TG Therapeutics, Inc. (TGTX) Bundle
Understanding TG Therapeutics, Inc. (TGTX) Revenue Streams
Understanding TG Therapeutics, Inc.’s Revenue Streams
The primary revenue streams for TG Therapeutics, Inc. are derived from product sales and various licensing agreements. The company’s main product is BRIUMVI, which has significantly contributed to its revenue since its commercial launch.
Breakdown of Primary Revenue Sources
- Product Revenue: For the nine months ended September 30, 2024, product revenue, net was approximately $206.4 million, compared to $48.9 million for the same period in 2023.
- License, Milestone, Royalty and Other Revenue: This revenue was $14.4 million for the nine months ended September 30, 2024, down from $140.8 million for the same period in 2023.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate showcases a substantial increase in product revenue:
- Product Revenue Growth: 322% increase from $48.9 million in 2023 to $206.4 million in 2024.
- Overall Revenue Growth: Total revenue for the nine months ended September 30, 2024, was $220.8 million, compared to $189.7 million in 2023, reflecting a growth rate of approximately 16.4%.
Contribution of Different Business Segments to Overall Revenue
| Revenue Source | 2024 Revenue (in millions) | 2023 Revenue (in millions) | Percentage Contribution (2024) |
|---|---|---|---|
| Product Revenue | $206.4 | $48.9 | 93.6% |
| License Revenue | $0.1 | $140.1 | 0.05% |
| Milestone Revenue | $12.5 | $0.0 | 5.7% |
| Royalty Revenue | $0.4 | $0.0 | 0.2% |
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams are largely attributed to the commercial launch of BRIUMVI in January 2023, which resulted in a sharp increase in product sales. The decline in license revenue from $140.8 million in 2023 to $14.4 million in 2024 was primarily due to the recognition of a one-time $140 million upfront payment in 2023, which was not repeated in 2024.
Overall, the company has demonstrated a strong capability to generate substantial revenue from its product offerings while experiencing fluctuations in licensing revenues tied to specific agreements and milestones.
A Deep Dive into TG Therapeutics, Inc. (TGTX) Profitability
A Deep Dive into TG Therapeutics, Inc. Profitability
Gross Profit, Operating Profit, and Net Profit Margins:
| Metrics | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|
| Total Revenue | $220.8 million | $189.7 million |
| Cost of Revenue | $23.1 million | $6.3 million |
| Gross Profit | $197.7 million | $183.4 million |
| Operating Expenses | $208.8 million | $156.6 million |
| Net Income | $52,000 | $27.1 million |
| Gross Margin | 89.6% | 96.7% |
| Operating Margin | -3.1% | 14.3% |
| Net Profit Margin | 0.02% | 14.3% |
Trends in Profitability Over Time:
The comparison of profitability metrics shows significant changes from 2023 to 2024. The gross margin decreased from 96.7% in 2023 to 89.6% in 2024, reflecting increased costs associated with product sales. Operating income has transitioned from a profit of $33.1 million in 2023 to a loss of $11.9 million in 2024. This shift indicates a downturn in operational efficiency, attributed to rising operational expenses associated with commercialization efforts.
Comparison of Profitability Ratios with Industry Averages:
| Profitability Ratios | Company (2024) | Industry Average |
|---|---|---|
| Gross Margin | 89.6% | 75% |
| Operating Margin | -3.1% | 10% |
| Net Profit Margin | 0.02% | 8% |
Analysis of Operational Efficiency:
The increase in cost of revenue from $6.3 million in 2023 to $23.1 million in 2024 illustrates a significant uptick in operational costs. This is directly correlated with the ramp-up in commercialization of the product BRIUMVI, which began sales in January 2023. Research and development expenses also rose to $70.4 million in 2024 from $58.7 million in 2023, indicating a continued investment in product development despite the decline in operating and net profit margins.
Overall, the financial health of the company shows a complex picture of profitability, with a mix of strong gross margins but challenges in operational and net profitability due to rising costs and increased expenditures in R&D and commercialization efforts.
Debt vs. Equity: How TG Therapeutics, Inc. (TGTX) Finances Its Growth
Debt vs. Equity: How TG Therapeutics Finances Its Growth
The company has a total debt of $107.6 million as of September 30, 2024, which includes both long-term and short-term debt. The breakdown is as follows:
| Debt Type | Amount (in millions) |
|---|---|
| Long-term Debt | $95.0 |
| Short-term Debt | $12.6 |
The debt-to-equity ratio stands at 0.56, which is below the industry average of approximately 1.0. This indicates that the company relies more on equity financing compared to debt financing when funding its growth initiatives.
In the past year, the company undertook significant debt issuances. In March 2024, it secured a new $244.8 million Initial Term Loan with Blue Owl, which was partly used to refinance existing debt. Furthermore, the firm reported interest expenses amounting to $17.0 million for the nine months ended September 30, 2024, an increase from $10.2 million in the prior year.
