Greetings, and welcome to the TG Therapeutics Fourth Quarter Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jenna Bosco, Senior Vice President of Corporate Communications. Please go ahead.

Thank you. Good morning, and welcome to our conference call regarding TG Therapeutics' fourth quarter and year end 2019 financial results and business update. I'm Jenna Bosco, TG's Senior Vice President of Corporate Communications, and I welcome you to our conference call today. Following our Safe Harbor statement, Sean Power, our Chief Financial Officer, will provide a brief overview of our financial results and then turn the call over to Michael Weiss, the company's Executive Chairman and Chief Executive Officer, who will provide an update on the ongoing development of our lead compounds, ublituximab and umbralisib, as well as an overview of our overall company standing. Before we begin, I would like to remind everyone that various remarks we make about our future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. TG cautions that these forward-looking statements are subject to risks and uncertainties 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. 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. All participants on this call be on a listen-only mode. Now I would like to turn the call over to Sean Power, our Chief Financial Officer, to briefly discuss the financial results for the fourth quarter and year end 2019 as well as the company's overall financial condition.

Thank you, Jenna, and thanks, everyone, for joining us. As you may be aware, our financial results were released this morning and can be viewed on the Investors and Media section of our website. I'll begin with our fourth quarter financial results. As we've guided in the past few quarters, our net loss continues to decrease. Excluding non-cash items, our net loss for the fourth quarter of 2019 was approximately $34 million compared to $59.9 million in the third quarter of 2019 and $52.4 million in the fourth quarter ended December 31, 2018. The decrease we've seen in net loss as compared to the reference quarters is primarily related to decreased clinical trial and manufacturing expenses. Our GAAP net loss for the fourth quarter of 2019, inclusive of non-cash items, was $39.6 million or $0.44 per share compared to a net loss of $53.9 million or $0.68 per share during the comparable quarter in 2018. Our net loss for the year ended December 31, 2019, excluding non-cash items, was approximately $161.4 million, which included approximately $56 million of manufacturing and CMC expenses for Phase III clinical trials and in preparation for commercialization. The GAAP net loss for the year ended December 31, 2019, inclusive of non-cash items, was $172.9 million or $1.96 per share compared to a net loss of $173.5 million or $2.30 per share for the year ended December 31, 2018. Turning now to our cash position. We ended the year with cash, cash equivalents and investment securities of $140.4 million. With our major clinical programs, UNITY-CLL and the ULTIMATE-MS program continuing to near completion and the bulk of our manufacturing costs now behind us, we expect that our near term R&D costs will continue to decrease. While we expect to modestly offset that decrease with some commercial launch and readiness costs, we believe our cash will be sufficient to fund our operations well into 2021, and importantly, through our Phase III readouts for UNITY-CLL and ULTIMATE-MS, as well as potentially our first approval in MZL and follicular. With that, I will now turn the call over to Mike Weiss, our Executive Chairman and CEO.

Great. Thanks, Sean, and thanks, Jenna. Thanks, everyone, for joining us this morning. 2019 was an exciting year for us, and 2020 is off to a great start with multiple impactful catalysts on the way. But before I review all the great accomplishments of 2019 and what's in store for 2020, I want to start with an update on UNITY-CLL, which, of course, is on top of everyone's minds. So let me remind everyone that the UNITY-CLL clinical trial is a randomized study of U2 versus the combination of the chemotherapy, chlorambucil, plus the CD20, obinutuzumab, which is marketed as GAZYVA. This combination is referred to as GC. The primary endpoint is progression-free survival, and the trial is being conducted under a special protocol assessment with the FDA. This is an event-driven trial, meaning can only end once a certain number of PFS events occur. A PFS event is when a patient dies or their disease progresses. With that as a background, the quick update is that we have not yet hit the requisite number of events. To us, this is a very positive sign and further reinforces our confidence in a successful outcome, because the longer it takes for the events to occur, should point to a greater than expected benefit for the U2 arm. Based on our original projections, we would have expected a significant ramp in events over the past several months, which did not occur. Accordingly, we believe we are either on the verge of a significant uptick in events or that the U2 arm is providing greater benefit over GC than originally modeled. That, of course, assumes that the GC performance is relatively fixed within its historical range. However, since we are fully blinded to all the efficacy data, other factors, including GC performance -…

Thank you. [Operator Instructions] Your first question comes from the line of Alethia Young with Cantor Fitzgerald. Please proceed with your question.

