PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, detailing significant asset growth, increased net losses, and improved equity from financing activities [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows substantial asset growth to $294.6 million, driven by increased cash, alongside decreased liabilities and significantly improved stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $260,512 | $112,637 | | Total current assets | $280,938 | $149,151 | | Total assets | $294,621 | $163,014 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $67,537 | $84,449 | | Total liabilities | $100,394 | $124,399 | | Total stockholders' equity | $194,227 | $38,615 | | Total liabilities and stockholders' equity | $294,621 | $163,014 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported increased net losses for Q2 and H1 2020, primarily driven by higher research and development and general and administrative expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | License Revenue | $38 | $38 | $76 | $76 | | Total R&D Expense | $36,449 | $32,866 | $72,471 | $65,251 | | Total G&A Expense | $14,434 | $2,716 | $28,695 | $5,057 | | Operating Loss | $(50,845) | $(35,544) | $(101,090) | $(70,232) | | Net Loss | $(52,884) | $(36,213) | $(104,000) | $(71,368) | | Net Loss per Share | $(0.47) | $(0.42) | $(0.95) | $(0.85) | [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity significantly increased to $194.2 million by June 30, 2020, primarily due to substantial capital raises from public and at-the-market offerings - The company significantly strengthened its equity position through capital raises, including a public offering that netted approximately **$165.0 million** and at-the-market offerings that netted **$76.0 million** during the first six months of 2020[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash usage increased, but substantial financing activities led to a net cash increase of $147.9 million, boosting total cash to $261.8 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(105,949) | $(69,211) | | Net cash provided by (used in) investing activities | $12,655 | $(678) | | Net cash provided by financing activities | $241,173 | $85,164 | | **Net increase in cash** | **$147,879** | **$15,275** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's biopharmaceutical focus, significant accumulated deficit, reliance on financing, and belief in sufficient liquidity for over twelve months - The company is a biopharmaceutical firm focused on B-cell mediated diseases, with lead drug candidates ublituximab and umbralisib in pivotal trials for CLL, NHL, and MS[26](index=26&type=chunk) - As of June 30, 2020, the company had an accumulated deficit of approximately **$805.2 million** and expects to incur operating losses for the foreseeable future[30](index=30&type=chunk) - The company believes its cash, cash equivalents, and investment securities of **$275.6 million** as of June 30, 2020, are sufficient to fund operations for more than twelve months[32](index=32&type=chunk) - In February 2019, the company entered into a term loan facility of up to **$60.0 million** with Hercules Capital, drawing an initial **$30.0 million**, secured by substantially all company assets excluding intellectual property[95](index=95&type=chunk)[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses clinical trial progress, increased R&D and G&A expenses, and strengthened liquidity from recent equity financings, providing over a year of capital - The UNITY-CLL Phase 3 trial met its primary endpoint of Progression-Free Survival (PFS) at a prespecified interim analysis and was stopped early for superior efficacy[138](index=138&type=chunk) - In June 2020, the company completed the rolling submission of a New Drug Application (NDA) to the FDA for umbralisib for the treatment of both marginal zone lymphoma (MZL) and follicular lymphoma (FL)[133](index=133&type=chunk) Comparison of Operating Expenses (in millions) | Expense Category | H1 2020 | H1 2019 | Change | | :--- | :--- | :--- | :--- | | Other Research and Development | $68.9 | $62.3 | +$6.6 | | Other General and Administrative | $13.8 | $4.3 | +$9.5 | - As of June 30, 2020, the company had **$275.6 million** in cash, cash equivalents, and investment securities, which is expected to provide sufficient liquidity for more than twelve months[160](index=160&type=chunk) - Net cash provided by financing activities was **$241.2 million** for the