The company has maintained a balance between debt financing and equity funding through various mechanisms, including public offerings and private placements. In 2024, it issued common stock and generated approximately $134.6 million from financing activities, which included proceeds from the new loan arrangement.
As of September 30, 2024, the company's financial position is characterized by:
| Financial Metric | Value |
|---|---|
| Total Assets | $586.0 million |
| Total Liabilities | $393.9 million |
| Stockholders' Equity | $192.2 million |
This structure indicates a solid equity base compared to its liabilities, reflecting a prudent approach to financing its growth.
Assessing TG Therapeutics, Inc. (TGTX) Liquidity
Assessing TG Therapeutics, Inc. (TGTX) Liquidity
Current Ratio: As of September 30, 2024, the current assets amounted to $341.0 million, while current liabilities were approximately $393.9 million, resulting in a current ratio of approximately 0.87.
Quick Ratio: The quick assets, excluding inventory, were estimated at $341.0 million, with the same current liabilities of $393.9 million, yielding a quick ratio of approximately 0.87.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, was calculated as current assets minus current liabilities, resulting in a negative working capital of approximately ($52.9 million). This reflects a deterioration compared to the previous year, where the working capital was approximately $56.1 million.
Cash Flow Statements Overview
Below is a summary of cash flows for the nine months ended September 30, 2024, compared to the same period in 2023:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash used in operating activities | ($14,876) | ($18,203) |
| Net cash used in investing activities | ($16,824) | ($5,896) |
| Net cash provided by financing activities | $134,599 | $72,706 |
Cash used in operating activities decreased from $18.2 million in 2023 to $14.9 million in 2024, attributed to increased revenues. However, cash used in investing activities increased significantly from $5.9 million to $16.8 million due to larger investments in securities.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, total cash, cash equivalents, and investment securities stood at $341.0 million. The company anticipates that these funds, along with projected revenues from BRIUMVI, will be sufficient to cover operating cash requirements for at least the next twelve months. However, the negative working capital and current ratio below 1 indicate potential liquidity concerns that investors should monitor closely.
Is TG Therapeutics, Inc. (TGTX) Overvalued or Undervalued?
Valuation Analysis
As of 2024, the valuation analysis of TG Therapeutics, Inc. involves several key financial ratios and metrics that investors should consider.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is based on the earnings per share (EPS) for the last twelve months. For the nine months ended September 30, 2024, the diluted net income per share was $0.02. Assuming the stock price is around $23.00, the P/E ratio would be approximately 1,150.
Price-to-Book (P/B) Ratio
The book value per share can be calculated using total stockholders’ equity. As of September 30, 2024, the total stockholders' equity was $192.2 million with 155.9 million shares outstanding. This results in a book value per share of approximately $1.23. Given a stock price of $23.00, the P/B ratio is approximately 18.7.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
To calculate the EV/EBITDA ratio, we first need the enterprise value, which is calculated as market capitalization plus total debt minus cash and cash equivalents. As of September 30, 2024, the company had $341.0 million in cash, total liabilities of $393.9 million, and assuming a market cap of $3.6 billion (based on stock price). Therefore, the enterprise value is approximately $3.6 billion + $393.9 million - $341.0 million = $3.65 billion. The EBITDA for the nine months ended September 30, 2024, was $11.98 million. Thus, the EV/EBITDA ratio is approximately 304.6.
Stock Price Trends
Over the last twelve months, the stock price has experienced significant volatility. The stock price was approximately $34.01 in June 2023 and has since decreased to around $23.00. This represents a decline of approximately 32.4%.
Dividend Yield and Payout Ratios
Currently, the company does not pay any dividends, resulting in a dividend yield of 0%. The payout ratio is also 0% as no dividends have been distributed.
Analyst Consensus on Stock Valuation
Analyst ratings for TG Therapeutics, Inc. suggest a consensus of Hold based on recent evaluations. The target price set by analysts varies, with most aligning around $25.00 to $30.00.
| Metric | Value |
|---|---|
| P/E Ratio | 1,150 |
| P/B Ratio | 18.7 |
| EV/EBITDA Ratio | 304.6 |
| Stock Price (Current) | $23.00 |
| Stock Price (1 Year Ago) | $34.01 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
Key Risks Facing TG Therapeutics, Inc. (TGTX)
Key Risks Facing TG Therapeutics, Inc.
Overview of Internal and External Risks:
TG Therapeutics, Inc. faces a variety of risks that could impact its financial health. These include:
- Industry Competition: The pharmaceutical industry is highly competitive, with numerous companies vying for market share in the treatment of multiple sclerosis and other diseases. The introduction of new therapies could affect the sales of BRIUMVI, the company’s primary product.
