seeing.

Thank you.

Our next question is in the line of Ed White with HC Wainwright. Pleased to see you with your question.

Good morning. Thanks for taking my questions and congratulations on a great quarter. So I just wanted to come back to the question on the VA contract. Adam had mentioned that it's not going to be really material in 2024. I was just wondering if you can give us your thoughts on the opportunity it represents, you know, in 2025 and beyond.

Sure, Ed. Thanks for the question. Got it. Thanks for the question. What we said was the contract is for new patients and that will grow over time. I think the contract overall value was estimated at about $187 million for the five-year contract. I think we'll see. I think we're determined to try to get every new patient that is available. And we'll continue to see how that will grow over time. We don't think, compared to our overall business, we don't think it's a huge percentage. But as I mentioned, the value there is there are a lot of physicians that are in the VA that also work in academia. Our hope is that that will help to have a favorable effect overall in the academic setting. and also reinforce the overall profile of Briondi and the value proposition that Briondi brings.

And Adam, as the size of that business grows over the next couple of years, is there any impact to gross-to-net?

Sure, there will be an impact to gross-to-net, for sure, given that it's probably what we're what we offered the drug at a discount, so that will affect our personnel, yes.

Okay, thanks. And perhaps my last question is just on the share repurchase program. Are you, do you have any timelines for that? When are you going to start and, you know, any expectations of how long that program will continue to get to the $100 million?

Yeah, thanks, Ed. So we expect to get started soon. I think we'll be measured in how we do it. So it'll be, you know, open market purchases, sort of like a, I think, a 10-to-5-1 style of plan. And there is no fixed duration of time in which we will spend the $100 million in the repurchase. And some of it, you know, we'll probably build in some share price targets so we can buy more at different levels. So, yeah, I think we're going to just think about it and try to buy back as many shares as we can with the money we have for the moment. Obviously, we expect that over time we'll get to reload and buy more shares as the revenues and cash flow continue. So I think for the moment we're going to just start the buying as soon as we can and we'll see how it goes.

Okay, great. Thanks for taking my questions.

Thanks, Ed.

Thank you. Our final question is from the line of Corinne Jenkins with Goldman Sachs. Please proceed with your questions.

Hi, good morning. This is Palak on for Corinne. Just one question for us here. You touched upon seasonality for the business into the second half of the year, but could you also highlight where you see room for potential upside to your revenue guidance?

Adam, can you take that one?

Yeah, for sure. Yeah, seasonality was, as I mentioned, was limited to Q3. As I mentioned, that historically affects the entire MS market and probably disproportionately affects IV therapies, just given vacations and so on and so forth. As we've noted also, we've raised the four-year guidance for the year, which is shows that we're confident in the overall growth story here and I think upside would be continued growth and pickup both on the new patient side and as patients come back we're going to start seeing the repeat prescriptions continue to grow as new patients continue to grow and if that grows faster than we would expect I think there's certainly potential upside.

Thank you.

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

Great. Thank you. And thanks, everyone, again, for joining us on today's call. We look forward to continuing the positive momentum into the second half of 2024. And as discussed today, we'll continue to be focused on several key priorities. First, expanding Brianna's reach to ensure all eligible patients can benefit from this innovative medicine. That includes building out our commercial footprint and increasing our spending on marketing efforts. Next, advancing our BrionV expansion initiatives through our subcutaneous development, our enhanced switch study, and exploring new indications for BrionV. Finally, commencing our phase one for Azercel and Progressive MS, as well as looking at opportunities to expand our pipeline. With that, I'd like to close by thanking the patients and clinicians that put their trust in TG and BrionV, and our loyal shareholders for their support. And once again, the whole TG team for making it happen. Have a nice day.

This will conclude today's conference. Let me disconnect your lines at this time. Thank you for your participation.