Russell Reconstitution to Reap Rewards for TG Therapeutics

In Monday’s Goldman Guide we alluded to the Russell 2000 annual reconstitution occurring this month. The new stocks that make the list are great potential buys as the universe of mutual funds and ETF have to be updated to track the index. We will look again at our healthcare and biotech small cap sector.

TG Therapeutics, Inc. (NASDAQ – TGTX - $6.69) first appeared in the Market Monitor at $5.10 and climbed to $18.70 in July of 2015 before what is now a precipitous decline to the current level. Below is the one-year chart that illustrates this drop in price level. However, we are still up 31% since our initial highlight of the stock.

TGTX 1-Year Chart

(Source: www.otcmarkets.com)

TG Therapeutics is a biopharmaceutical company focused on the acquisition, development and commercialization of novel treatments for B-cell malignancies and autoimmune diseases. Currently, the Company is developing two therapies targeting hematological malignancies and autoimmune diseases. TG-1101 (ublituximab) is a novel, glycoengineered monoclonal antibody that targets a specific and unique epitope on the CD20 antigen found on mature B-lymphocytes. TG Therapeutics is also developing TGR-1202, an orally available PI3K delta inhibitor. The delta isoform of PI3K is strongly expressed in cells of hematopoietic origin and is believed to be important in the proliferation and survival of B‐lymphocytes. Both TG-1101 and TGR-1202 are in clinical development for patients with hematologic malignancies, with TG-1101 recently entering clinical development for autoimmune disorders. The Company also has pre-clinical programs to develop IRAK4 inhibitors, BET inhibitors, and anti-PD-L1 and anti-GITR antibodies.

 

Obviously, making the Russell 2000 list is the major reason to either hold on to or buy in to TGTX right now. Additionally, the Company is establishing a solid track record on deal flow and pipeline progress. Two weeks ago the Company announced data from the TGR-1202 at the Phase 3 dose of 800 mg plus full dose ibrutinib appears safe, well-tolerated and produced high response rates, especially in patients with advanced CLL (Chronic Lymphocytic Leukemia), including one complete response, a depth of response not generally observed with either agent alone. Last month the Company announced, as part of a broader agreement with Jubilant Biosys, an Indian biotech company, it struck a sub-license deal with Checkpoint Therapeutics, Inc. to develop and commercialize Jubilant's novel BET inhibitor program in the field of hematological malignancies. TG Therapeutics indicated that Checkpoint would develop, as well as commercialize these small molecule inhibitors in solid tumors. The Company added that the BET inhibitor program was the subject of an exclusive, worldwide license agreement. As a result, Checkpoint in-licensed from Jubilant a family of patents covered compounds that inhibit BRD4, a member of the BET (Bromodomain and Extra Terminal) domain for cancer treatment.

The Company is managing debt and cash levels efficiently. As of the end of Q1 2016 TG Therapeutics had $58.7 million cash on hand versus only $153,000 of debt. We think TGTX rises on news ‘pops’ and Russell 2000 buying to the $10 level by the end of 2016.

Have a great day!

Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.

ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com