first six months of 2020, primarily from an underwritten public offering and at-the-market (ATM) program sales[163](index=163&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuation, impacting the fair value of investments, with an objective to preserve principal and minimize risk - The company's main market risk is interest rate fluctuation, which can impact the fair value of its portfolio of cash equivalents and investments[181](index=181&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2020, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[182](index=182&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, such controls[183](index=183&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201%20Legal%20Proceedings) The company and its subsidiaries are not currently involved in any material pending legal proceedings - The company and its subsidiaries are not a party to any material pending legal proceedings[185](index=185&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A%20Risk%20Factors) This section outlines significant risks including the COVID-19 pandemic's impact, financial position, drug development uncertainty, competition, third-party reliance, and intellectual property concerns [Risks Related to the COVID-19 Pandemic](index=51&type=section&id=Risks%20Related%20to%20the%20COVID-19%20Pandemic) The COVID-19 pandemic poses significant risks to clinical trials, global supply chains, and potential commercialization efforts - The COVID-19 pandemic could delay or compromise clinical trials, disrupt supply chains, and adversely impact regulatory review and commercialization efforts[189](index=189&type=chunk) - The company's supply chain is at risk as umbralisib is manufactured in India, ublituximab in South Korea, and TG-1701 in China, all regions impacted by the pandemic[204](index=204&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=57&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) The company faces risks from its limited operating history, accumulated deficit of $805.2 million, and ongoing need for substantial additional capital - The company has incurred significant operating losses since inception, with an accumulated deficit of **$805.2 million** as of June 30, 2020[214](index=214&type=chunk) - Substantial additional funding is required to continue operations; if unable to raise capital, the company may be forced to delay, reduce, or eliminate drug development or commercialization efforts[217](index=217&type=chunk) [Risks Related to Drug Development and Regulatory Approval](index=65&type=section&id=Risks%20Related%20to%20Drug%20Development%20and%20Regulatory%20Approval) Drug development faces high risks including unreplicable early trial results, significant delays, trial failures, and uncertain regulatory approval even with SPA - The outcome of early clinical trials is not predictive of later-stage trial results, and drug candidates may fail to demonstrate sufficient safety or efficacy in pivotal studies[234](index=234&type=chunk) - Drug candidates may cause undesirable side effects that could delay or prevent regulatory approval, or result in a restrictive label[255](index=255&type=chunk) - Even with a Special Protocol Assessment (SPA) from the FDA for the UNITY-CLL and ULTIMATE trials, there is no guarantee of regulatory approval[246](index=246&type=chunk) [Risks Related to Commercialization](index=84&type=section&id=Risks%20Related%20to%20Commercialization) Commercialization risks include intense competition, market size uncertainty, unfavorable pricing, and the costly, potentially premature, build-out of sales infrastructure - The company faces substantial competition from numerous sources, including large pharmaceutical companies with greater financial and marketing resources[282](index=282&type=chunk) - The company is building its own sales and marketing infrastructure, which is expensive and time-consuming and could be a lost investment if product approval is delayed or denied[310](index=310&type=chunk)[311](index=311&type=chunk) - Future business operations will be subject to complex healthcare laws (e.g., Anti-Kickback Statute, False Claims Act), with non-compliance leading to significant penalties[313](index=313&type=chunk) [Risks Related to Our Dependence on Third Parties](index=101&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Heavy reliance on third-party CROs and CMOs for clinical trials and manufacturing poses risks to