What happened

Shares of the B-cell malignancy and autoimmune disease specialist TG Therapeutics (NASDAQ:TGTX) fell by an eye-popping 55.9% last month, according to data from S&P Global Market Intelligence. What triggered this dramatic sell-off?

On Sept. 25, the company announced that independent monitors couldn't evaluate the overall response rate of ublituximab and umbralisib (U2) when used in combination to treat patients with chronic lymphocytic leukemia (CLL) during a recent interim analysis. Leading up to this interim analysis, however, TG Therapeutics' management had been touting the possibility of filing for U2's approval on an accelerated basis -- based on the belief that this combo therapy would, in fact, produce a compelling overall response rate at an early juncture.  

Chalkboard chart showing an up arrow going down

Image source: Getty Images.

So what

With an accelerated approval off the table, TG Therapeutics is now counting on U2's ability to generate a superior progression-free survival rate compared to patients receiving Roche's Gazyva in the study. Unfortunately, those all-important data won't be available anytime soon.  

Now what

On the bright side, this pivotal study wasn't an outright failure and U2 still has a shot at becoming a major growth driver for the company in the years ahead.

The downside, though, is that the company doesn't have a particularly strong cash position at the moment. At the end of the last quarter, TG Therapeutics only had $126 million left in the bank. That's not a whole lot of cash for a company burning over $26.5 million per quarter, on average, over the last 12 months.

Stated simply, TG Therapeutics may have to tap the public markets in the next six months to keep its clinical program on track. That's not unusual for a clinical-stage biotech, but it's obviously an outcome investors were hoping to avoid with an accelerated product approval.  

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