Hey, guys. Thanks for taking my questions and congrats on a lot of progress, and yes, it seems like it's going to be an exciting 2020. Maybe three. One, I'm just a little curious about - with GC, like is there anything related to maybe the baseline or that's being used in the first-line that would lead to its outperformance? I just figured there must be some sort of hypothesis. And then secondarily, a lot of times, interims are kind of decided on earlier in trials. So I guess I'm wondering what points and broad strokes kind of got the FDA comfortable that you guys aren't - that you say they're comfortable you taking an interim and spending the alpha, I assume, to do that? And the third question is, is there any risk that, like, I think, it sounded like there were some bolus events that should have occurred? I mean, is there any risk if the bolus now occur faster than what you think? And - before an interim could occur in the next 90 days? Thanks.

Sure. So first question on GC outperformance. I mean, we certainly don't think GC is going to outperform. And I think our personal belief is that GC is going to underperform certainly the CLL-11 study where it had about a 27-month PFS. In more recent trials, ILLUMINATE and ELEVATE, it had 19 months PFS in ILLUMINATE, 22 - or 22.5 months of PFS in ELEVATE. Those are in frontline patients. So remember, you're going to almost cut that in half, give or take, just an approximate for the relapsed patients. So we think that it's more likely that the PFS for frontline patients using GC is going to be closer to the ILLUMINATE and ELEVATE than it would be to CL-11. One of the major reasons we believe that is that in CLL-11, they basically treated the 6-month - they did the 6-month treatment period. They waited, I think, a month or two. They scanned the patients. And then all future scans were contingent upon the investigator basically recommending the patient for a scan. So they come in for an office visit. If they don't believe that they're progressing, they don't send them for a scan. ILLUMINATE, ELEVATE and UNITY-CLL were all regularly scheduled scans. So it was every 3 months, I think, I believe in the first 24 months on study, and then every 6 months thereafter. So our feeling is that when you're looking for it, you'll see more. The investigators when they're doing on their own, we just end up missing, and I think that's the difference between ILLUMINATE, ELEVATE, UNITY-CLL and CL-11, on the other hand. So again, we don't believe that there's any real good chance that GC is outperforming. It really wouldn't make much sense. We have a lot of recent information with the…

It was just a question like, I think, you said there was a bolus of events you guys had expected to come. So I just wondered, like, are there any risks that now the interim - that your bolus of events comes before you get to an interim, meaning the trial completes the final before you get to the proposed interim 90 days from now?

I don't think so, but it either way would be fine. If it ends up being a final analysis because we do get a large bolus in over the next few months, I mean, there is a lag in us getting event information. The scans come in, and then they're batched, and then we get them. So yes, I mean, is it possible that there's a large bolus sitting there, and then over the next several times we get scan reports, there will be a big bolus in there, and we go to a final analysis? It's possible. I don't think it's likely. This thing has flattened out pretty good for us. And - but if it does, that's fine, too. It doesn't - won't really impact us in any way, that will be fine. But when - at the point in which we are in this trial, we are - I think we're 28 months approximately, give or take, from the last patient in. Median in follow-up is probably in the 32-ish month range at this point, give or take. So we are out there. We are well beyond - even in the most rosy scenario, we are well beyond the GC median. If you look at the studies with GC at this - even with - even looking at CLL-11, and obviously, ILLUMINATE and ELEVATE, GC in the frontline will have provided about as many events as is going to provide at this point. So the missing - and one would, of course, expect that the GC front - relapsed patients have already given up all of those events. And one at this point of maturity, the U2 relapsed arm will have given up quite a bit of their events. So the only missing link is the U2 frontline patients, and that's why we feel confident that what we're seeing is a substantial difference in what we expected and benefit. But I don't think it's a risk. If those events do come in, that's great. So we'll go to a final analysis. But we're already well beyond when we thought we would have had all those events based on the original powering. And that's - and just to go back, I mean, we've talked about this for quite some time, where we were saying, look, our expectation is this, if the powering is correct, we should have these events in a certain time frame. And that's why we were expecting the events in the time frame which we had just passed through. We didn't see it again, I think, the short answer to your question is there's no risk. If it happens, that's great; if not, we've got the interim. So we have a hedge, basically. We're going to - study's going to be completed essentially in the time frame that we've discussed. It's either going to be via an interim or via the final, more likely via the interim at this point.

Okay, great. Thanks. That’s helpful color.

Yeah.

Your next question comes from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

Hi. Good morning, guys. Thanks for the color. Just wanted to - since it's new for us, just dig into - a little bit more into the mechanics of the interim. You kind of walked through kind of quickly how it's going to work in your prepared remarks, but can you kind of set the stage again and how it will work?