- Regulatory Changes: Regulatory approvals are critical for drug commercialization. Any changes in FDA policies or delays in approvals can adversely affect revenue streams.
- Market Conditions: Economic downturns or changes in healthcare policies can influence the demand for pharmaceutical products, impacting sales and profitability.
Operational, Financial, and Strategic Risks:
Recent earnings reports highlight several operational and financial risks:
- Revenue Volatility: For the nine months ended September 30, 2024, product revenue was approximately $206.4 million, a significant increase from $48.9 million during the same period in 2023. However, license, milestone, royalty, and other revenue dropped to $14.4 million from $140.8 million year-over-year.
- Cost of Revenue: The cost of revenue increased to $23.1 million for the nine months ended September 30, 2024, compared to approximately $6.3 million for the same period in 2023.
- Accumulated Deficit: As of September 30, 2024, the accumulated deficit stood at $1.6 billion, indicating significant historical losses.
Mitigation Strategies:
The company has implemented several strategies to mitigate risks:
- Cash Reserves: As of September 30, 2024, TG Therapeutics had $341.0 million in cash, cash equivalents, and investment securities, which is anticipated to cover operating cash requirements for at least twelve months.
- Share Repurchase Program: The Board approved a share repurchase program for up to $100 million of outstanding shares, which may help stabilize stock prices.
- Partnerships and Collaborations: The company has engaged in significant partnerships, such as the Commercialization Agreement with Neuraxpharm, which includes milestone payments and royalties that could enhance revenue stability.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | Increased competition from new therapies. | Potential decrease in market share for BRIUMVI. |
| Regulatory Changes | Delays or changes in FDA regulations. | Impact on revenue from delayed product launches. |
| Market Conditions | Changes in economic conditions affecting healthcare. | Reduced demand for pharmaceutical products. |
| Revenue Volatility | Fluctuations in product and licensing revenue. | Product revenue increased to $206.4 million; licensing revenue fell to $14.4 million. |
| Cost of Revenue | Rising costs associated with product sales. | Cost of revenue increased to $23.1 million. |
| Accumulated Deficit | High historical losses impacting financial stability. | Accumulated deficit of $1.6 billion as of September 30, 2024. |
Future Growth Prospects for TG Therapeutics, Inc. (TGTX)
Future Growth Prospects for TG Therapeutics, Inc. (TGTX)
Analysis of Key Growth Drivers
The primary growth driver for the company is the product BRIUMVI, which generated approximately $206.4 million in product revenue for the nine months ended September 30, 2024, compared to $48.9 million for the same period in 2023. This increase is attributed to the commencement of commercial sales following FDA approval in January 2023.
Additionally, the company received a $12.5 million milestone payment under the Neuraxpharm Commercialization Agreement for the first key market launch in the EU. This agreement grants Neuraxpharm exclusive rights to commercialize BRIUMVI outside the U.S., Canada, and Mexico.
Future Revenue Growth Projections and Earnings Estimates
Revenue projections indicate continuing growth, with expectations for BRIUMVI sales to expand as the product gains traction in international markets. The company anticipates tiered double-digit royalties up to 30% on net product sales in the territories covered under the commercialization agreement.
For the three months ended September 30, 2024, product revenue was reported at $83.3 million, increasing from $25.1 million in the same quarter of 2023.
Strategic Initiatives or Partnerships That May Drive Future Growth
Strategic partnerships, particularly the agreement with Neuraxpharm, are expected to be significant. This partnership not only provides immediate milestone revenue but also enhances market access for BRIUMVI in Europe. The potential for additional milestone payments totaling up to $492.5 million is also a key factor.
Furthermore, the Precision License Agreement with Precision for the development of CAR T therapies is anticipated to open new avenues for growth in the treatment of autoimmune diseases.
Competitive Advantages That Position the Company for Growth
The company’s focus on innovative therapies, particularly in the oncology and autoimmune sectors, positions it well against competitors. The exclusive rights granted to Neuraxpharm for BRIUMVI outside of North America create a competitive edge in international markets. Additionally, the company’s strong pipeline and ongoing research and development efforts support future growth.
| Metric | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Product Revenue, Net | $206.4 million | $48.9 million |
| License, Milestone, Royalty Revenue | $14.4 million | $140.8 million |
| Total Revenue | $220.8 million | $189.7 million |
| Net Income | $52 thousand | $27.1 million |
| Cash and Cash Equivalents | $341.0 million | N/A |
As of September 30, 2024, the company reported total liabilities of $393.9 million and stockholders’ equity of $192.2 million.
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Updated on 16 Nov 2024
Resources:
- TG Therapeutics, Inc. (TGTX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of TG Therapeutics, Inc. (TGTX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View TG Therapeutics, Inc. (TGTX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.