suntrust $tgtx We Expect Approval for TG-1101
Based on Positive GENUINE Data
What's Incremental To Our View
Today, TGTX announced highly positive GENUINE top-line data for the
TG-1101+ibrutinib doublet in high-risk r/r CLL. Based on these data (80%
ORR for the combo vs. 47% for ibrutinib alone), we expect an accelerated
approval by YE18, following a pre-BLA meeting with the FDA in 2H17 and a
BLA submission in 1H18. Full data from the trial will be presented at a medical
conference in June. If approved, we expect the combo will be used in 2L highrisk
CLL, with peak sales of at least $250MM in this indication. We reiterate our
Buy rating and raise our NPV-derived price target to $26 from $19.
We Expect Approval for TG-1101 on Positive GENUINE Readout... With
the TG-1101+ibrutinib combo showing ~30% absolute improvement in ORR
vs. ibrutinib monotherapy in high-risk r/r CLL (80% ORR for the combo vs.
47% for ibrutinib alone; p<0.001, median follow-up of 12 months) and favorable
trends in favor of the combo in a number of secondary endpoints (radiographic
CR, PFS, and time to response), we view GENUINE data as highly positive,
warranting an accelerated approval. We expect a BLA submission in 1H18
(likely late 1Q18/early 2Q18), following a pre-BLA meeting with the FDA in
2H17. Full data from the trial are expected to be presented at a medical
conference in June.
...Supported by Precedents from Other Approved Agents in CLL. While
some investors have inquired about TG-1101's approvability (even with
positive results) due to GENUINE's amendment midway (no SPA; smaller
sample size), we note that Imbruvica (ibrutinib), Venclexta (venetoclax), and
Zydelig (idelalisib) were all approved based on an ORR endpoint from singlearm
studies; therefore, we believe positive GENUINE data based on wellunderstood
mechanisms of action (MOA; anti-CD20+BTK) and sufficiently
large safety database provide a clear pathway for accelerated approval, while
full approval needs to await confirmatory results from TG-1101+TGR-1202's
UNITY-CLL study, likely in late 2018.
Unconfirmed Responses Unlikely to Have Impact on the Outcome. As
of the data cutoff, the company has included responses for patients that are
awaiting confirmation visits in the ORR analysis (9 in the combo arm and 5 in
the ibrutinib alone arm). Based on our calculations, at least 7 of 9 unconfirmed
responses in the TG-1101+ibrutinib arm would have to fail to achieve confirmed
responses for the absolute difference in ORR to fall below 20%. We believe
that this is highly unlikely as (1) so far only 1 (3%) of 39 patients on the
TG-1101+ibrutinib arm failed to have a confirmed response at the confirmation
visit and (2) as once a CLL patient responds, they usually remain under control.
Therefore, we believe these results will hold up and expect updated GENUINE
data in June to maintain an absolute difference in ORR of at least 20%.

Post-hoc Analyses Also Suggest Maintenance Of Robust Responses. Management's post-hoc
sensitivity analysis (which looked at patients enrolled in the first half - 1st 12 months vs. patients
enrolled in the second half - 2nd 12 months of the trial) showed that for patients on study for at least
12 months, the delta in ORR of TG-1101+ibrutinib vs. ibrutinib actually “widened” over time, which the
physician on the call believed was due to “some synergistic effect” between TG-1101 and ibrutinib
in this high-risk CLL patient population. The physician also noted that though there may be a small
increase in responses for ibrutinib-treated patients over time (an issue that has also been brought up
by several investors), he believes that the combo's impressive response rates are beyond what any
agent like ibrutinib as a monotherapy will be able to make up over time.
TG-1101+Ibrutinib Likely to be Used in 2L, in Front of Venetoclax. From the call, the KOL suggested
that the TG-1101+ibrutinib doublet regimen is likely to be used in the 2L setting, before Venetoclax,
for several reasons: (1) better tolerability and delivery vs. venetoclax (associated with tumor lysis
syndrome; blood monitoring) and (2) venetoclax can rescue ibrutinib-treated patients, but not viceversa.
We would expect initial uptake to be based on the label (high-risk r/r CLL patients with 17p
deletion, 11q deletion or p53 mutation), though other patients with extremely symptomatic (e.g.,
significant lymph nodes, hepatomegaly, splenomegaly) disease might also be good candidates for offlabel
use. The KOL also believes TG-1101 to be a highly differentiated CD20 antibody as the drug
appears to show benefit in patients who have been previously exposed to and/or are refractory to
rituximab. If approved, we expect initial pricing for the drug to be in-line with other CD20 antibodies,
though the company has suggested potential discounts/package pricing once the UNITY program
(TG-1101 + TGR-1202) is complete.
TG-1101+Ibrutinib Combo Could Generate At Least $250MM In Peak Sales. In the U.S., ~19K new
cases of CLL are diagnosed each year, and we estimate an addressable market of ~4,300 high-risk r/
r CLL patients in the U.S. and a similar number in OUS territories. Based on a ~$44K annual price for
TG-1101 (similar to Gazyva’s ~$44K), we expect peak sales of at least $250MM.
Model Updates. We have updated our model and increased our probability of success for TG-1101 in
the high-risk r/r CLL setting to 100% vs. 50% previously. Our NPV-derived PT goes to $26 (from $19).

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