Yeah. I mean it will be hopefully relatively straightforward. Again, there is a set number of events for that interim once those events are in, which, like we said, we expect those will be in, in the next 30 to 60 days. Soon as that's in, you can basically lock the database for that interim. And then hopefully, it'll take no more than 30 days to get that data put together. There's a delay in which they're basically reading all the scans and making sure what is there is there. And so once that occurs, we should have the data out soon thereafter.

So I guess on that interim analysis, it's potential that you could see that GC hit its median PFS, while the UNITY U2 arm did not. And so in that case, it still hasn't hit its median PFS. Is that a data set you could file on?

Yeah. So it's all based on hazard ratio. So the medians are useful in creating the differences, but the hazard ratio takes into account the entire curve. And so just by way of example, in ILLUMINATE, in ELEVATE, in MURANO, in CLL-14, none of the active arms reached a median when the studies were stopped. So it's not - it's actually more rare to see the active arms reach a median in these recent studies than it is to see them reach a median. So they - and those all studies, obviously, were fine. And of course, this interim is under the special protocol assessment. But no, it's based on a hazard ratio, and it does not necessarily need to have hit a median for the active arm.

Thank you. Perfect. And just switching gears a little bit to your pipeline, I guess, the ULTIMATE program. Can you give us a sense in terms of, if that reads out positive in terms of, I know, relapse rate, what the position of ublituximab could be in the MS market?

Yeah. So we would expect at this point that, that will be the third CD20 to market. You've got ocrelizumab, which is on the market and is selling, as we mentioned earlier, almost $4 billion in 2019. Ofatumumab, formally ARZERRA, I mean, on the cancer side will be rebranded. I'm not sure what the new brand name is. It will be rebranded and brought forward. That application is in to the FDA, and so the expectation is in the next 6 to 9 months or so that they'll be on the market, and then we will come in after that. To my knowledge, there's no other CD20s in development or in late-stage development for MS. So I think that the CD20 portion of this market at least for some foreseeable time frame will be locked as the 3 competitors. In terms of positioning, there'll be 2 drugs, assuming, of course, that we get approved and assuming, of course, that ofatumumab gets approved, there will be 3 drugs on the market, two of them, ocre and ubli will be IV infusions and ofatumumab will be - after 3 weeks in a row of subcu injections in the office, it will be a take-home 1 month or every month subcu injection. So it's going to come down to personal preference, is what we've been hearing. It will be actually personal preference and access. So depending on if the patient has access to all 3 compounds, the physician will have a discussion with them on what their preference is. Do they want to self-inject themselves, do they want an IV infusion? If they want an IV infusion, we think we have a very competitive profile. We'll hopefully be able to offer a very competitive price. But ours will be a 1-hour infusion versus currently a 3- to 4-hour infusion for ocre. So I think we'll do quite well with the convenience factor. And again, hopefully, if we're - if we can get it done, we can try to bring a product that could even be less of a financial impact to the patients themselves. So I think we've got a nice position in this marketplace. It's a pretty tight market. Projections are that this market could be - just the CD20 portion of MS treatment could be upwards of $10 billion to be shared by 3 companies. I think that's a pretty good place to be. And obviously, we're super excited about it.

Great. Thank you. And then last question, I guess, since November, there's been building excitement around the anti-CD47 class of products, culminating yesterday with the 47 buyout for almost $5 billion. Can you give us some more detail on your anti-CD47 bispecific program? And how you - how that fits into that landscape?

Yeah. So our CD47 has, and I say this in a positive way, some limitations. So it's been basically attached to a CD19. So there is 2 arms to this antibody. There's a CD47 arm and a CD19 arm. And this drug is designed specifically to attach to CD19 positive cells. So the good news is that it should ideally avoid some of the hematological toxicities associated with targeting CD47 on a naked basis. And the further good news is that for a company like ours, where we're focused exclusively on B-cell malignancies that landing on CD19 is a perfect complement to our mission, which is to find the best treatments available for patients with B-cell malignancies. So it's a highly targeted agent that focuses on CD19 positive cells, and once it's there, engages and blocks CD47. And what we've seen with the other CD47 compound is that in combination with CD20, actually, on its own, the CD47 in B-cell malignancies are the naked version. On its own, it's relatively inactive as a single agent. It had dramatic activity once you mixed it with CD20. So I guess, two things of note: one, this drug already has its own CD20-like activity since it has a CD19 arm. It will have a similar activity to CD20. And then, of course, we have ublituximab to combine with this compound. So we are very excited to commence the combinations of our CD47 with U2, particularly in things like follicular marginal zone and CLL, where U2 looks to be quite active. And again, in diffuse large B cell, we're still waiting to hear more, but the CD47 and CD20 combination looks quite interesting. So we're looking forward to trying ours in that setting as well.

