- Shares of TG Therapeutics lost nearly half their value Tuesday morning after the New York biotechnology company announced a deal that led some on Wall Street to believe it’s now less likely to get acquired.
- Within the last year, TG secured marketing approval in the U.S. and Europe for its drug Briumvi, which is for adults with relapsing forms of multiple sclerosis. TG has now agreed to sell commercialization rights to Briumvi outside the U.S. to Neuraxpharm, a Germany-based drugmaker.
- TG announced this deal alongside its latest earnings report. Net sales of Briumvi in the U.S. from April through June totaled $16 million, which, according to Cantor Fitzgerald analyst Prakhar Agrawal, is below the $25 million or more investors hoped to see.
For some TG investors, the new deal and latest Briumvi sales numbers may feel like a one-two punch. Shares of the company traded around $10 apiece Tuesday morning, reflecting a roughly 50% dip from the day prior.
In a note to clients, Agrawal explained that bullish investors had viewed TG as a potential near-term takeover target. But selling off rights to Briumvi could make an acquisition seem less likely, the analyst wrote.
Terms of the deal hold that TG will receive $140 million upfront, plus an additional $12.5 million upon Briumvi’s launch in the first European Union country. The European Commission approved the drug in June.
TG could take home as much as $492.5 million in additional payments, should Briumvi hit specific launch and commercial milestones. The company will also receive tiered, double-digit royalties on net product sales up to 30%.
In exchange, Neuraxpharm gets the exclusive right to sell TG’s drug in territories outside the U.S., Canada, and Mexico, with the exemption of certain Asian countries that were part of previous partnerships.
Notably, TG retains an option to buy back all rights under the new deal for a period of two years in the event of a change in control at the company.
"From a deal perspective, the terms provided us many important benefits,” Michael Weiss, the company’s CEO, said in a statement.
Those benefits, according to Weiss, include “an upfront payment further solidifying our balance sheet, attractive economic terms providing meaningful participation in the ex-US success of Briumvi, an experienced neurology team ready to rapidly launch Briumvi, and the strategic flexibility to buy back the commercial rights over the next two years in the event of an acquisition of TG.”
TG recorded a net loss of $87 million over the first six months of this year. As of June 30, the company had $145 million in cash, cash equivalents and investment securities on hand.
TG said that sum, combined with the $140 million upfront payment from Neuraxpharm, will be “sufficient to fund our planned operations for the foreseeable future.”