The holy grail for biotech companies is to get a new treatment to market, an arduous process which many fail to complete. But even if a company is successful in navigating the clinical testing stages and regulatory hurdles, it obviously still has to find a paying audience for its drug. The latest quarterly results from TG Therapeutics (TGTX) have outlined how difficult this can be.
TG Therapeutics shares slumped by 29% this week after the company’s latest financial statement showed weak sales for the recently approved Ukoniq, TG’s treatment for patients suffering from relapsed or refractory (r/r) marginal zone lymphoma (MZL) and follicular lymphoma (FL).
The drug generated sales of $1.5 million, almost $2 million lower than the Street’s expectations and far below the $4 million in sales H.C. Wainwright’s Edward White had predicted.
White believes sales were impacted by lower access to doctors due to the pandemic and free drugs for patients. These accounted for 35% of sales, higher than both management and the analyst’s expectations.
Moreover, the company’s guidance for FY21 calls for sales between $7.5-12.5 million, also below White’s previous forecast. The analyst was estimating sales of $26.5 million, but now expects Ukoniq to generate revenue of $11.7 million.
That said, White says the feedback so far has been “positive” with the healthcare providers the company has targeted noting the treatment’s “differentiated profile.” Still, White thinks limited access to customers due to Covid could remain an issue into next year.
However, White still remains “positive on the future” and highlights a possible catalyst in 2022.
TG’s BLA/sNDA for ublituximab in combination with Ukoniq – a pairing referred to as U2 – and indicated to treat patients with chronic lymphocytic leukemia (CLL) and small lymphocytic lymphoma (SLL), has been accepted by the FDA. A PDUFA date of March 25, 2022, has been set for both applications, and the FDA has no plans for an AdCom meeting beforehand.
“We note that this population is much larger than MZL and FL,” the 5-star analyst said. “Importantly, it is expected that about 85% of potential prescribers are already targeted under the MZL and FL prescriber base.” White estimates the U2 combination in CLL could deliver sales of $21.2 million in 2022.
For now, however, due to the lowered revenue expectations, White cut the price target from $89 to $84. No need for investors to get too despondent; the revised target still calls for 12-month share gains of a huge 238%. White’s rating stays a Buy. (To watch White’s track record, click here)
Wall Street tends to agree with White’s confidence on the biotech firm, considering TipRanks analytics reveal TGTX as a Strong Buy. Shares in TGTX are selling for $24.97 each, and the average target of $58.50 indicates a possible upside of 134% by year’s end. (See TGTX stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
