Hedge on TG Therapeutics?

Written by GSCR Staff   
Thursday, 01 October 2015 06:24

Yesterday gave some hope that October will offer a rebound as we had an up day on what is historically one of the worst days in the market. Here is an interesting tidbit from MarketWatch.

http://www.marketwatch.com/story/stock-market-dodges-sept-30-curse-2015-09-30 

In Monday’s Guide we gave you a checklist on what hedge fund managers are doing right now.One of the major items is trimming health care stocks. This trickle down in our world is small cap pharmaceuticals and biotechnology. The NASDAQ US Small Cap Pharmaceuticals & Biotechnology Total Return Index climbed from 1,885 at the start of the year to peaking in July 3,230 in July. Since then the index has given back over 30% to its current level of 2,247. We thought it a great time to look at one of our bigger biotech winners.

We first highlighted TG Therapeutics, Inc. (NASDAQ – TGTX - $10.08) at $5.10 in January 2014. The chart below illustrates the two year performance which illustrates that TGTX capped at $18.70 in July representing a 262% increase. Since then we have dropped down to current levels but still have nearly a 100% increase.

TGTX 2-Year Chart

(Source: www.otcmarkets.com) 

MM.10.01.15.TGTX-2yr

 

TG Therapeutics is a development stage biopharmaceutical that has some innovative products in its pipeline geared primarily toward the treatment of cancer. The Company is developing two advanced therapies targeting hematological malignancies. The TGTX-1101 (ublituximab) is a novel, third generation monoclonal antibody that targets a specific and unique epitope on the CD20 antigen found on mature B-lymphocytes, or antibody agents, which is in clinical development for patients with relapsed and refractory non-Hodgkin's lymphoma. The TGR-1202 is an orally available PI3K delta inhibitor believed to be important in the proliferation and survival of B-lymphocytes.

So what to do now? The key here is not to get greedy. At a minimum, investors should lock in some gains will some calls or puts in a conservative option strategy. The major factor in going long here is continual positive news when it comes to pipeline when it comes to clinical FDA trials. Last month the Company announced that one its Leukemia treatments with one TG-1101 (ublituximab)entering clinical trial phase 3 another one (TGR-1202 + TG-1101 + the PD-1 Checkpoint Inhibitor Pembrolizumab) entering phase 2.

TGTX is still a solid long term play. However, it may be time to trim some profits or lock in gains. Some positive signs are the Company has $92 million cash on hand as of the end of 2Q15, as well as a relatively low debt to equity ratio of 0.26. Keeping track of the pipeline development will be crucial. Based on historical results, we believe the stock can still reach $12 this year.

Have a great day!

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