performance, compliance, and supply, alongside potential licensor disputes - The company relies on CROs to conduct clinical trials, and if these third parties do not perform as required, trials could be delayed, extended, or terminated[324](index=324&type=chunk) - The company does not own manufacturing facilities and depends on third-party CMOs, increasing the risk of insufficient supply, quality issues, or regulatory compliance failures[329](index=329&type=chunk) - As product candidates are in-licensed, any dispute with or non-performance by licensors regarding intellectual property or other obligations could adversely affect development and commercialization[339](index=339&type=chunk) [Risks Relating to Our Intellectual Property](index=110&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property) Success depends on obtaining and defending intellectual property, facing risks of patent invalidation, insufficient breadth, and costly infringement litigation - Commercial success depends on obtaining and maintaining patent and trade secret protection for its product candidates, which is an uncertain process[350](index=350&type=chunk) - The company may be sued for infringing the intellectual property rights of third parties, which could be costly and time-consuming and could halt the commercialization of its products[370](index=370&type=chunk)[373](index=373&type=chunk) - The company relies on trade secrets and confidentiality agreements, which may be breached or may not provide adequate protection, potentially harming its competitive position[383](index=383&type=chunk) [Item 6. Exhibits](index=132&type=section&id=Item%206%20Exhibits) This section lists exhibits filed with the quarterly report, including an incentive plan amendment and Sarbanes-Oxley Act certifications - The exhibits filed with this report include certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002[416](index=416&type=chunk)

TG Therapeutics Inc. (NASDAQ:TGTX) Q2 2020 Earnings Conference Call August 10, 2020 8:30 AM ET Company Participants Michael Weiss - Executive Chairman, President, Chief Executive Officer Sean Power - Chief Financial Officer Jenna Bosco - Senior Vice President, Corporate Communications Conference Call Participants Josh Schimmer - Evercore ISI Ed White - HC Wainwright Matt Kaplan - Ladenburg Roger Song - Jefferies Operator Hello and welcome to the TG Therapeutics second quarter 2020 earnings conference call. ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-32639 TG THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 36-3898269 (State or other ju ...

TG Therapeutics, Inc. (NASDAQ:TGTX) Q4 2019 Results Earnings Conference Call March 3, 2020 8:00 AM ET Company Participants Jenna Bosco - VP, IR & Senior VP of Corporate Communications Sean Power - CFO, Corporate Secretary & Treasurer Michael Weiss - Executive Chairman, CEO & President Conference Call Participants Alethia Young - Cantor Fitzgerald Matt Kaplan - Ladenburg Thalmann Ed White - H.C. Wainwright & Company Chris Howerton - Jefferies Mayank Mamtani - B. Riley FBR Operator Greetings, and welcome to t ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________. Commission File Number 1-32639 TG THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 36-3898269 (Stat ...

TG THERAPEUTICS INVESTOR & ANALYST FIRESIDE CHAT EVENT TG Therapeutics ASH 2019 Investor & Analyst Event | --- | --- | --- | |-------|---------------------------------------------------|-------| | | | | | | PARTICIPANTS | | | • | Paul Barr, MD, University of Rochester | | | • | Javier Pinilla, MD, Moffitt Cancer Center | | | • | Pier Luigi Zinzani, MD, University of Bologna | | | • | Brian Koffman, MD, CLL Society | | | | | | | | Moderators | | | • | Alethia Young – Cantor Biotech Analyst | | | • | Michael ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-30929 ___________________________________________ TG THERAPEUTICS, INC. (Exact name of regist ...

TG Therapeutics, Inc. (NASDAQ:TGTX) Q3 2019 Earnings Conference Call November 12, 2019 8:30 AM ET Company Participants Jenna Bosco - VP, IR & SVP, Corporate Communications Sean Power - CFO, Corporate Secretary & Treasurer Michael Weiss - Executive Chairman, CEO & President Conference Call Participants Matthew Kaplan - Ladenburg Thalmann & Co. Edward White - H.C. Wainwright & Co. Christopher Howerton - Jefferies Operator Greetings. Welcome to TG Therapeutics' Third Quarter 2019 Financial Results and Business ...

