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Here's Why TG Therapeutics Jumped 58.6% in May

By Maxx Chatsko – Jun 9, 2020 at 5:29PM

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The development-stage company appears to be on the path to commercial operations.

What happened

Shares of TG Therapeutics (TGTX -1.17%) rose over 58% last month, according to data from S&P Global Market Intelligence. Most of the gains were spurred by a single update in the beginning of May, but there were a number of developments propelling shares higher.

The rally began when TG Therapeutics reported positive top-line results from a phase 3 trial for its combination therapy in chronic lymphocytic leukemia (CLL). The company took advantage of the soaring stock price to raise roughly $75 million in gross proceeds from an at-the-market facility that allowed it to sell shares directly to investors. A public offering of common stock later in the month raised gross proceeds of up to $175 million. 

Despite the dilution, the pharma stock has held on to its gains through the first week of June. Shares of TG Therapeutics have gained 64% since the beginning of 2020.

An arrow bouncing up shelves on a wall.

Image source: Getty Images.

So what

TG Therapeutics began turning heads in 2019 with two experimental treatments aimed at blood cancers. The first is a combination of a monoclonal antibody, ublituximab, and a checkpoint inhibitor, umbralisib, that is simply referred to as "U2." The second is a triple-combination therapy that combines U2 with a standard chemotherapy treatment called venetoclax. 

In May, the company reported positive top-line results from a phase 3 trial for U2 in CLL. The combination therapy met its primary endpoint of improved progression-free survival (PFS). In fact, the drug candidate was so successful the clinical trial was stopped early so that all patients in the study could be switched to the experimental therapy. 

That's about as good as it gets for a phase 3 study, but investors shouldn't forget that the triple-combination actually delivered more impressive results than U2 alone. That suggests TG Therapeutics might just have a best-in-class portfolio for treating blood cancers, including a chemotherapy-free option.

Now what

TG Therapeutics expects to present full data from the phase 3 clinical trial and submit a new drug application (NDA) to regulators before the end of 2020. Including recent fundraising transactions, the company should end the first half of the year with approximately $300 million in cash -- more than enough to continue developing its pipeline and hit the ground running as it (very likely) transitions to commercial operations in 2021.

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool recommends TG Therapeutics. The Motley Fool has a disclosure policy.

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