TG Therapeutics Misses EPS but Beats Revenue: Navigating the Mixed Signals
4min read TG Therapeutics (NASDAQ: TGTX) delivered a quarter of contrasting outcomes, reporting a GAAP EPS of $0.03, which fell $0.14 short of analysts’ expectations, while revenue surged to $120.86 million, surpassing estimates by $3 million. This mixed performance underscores the company’s dual challenges and opportunities as it balances rapid growth in its lead MS treatment, BRIUMVI, with rising operational costs. Below, we dissect the results, market reaction, and what lies ahead for investors.
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The EPS Miss: Cost Pressures Take Center Stage
TG’s EPS shortfall to $0.03 from an expected $0.17 stems largely from elevated expenses, including a 46% year-over-year increase in R&D spending to $46.4 million and a 45% rise in SG&A costs to $50.3 million. These outlays reflect investments in expanding BRIUMVI’s commercialization (now available in 12 European markets) and advancing its pipeline, such as the subcutaneous formulation of ublituximab and the CD19 CAR T therapy, azer-cel. While these moves are critical for long-term growth, they strained near-term profitability.
Revenue Strength: BRIUMVI’s Dominance
The $120.86 million in revenue reflects a 86% year-over-year jump, driven by BRIUMVI’s momentum. U.S. sales alone hit $119.7 million, a 137% increase from Q1 2024, as the drug captures share in the relapsing multiple sclerosis (RMS) market. The FDA’s recent approval of BRIUMVI for RMS, coupled with its five-year trial data showing 92% of patients remained free of disability progression, has positioned it as a top-tier therapy. This outperformance has prompted TG to raise its full-year revenue guidance to $575 million, up from $540 million, signaling confidence in BRIUMVI’s trajectory.
Market Reaction: Stocks Dip Amid EPS Concerns
Despite the revenue beat, TG’s shares fell 4.5% post-earnings, closing at $43.31 on May 5, 2025. The dip reflects investor skepticism about the company’s ability to manage costs and sustain EPS growth.
The Bigger Picture: Pipeline Progress and Risks
TG’s long-term success hinges on its pipeline. Key milestones include:
- Subcutaneous BRIUMVI: Phase 1 trials for RMS are ongoing, with plans to initiate a pivotal program using data from the ENHANCE trial, which demonstrated a 30-minute infusion time—a patient-friendly improvement.
- Azer-cel: A Phase 1 trial for primary progressive MS (PPMS) is enrolling, targeting a $1.8 billion market.
- Global Expansion: BRIUMVI’s rollout in the EU and U.K. via partner Neuraxpharm could unlock additional revenue streams.
However, risks loom large. TG remains heavily reliant on BRIUMVI, which accounts for nearly all revenue, leaving it vulnerable to pricing pressure or competition. Additionally, manufacturing delays or safety issues (e.g., BRIUMVI’s 48% infusion reaction rate) could disrupt growth.
Valuation and Analyst Outlook
TG’s current valuation reflects this tension. While GuruFocus’s GF Value model sees a 486% upside to $263.99, based on high growth expectations, consensus estimates are more muted. The average price target of $42.57 implies a 5.4% downside from its May 5 closing price. Investors must weigh near-term EPS volatility against BRIUMVI’s $575 million annual sales potential and pipeline catalysts.
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Conclusion: A High-Reward, High-Risk Play
TG Therapeutics’ Q1 results paint a company in transition: one with momentum in top-line growth but struggling to convert that into bottom-line profits. The revenue beat and raised guidance suggest BRIUMVI’s commercial success is on track, but the EPS miss highlights execution challenges. For investors, the stock is a high-risk, high-reward bet on TG’s ability to:
1. Control costs: Reduce SG&A and R&D inflation without sacrificing pipeline progress.
2. Diversify revenue: Expand BRIUMVI into new markets and indications, while advancing azer-cel for PPMS.
3. Manage competition: Defend its MS market share against rivals like Roche’s Ocrevus.
With $276 million in cash and a $575 million revenue target within reach, TG has the resources to navigate these hurdles. However, sustained EPS growth will be critical to quietening skeptics. For now, the stock’s 4.5% post-earnings drop signals that investors demand clearer profit visibility—but the long-term picture, anchored in BRIUMVI’s dominance and pipeline potential, remains compelling.
In short, TG’s story is far from over. Investors must decide whether the promise of a $575 million revenue year—and beyond—is worth the short-term turbulence.
