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Why TG Therapeutics Stock Exploded Higher Today

By George Budwell - Mar 6, 2017 at 1:15PM

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The biotech struck gold with its lead drug candidate.

What happened

Shares of clinical-stage biotech TG Therapeutics (TGTX -4.97%) soared on Monday after the company announced that its experimental leukemia drug TG-1101 (ublituximab) hit the mark in a late-stage trial when used as part of a combination therapy that included AbbVie's (ABBV 1.93%) Imbruvica. As of 12:22 p.m. EST, the stock had gained 87%.

Perhaps most impressively, the combo's overall response rate was a whopping 80% in high-risk chronic lymphocytic leukemia patients, compared to 47% in patients receiving only Imbruvica. 

Illustration of blood cancer cells

Image source: Getty Images.

So what

The Street obviously wasn't a big believer in TG Therapeutics' lead drug candidate, given the company's small market cap of less than $300 million prior to today's news. Nonetheless, these late-stage results appear to be not only strong enough to warrant a regulatory approval, but perhaps make it a go-to therapy for this rare form of blood cancer in later line settings. 

Now what

According to the press release, TG Therapeutics is planning on presenting the trial's full data set at an upcoming scientific conference, and discussing the possibility of an accelerated regulatory filing with the Food and Drug Administration as soon as possible.

Before either of these events take place, however, investors shouldn't be too surprised if TG is gobbled up by a larger pharma. In fact, AbbVie may come calling in order to protect and bolster its emerging hematology franchise. Cancer drugs, after all, are highly sought-after products in the pharma industry, especially ones with unusually strong efficacy profiles like ublituximab.

Having said that, TG's last stated cash position of around $60 million leaves much to be desired -- which suggests the company will probably use this spike in its share price to raise funds. So, investors that missed this monstrous liftoff may be able to buy a piece of this intriguing growth story at a reduced price within the next few days -- that is, after a largish secondary offering. Until then, it may be wise to simply sit back and wait for a better entry point.

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Stocks Mentioned

TG Therapeutics Stock Quote
TG Therapeutics
$4.40 (-4.97%) $0.23
AbbVie Inc. Stock Quote
AbbVie Inc.
$152.34 (1.93%) $2.89

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