On Tuesday, TD Cowen initiated coverage on shares of TG Therapeutics (NASDAQ:TGTX), assigning a Buy rating with a price target of $50.00. The firm's coverage is based on the potential of TG Therapeutics' product Briumvi, which is seen as a competitive anti-CD20 treatment for Relapsing Multiple Sclerosis (RMS). The analyst pointed out that Briumvi has the potential to rival established products in the same class, such as Ocrevus and Kesimpta, which collectively generated sales exceeding $9 billion in 2023.
The analyst expects that the company will maintain its launch momentum into the third quarter, projecting sales of $85 million, which surpasses the consensus estimate of $77 million. Additionally, they anticipate a possible increase in the company's 2024 guidance, aligning closer to their estimate of $310 million.
According to the analyst, the peak sales for Briumvi in the United States could reach approximately $3 billion. This projection is based on the current performance and market acceptance of the drug. They also indicated that there are more expansion strategies planned for Briumvi, which could further drive the drug's market performance.
The price target of $50.00 set by TD Cowen is derived from a discounted cash flow (DCF) analysis. This valuation method takes into account the present value of TG Therapeutics' projected future cash flows, suggesting a positive outlook for the company's financial future based on the anticipated success of Briumvi.
In other recent news, TG Therapeutics has reported encouraging developments. The company's flagship drug, Briumvi, showed sustained efficacy in a 5-year Multiple Sclerosis trial, with a significant reduction in relapse frequency. This data was revealed at the European Committee for Treatment and Research in Multiple Sclerosis annual meeting. The company also reported net sales of Briumvi reaching $72.6 million in the second quarter, leading to an increase in its full-year revenue guidance to between $290 million and $300 million.
On the analyst front, H.C. Wainwright reaffirmed its Buy rating for TG Therapeutics, following the presentation of positive trial data. Similarly, JPMorgan increased the price target for TG Therapeutics shares based on the company's strong fundamentals.
The company also implemented a share repurchase program, which is seen as enhancing its appeal as a biotech investment.
InvestingPro Insights
TG Therapeutics' recent performance and future prospects align well with the positive outlook presented by TD Cowen. According to InvestingPro data, the company's revenue growth has been impressive, with a staggering 1341.56% increase in the last twelve months as of Q2 2024. This growth is further emphasized by a 357.05% quarterly revenue increase in Q2 2024, supporting the analyst's expectations of strong sales momentum.
The company's gross profit margin stands at an impressive 92.76%, indicating efficient cost management and potentially strong pricing power for Briumvi. This high margin could contribute significantly to the projected peak sales of $3 billion in the U.S. market.
InvestingPro Tips highlight that TG Therapeutics is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.23. This suggests that the stock may be undervalued considering its growth prospects, aligning with TD Cowen's bullish stance.
Additionally, analysts have revised their earnings upwards for the upcoming period, further supporting the positive outlook. The company's strong return over the last year (249.86%) and the last three months (22.92%) indicate growing investor confidence in TG Therapeutics' potential.
For investors seeking more comprehensive analysis, InvestingPro offers 16 additional tips for TG Therapeutics, providing a deeper understanding of the company's financial health and market position.
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