Thanks, Mike. And congrats on the progress.

Thanks, Matt.

Your next question comes from the line of Ed White with H.C. Wainwright & Company. Please proceed with your question.

Hi, guys. Good morning.

Hey, Ed.

Hi. So it's just a follow-up on the 1801. When will we see the next data from this study?

So you're being generous by saying next. You really meant the first. Very generous. So the first data, I would expect that, for sure, I shouldn't say that, for sure. I would expect certainly by ASH, we'd be able to present a reasonable portion, if not all, of the Phase I trial. Well, not all of it because there will be longer follow-up. But I think, certainly, we will be through the dose escalation phase. It's possible that we could do some early data at EHA. But I think it's some time EHA to ASH is the more - most likely scenario. We're in the dose escalation. We think we're getting close to finding a dose. And then once we get there, we'll be able to do some expansion and start the combinations. So we're on the precipice, but we're still trying to figure out the right dose.

Okay, great. Thanks, Mike. And just maybe if you can give us an update on the Phase II ULTRA-V trial. This data was very exciting at ASH. And just talk about your expectations for the trial, and ultimately, where it's going to fit in the treatment paradigm, if the data holds up?

Yeah. So ULTRA-V is taking off. So enrollment has really started to kick in as we got into the early part of this year, which we're still in, but the things are starting to roll along. I'd say we're, give or take, about a third of the way through enrollment, but it's really all been in the last 2 months or so. So it's moving quite well. Our goal is to have that fully enrolled before the end of the year. I would also just mention that ULTRA-V is at a larger multicenter Phase II, but the Phase I, which we do have open at, I think, at least 2, maybe 3 sites has also continued to enroll, and I think, we're at 30-plus patients in there. So collectively, we may have 60-plus patients, maybe even more on the U2 plus venetoclax combination at this time. So we're looking forward to a - hopefully will be a nice update at ASH this year with a significant number of patients. Again, the only drawback of this trial design, but there's no way to control it, is that you want - the 12 month is where we basically look at the bone marrows to assess undetectable MRD. So we'll see how many patients we actually have through 12 months at this coming ASH, but we'll have patients through interim periods, and we'll be able to show, obviously, the safety profile putting these things together and the ability to take venetoclax high- and medium-risk patients and drop them down to low risk. So there'll be plenty of information. Where do we see this regimen to the end, the U2 plus venetoclax? Right now, venetoclax is primarily used in academic centers. It's used in some community centers, but it's not as popular - certainly,…

Great. Thanks, Mike. And maybe just a last question for Sean. The G&A, non-cash comp was significantly higher in the fourth quarter of '19 versus pretty much all prior quarters. I'm just wondering if this is a onetime impact? What's going on here or if this is the new base going forward? Thanks.

Thanks, Ed. That stuff tends to be a little bit lumpy from quarter to quarter. I would say it's more likely a onetime bump in that than a new base.

Okay, great. Thanks, Sean.

Your next question comes from the line of Chris Howerton with Jefferies. Please proceed with your question.

Great. Yes. So I think most of the important questions were asked. And maybe just a couple of clarifying ones with respect to the interim analysis. So for - what are the actual outcomes that can happen here? Is this a success, failure question only? Or is there a possibility that the study would continue as a result of the interim analysis, perhaps with an increased sample size or something of that nature?

Yeah. So thanks for the question, Chris. So the sample size is that the total events for a final analysis, as I was kind of discussing earlier, maybe not so clearly, but there's a set number of events for the final analysis, that's been - that was predetermined when we started the trial. There is another smaller number of events that is set for the interim. So yes, there is 2 outcomes that could - the study could stop for efficacy or would continue on to the final analysis. If the final - again, which goes back to our point of - if we're going to a final analysis, there should be a spike in events pretty soon. I mean, it's inconsistent with statistics and with life for the studies to not stop and also not to see the events. Something has to give. Again, unless GC is so much better than it's ever been in any trial, it's inconsistent that one of the two things have to happen either. The study stops because it's working so well or we're going to wake up in the next few weeks, and there's going to be a lot of new events. It just can't be that magically, there is no events, and also, there is not a differential.

Sure. Right, it totally makes sense. And then, I guess, maybe could you give us a frame of reference in terms of the percentage of patients that would be required for a PFS event for the full relative to the interim? Like how much big of a difference are we talking about here? And how might this relate to other trials that are PFS-driven in terms of percentage of patients?

I don't know that I could speak to how this would impact other studies that are being reported as PFS.

