TG Therapeutics (NASDAQ: TGTX) saw its shares tumble 9.8% to $46.94 in early trading on Monday, as investors weighed a strong revenue performance against a significant earnings miss and escalating operating expenses. The iShares Nasdaq Biotechnology ETF (NASDAQ: IBB) slipped 0.2% in sympathy.
The company reported second-quarter revenue of $240.3 million, a 70% increase year-over-year, comfortably beating the analyst consensus of $229.7 million. However, operating income fell 38% to $21.7 million, and diluted earnings per share came in at just $0.05, a 70% decline from $0.17 a year earlier and far below the $0.31 expected by analysts. The shortfall was largely attributed to a surge in research and development (R&D) spending, which nearly tripled, and a 48% jump in selling, general, and administrative (SG&A) costs.
Evercore ISI analyst Michael DiFiore noted that analysts were "underestimating operating expenses." The company's total costs and expenses increased by $112.4 million to $218.7 million, while revenue grew by $99.2 million, meaning each additional dollar of revenue came at a cost of $1.13. As a result, operating margin contracted sharply to 9.0% from 24.7%.
Management, however, cautioned that reported profit was distorted by manufacturing-related charges. Chief Executive Michael Weiss said, "BRIUMVI is enabling us to build something much bigger." Finance chief Sean Power noted that net income would have been approximately $62 million without these charges, highlighting the company's "underlying earnings power."
Looking ahead, TG Therapeutics raised its full-year 2026 global revenue guidance to approximately $950 million from $925 million, with U.S. BRIUMVI sales now projected at $890–$905 million. However, the company also increased its base R&D and SG&A spending guidance to $350–$400 million, up from about $350 million. This means the midpoint of spending guidance increased by $25 million, matching the revenue increase, which some analysts view as a neutral to slightly negative trade-off.
U.S. BRIUMVI sales of $227.7 million in the second quarter represented a 64% year-over-year increase, and first-half sales totaled $422.5 million. To meet the updated full-year guidance, second-half sales need to be $467.5–$482.5 million, or $233.8–$241.3 million per quarter, which is just 3% to 6% above the second-quarter level. Management expects fourth-quarter sales to exceed $250 million, implying a stronger end to the year.
The company also provided updates on its subcutaneous formulation of BRIUMVI. Phase 1 data showed mean bioavailability above 60%, and management indicated that quarterly dosing is feasible. Enrollment for the Phase 3 trial is complete, with top-line results expected in late 2026 or early 2027.
Risks to the stock include core operating costs potentially reaching $400 million, which would exceed the May target by $50 million, and any delays or negative outcomes in the Phase 3 trial. Additionally, BRIUMVI remains TG's only commercialized product, so any demand shortfall would directly impact total revenue.
The market's reaction suggests that while revenue growth is encouraging, investors are focused on the sustainability of margins and the trajectory of expenses. With the stock trading at a significant discount to its recent highs, the coming quarters will be critical in determining whether TG can translate its top-line momentum into bottom-line profitability.
