Potential FDA Controversy Brewing For TG Therapeutics?

TG Therapeutics Inc TGTX, a small-cap biopharmaceutical company focusing on treatments for B-cell malignancies and autoimmune diseases, was initiated with a Buy rating and $23 price target by analysts at Jefferies.

Jefferies' Matthew Andrews commented in a research report on Tuesday, saying while the stock is under-valued based on the long-term prospect of its ublituximab, there are some risk factors from the U.S. Food and Drug Administration that investors should be aware of.

TG Therapeutics' Rating Justified

Related Links: Physician Views Off-Label Use A 'Double-Edged Sword' For TG Therapeutics Don't Let Offerings Blindside Your Thesis

Andrews noted that top-line ORR for a Phase 3 study (called GENUINE) of ublituximab + Imbruvica in high-risk R/R CLL are robust. However, a key debate surrounding the therapy would be if the FDA approves the therapy under an accelerated approval as the GENUINE was initially under a Special Protocol Assessment protocol but was amended without the FDA's input.

Andrews explained:

"We note FDA has approved 16 hem/onc drugs (2013-2017) based on single-arm studies with ORR/DOR as primary endpoint (GENUINE was randomized). Further, the 21st Century Cures Act gives FDA legal authority to ease/amend data requirements to speed approvals by considering 'totality of evidence' (e.g., real-world data). These factors and FDA Dr. Pazdur's history of collaboration with industry suggest a higher potential for AA (85 percent probability)."

Bottom line, the analyst acknowledges that "FDA precedent exists for accelerated approval," but the company's "promising" clinical trials highlights the company's "under-appreciated shots on goal."