TG Therapeutics (TGTX) stock price has plunged: buy the dip?

By:
on Oct 11, 2023
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  • TG Therapeutics stock has been in a strong freefall in the past few months.
  • There are concerns about Briumvi as competition is set to rise.
  • Companies like Novartis and Roche have come up with an alternative.

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TG Therapeutics (NASDAQ: TGTX) stock price sell-off continued this week as concerns about the rising competition continued. The shares plunged to a low of $7.53 on Wednesday, much lower than the year-to-date high of $35.56. 

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Roche competition worries

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TG Therapeutics started the year well after the company gained FDA-approved Briumvi, a drug that treats relapsing forms of multiple sclerosis (MS). This is an important drug handling a disease that affects thousands of people globally.

TG Therapeutics recorded sales of $16 million in Q2, the first full quarter for the drug. This figure was lower than what most analysts were expecting. Nonetheless, the company expressed hopes that the drug would see more growth in the coming quarters.

Precisely, the management hopes to capture 80% to 90% of all the prescriptions written. At the same time, the company partnered with Neuraxpharm to market the drug in Europe. As part of the deal, the company paid $140 million to TG Therapeutics, a deal that most investors believe was a bit cheap.

A key concern among TG Therapeutics investors is that Roche’s new drug known as Ocrevus would pose a threat to Briumvi. For one, Roche has deep relationships in the medical industry and has a bigger marketing budget. Novartis is also woring on another drug known as Kesimpta, which will make the industry quite saturated. 

Still, there is a likelihood that TG Therapeutic’s Briumvi will do well in the long term. For one, it needs just one hour of infusion compared to Ocrevus’s three hours. TG has also executed well, as the company’s CFO noted in the earnings call:

“Our corporate goal was to achieve 80% coverage by the end of the year. So accomplishing that by midyear far exceeds our expectations and is a testament to the attractiveness of Briumvi to payers and the strong efforts of our market access team.”

TG Therapeutics stock price forecast

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TGTX stock

The daily chart shows that the TGTX stock price has been in a strong bearish trend in the past few months. It made a deeper dive when it published weaker-than-expected results. It has failed to rebound as the Briumvi momentum faded. 

The stock remains below all moving averages while the Relative Strength Index (RSI) has moved to the oversold level. At this stage, I believe that the risk/reward is quite attractive since competition fears are a bit overblown. 

Therefore, there is a likelihood that it will rebound after publishing its earnings on November 1st. Analysts expect that its sales rose to $66 million. If this happens, the stock will likely retest the key resistance at $13.35, the lowest level on March 10th.

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