Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of TG Therapeutics (NASDAQ:TGTX), a clinical-stage biopharmaceutical company focused on developing therapies to treat cancer and other unmet disease areas, surged as much as 19% after announcing a global licensing agreement with Ligand Pharmaceuticals (NASDAQ:LGND).

So what: Under the terms of the deal, TG Therapeutics is licensing the global rights to Ligand's IRAK4 inhibitor research program. Specifically, IRAK4 is a "key signaling kinase that becomes inappropriately activated in tumors that carry certain oncogenic mutations of MYD88, which can be found in patients with Waldenstrom's Macroglobulinemia, a rare B-cell cancer, as well as a sub-set of patients with Non-Hodgkin's Lymphoma and Chronic Lymphocytic Leukemia." As noted, IRAK4 inhibition could also provide benefits to other autoimmune disorders.

In exchange for licensing rights to this currently preclinical program TG Therapeutics will give Ligand an upfront licensing fee of 125,000 unregistered common stage of TG stock. TG will also pay Ligand development and sales-based milestones, as well as a mid-to-high single-digit royalty on net sales should any therapies be approved.

Now what: I believe this is a necessary move for TG Therapeutics which needs to find a way to expand its pipeline and give itself more chances to "hit a home run." Currently, it only has three clinical studies under way – although TG-1101 as a late-stage treatment for chronic lymphocytic leukemia and mantle cell lymphoma in combination with Pharmacyclics' Imbruvica delivered stellar results in the early going. Still, justifying a $400 million valuation based on the results of a single phase 1 study and the idea that it has two additional phase 1's under way might be a bit of a stretch. It admittedly licensed the IRAK4 program for a small sum (just 125,000 shares), so the deal itself looks promising on paper. The big question going forward is whether or not TG Therapeutics can justify its valuation with clinical follow-through over the next couple of years.

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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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