Not impact. But just with other PFS-driven trials, they have a certain percentage of their patients that would need to experience an event. How would you relate your percentage of patients that require event both in the final and the interim analysis, just in terms of other oncology trials that are event-driven of this nature?

Yeah. I mean, I think, this - I still don't fully understand the question, Chris, but I'm just going to answer a question that I think I'm going to - I think you're asking, which is - sorry about that. I think this interim analysis is relatively consistent with other studies that have been conducted in the B-cell space where there have been early stoppage for activity?

Okay. All right. Well, I think that’s all of my questions. Thank you so much and really look forward to updates in the future.

Okay. Thanks, Chris. Appreciate it.

[Operator Instructions] Your next question comes from the line of Mayank Mamtani with B. Riley FBR. Please proceed with your question.

Thanks for taking my question and congrats to you on the progress. Just on UNITY-CLL. If - I mean, there were a couple of monotherapy arms that were also part of the study originally. I was just curious if that added any value to some of the recent dialogue around the interim or the full analysis? And then I have a follow-up question on the rolling submission.

Sure. So the short answer is no. The single agent arms were not part of the conversation. It is purely based on just the timing of events and the new information from other studies outside of our trial that impacted that discussion.

Okay. Is there a median - maybe clarify on that, is there a median on that, that has been reached?

I don't have that information.

Okay, great. And then on the rolling submission, is there a follow-up, and I understand there's a lot of non-clinical elements of the filing also going in. I'm just curious, is there a particular follow-up, you need to go for MZL or even FL that informs when you could kind of cut the data and submit it - submit the package?

So there is, but it has to pass. Yes, so there was definitely a requested minimum follow-up by the FDA. We haven't actually disclosed exactly what it was, but that is now passed. So our databases are locked, and they're cleaning everything and getting the CSRs in place. And so yes, it's all happening. But there was a requested minimum follow-up from the FDA.

Okay, great. And the next one is maybe for Sean and Mike both. As you think about the R&D, next 12 months to 24 months, like which is the - which is like a bigger study that you might be thinking about. I understand a lot of earlier-stage studies are at dose escalation. But if you think about advancing any of the triple therapy to maybe get to a finite duration cure like regimen for CLL. Like what should we expect that could be a larger study in the next 12 months?

Yeah. So I think in the next 12 months, things have - we are considering - well, one thing we will have to do is a randomized trial in follicular and marginal zone lymphoma as part of assuming all goes well and we get approved, we will have a post-approval commitment to run a randomized trial. So that study will - again, based on the time lines of when we'd hope to be approved, that study would certainly have to start within the next 12 months. So that would be one study. And then, yes, turning back to the triple therapy, we are positioning U2 plus our BTK inhibitor 1701 for a Phase III trial that, ideally, we would like to get up and running within the next 12 months. Some of it is contingent on making sure we've identified the right dose for the combination together, but that is something we would like to be able to do as possible. And then the other part of it is - the other one would be U2 plus venetoclax to assess whether a randomized trial would be required. So that's, I think, on the docket for exploration. We're certainly going to look at the ULTRA-V data plus our Phase I data and assess the usability of that data for perhaps an accelerated approval, which would certainly - if that were the case, it would lead to a requirement for a randomized. And if that's not usable, we'd also consider starting or randomizing that triple combination as well.

Great. Thanks for the helpful color.

Yeah. Anytime.

Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back to Mr. Mike Weiss for closing remarks.

Great. Thank you very much, and thanks all for joining us. Let me just wrap up today's call once again by reviewing the upcoming key goals and objectives. So first and foremost, we expect to have the top line PFS data from the Phase III UNITY-CLL trial over the next 60 to 90 days. Soon thereafter, we are targeting completion of our first rolling NDA submission for patients with previously treated marginal zone lymphoma and follicular lymphoma, again, also first half of this year. Heading into the second half, we are targeting top line data from the ULTIMATE Phase III trials in relapsing MS. And if all goes well, towards the end of the year, we could possibly have the first approval for MZL and/or follicular. And also by the end of the year, we'd like to, again, assuming all goes well for UNITY-CLL, we'd like to have that submission in - before the end of the year. And then finally, of course, we will continue to advance our early development pipeline, 1501, 1701, 1801, all as single agents, but also in combination with U2 and our other pipeline products. So on behalf of all of us at TG, I'd like to thank, of course, our investigators and their patients. Without them, we wouldn't be anywhere; and of course, our employees also without them, we wouldn't be in there; and our shareholders for their continued support. So thanks again, everyone, for joining us, and have a great day.

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