Pipeline and Regulatory Strategy - TG Therapeutics is developing medicines for B-cell diseases, including Chronic Lymphocytic Leukemia (CLL), Marginal Zone Lymphoma (MZL), and Multiple Sclerosis (MS)[4,6] - The company plans to commence a rolling submission for Umbralisib in MZL around YE2019, following discussions with the FDA and a successful trial exceeding the target 40% ORR[11,22] - A regulatory submission for Umbralisib in CLL (in combination with Ublituximab) is planned for 1H2020[11] - Ublituximab's regulatory submission for CLL (in combination with umbralisib) is also planned for 1H2020, with a submission for Multiple Sclerosis expected by YE2020[11,27] Umbralisib Highlights - Umbralisib is presented as a next-generation PI3K delta inhibitor with the potential to overcome toxicities associated with first-generation PI3K-delta inhibitors, which have shown serious side effects in 16%-48% of patients[11,12] - In MZL patients, Umbralisib demonstrated an approximate 50% ORR and was deemed well-tolerated[25] - Umbralisib monotherapy showed an 85% ORR at higher doses in early clinical data for CLL[30] Ublituximab Highlights - Ublituximab is described as a next-generation anti-CD20 monoclonal antibody with enhanced potency and shorter infusion times (1-1.5 hours) compared to other anti-CD20s (3-4 hours)[28] - In a Phase 2 trial for MS, Ublituximab demonstrated a 100% reduction in T1 Gd enhancing lesions at Week 24 and Week 48 (p=0.003)[56] Market Opportunity - The global CLL market is estimated to reach over $10 billion by 2025[35] - The global MS market is estimated to be greater than $30 billion by 2025, with Ocrelizumab having over $2 billion in 2018 annual sales[61] Financial Status - As of 9/30/2019, TG Therapeutics' stock price was $5.61[68] - As of 8/2/2019, the company had approximately 94.8 million fully diluted shares[68] - As of 6/30/19, the company had approximately $97 million in cash[68]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The company presents its unaudited condensed consolidated financial statements for the period ending June 30, 2019 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows increased total assets driven by cash and new debt, alongside a growing accumulated deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $57,228 | $41,958 | | Total current assets | $94,441 | $79,031 | | Total assets | $106,585 | $83,616 | | **Liabilities & Equity** | | | | Total current liabilities | $55,967 | $38,854 | | Long-term debt | $28,513 | $— | | Total liabilities | $93,380 | $59,580 | | Accumulated deficit | ($599,713) | ($528,345) | | Total stockholders' equity | $13,205 | $24,036 | - The company's total assets increased to **$106.6 million** from $83.6 million, primarily driven by an increase in cash and the addition of long-term debt, while the accumulated deficit grew to **$599.7 million**[18](index=18&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations indicates a reduced net loss compared to the prior year, driven by lower operating expenses Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2019 | Q2 2018 | 6 Months 2019 | 6 Months 2018 | | :--- | :--- | :--- | :--- | :--- | | License revenue | $38 | $38 | $76 | $76 | | Total research and development | $32,866 | $38,700 | $65,251 | $73,718 | | Total general and administrative | $2,716 | $5,683 | $5,057 | $12,280 | | Operating loss | ($35,544) | ($44,345) | ($70,232) | ($85,922) | | Net loss | ($36,213) | ($44,142) | ($71,368) | ($85,671) | | Basic and diluted net loss per share | ($0.42) | ($0.59) | ($0.85) | ($1.18) | - Net loss for the second quarter of 2019 was **$36.2 million**, a decrease from $44.1 million in the same period of 2018, primarily due to lower research and development expenses and decreased noncash compensation[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements show significant cash used in operations, offset by cash provided by financing activities Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | ($69,211) | ($62,226) | | Net cash (used in) provided by investing activities | ($678) | $7,377 | | Net cash provided by financing activities | $85,164 | $104,453 | | **Net increase in cash** | **$15,275** | **$49,604** | - For the first six months of 2019, the company used **$69.2 million** in cash for operations, while financing activities provided **$85.2 million** from stock sales and debt proceeds[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's focus on B-cell mediated diseases, its financial condition, and key contractual agreements - The company is a biopharmaceutical firm focused on B-cell mediated diseases, with lead candidates ublituximab and umbralisib in pivotal trials for CLL, NHL, and MS[30](index=30&type=chunk) - As of June 30, 2019, the company had an accumulated deficit of approximately **$599.7 million** and believes its cash will fund operations into the fourth quarter of 2020[34](index=34&type=chunk)[36](index=36&type=chunk) - In February 2019, the company entered into a term loan facility of up to **$60.0 million** with Hercules Capital, Inc, drawing an initial $30.0 million[98](index=98&type=chunk) - The company has an agreement with a contract manufacturer to defer payment of approximately **$20.7 million** in costs, included in current liabilities[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial results, clinical development progress, liquidity, and contractual obligations [Overview and Products Under Development](index=33&type=section&id=Overview%20and%20Products%20Under%20Development) The company is developing medicines for B-cell mediated diseases, with several candidates in late-stage clinical trials - TG Therapeutics is a biopharmaceutical company focused on developing medicines for B-cell mediated diseases like Chronic Lymphocytic Leukemia (CLL), non-Hodgkin Lymphoma (NHL), and Multiple Sclerosis (MS)[124](index=124&type=chunk) Advanced Drug Candidate Pipeline | Clinical Drug Candidate | Initial Target Disease | Stage of Development | | :--- | :--- | :--- | | Ublituximab (TG-1101) | Chronic Lymphocytic Leukemia | Phase 3 (UNITY-CLL) | | | Relapsing Multiple Sclerosis | Phase 3 (ULTIMATE I & II) | | Umbralisib (TGR-1202) | Chronic Lymphocytic Leukemia | Phase 3 (UNITY-CLL) | | | Marginal Zone Lymphoma | Phase 2b (UNITY-NHL) | | | Follicular Lymphoma | Phase 2b (UNITY-NHL) | | TG-1501 (anti-PDL1) | B-cell Cancers | Phase 1 | | TG-1701 (BTK inhibitor) | B-cell Cancers | Phase 1 | | TG-1801 (anti-CD47/CD19) | B-cell Cancers | Phase 1 | - The UNITY-NHL trial's Marginal Zone Lymphoma (MZL) cohort met its primary endpoint, with an anticipated **New Drug Application (NDA) submission** by year-end 2019[127](index=127&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Operating results show a decrease in R&D expenses due to clinical program enrollment completion and an increase in interest expense from new debt Comparison of Operating Results (in millions) | Expense Category | Q2 2019 | Q2 2018 | Change | | :--- | :--- | :--- | :--- | | Other R&D Expenses | $31.4 | $34.8 | ($3.4) | | Noncash Compensation (G&A) | $0.4 | $3.4 | ($3.0) | | Interest Expense | $1.1 | $0.2 | $0.9 | - The decrease in R&D expenses for Q2 2019 was mainly due to the **completion of enrollment** in primary clinical programs during 2018[140](index=140&type=chunk) - The increase in interest expense was primarily due to the **Hercules financing agreement** executed in February 2019[143](index=143&type=chunk)[152](index=152&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by cash reserves and recent financing, deemed sufficient to fund operations into late 2020 - As of June 30, 2019, the company had approximately **$85.0 million** in cash, cash equivalents, and investment securities[155](index=155&type=chunk) - Management believes that current cash, combined with capital raised in Q3 2019, is sufficient to fund planned operations into the **fourth quarter of 2020**[155](index=155&type=chunk) - Cash used in operating activities increased to **$69.2 million** for the first six months of 2019 from $62.2 million in the prior year period[156](index=156&type=chunk) - Net cash provided by financing activities in the first six months of 2019 was **$85.2 million**, from debt financing and proceeds from common stock issuance[158](index=158&type=chunk) [Contractual Obligations and Commitments](index=40&type=section&id=Contractual%20Obligations%20and%20Commitments) The company's primary contractual obligations consist of long-term debt, deferred manufacturing costs, and operating leases Contractual Obligations as of June 30, 2019 (in thousands) | Obligation | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Long-term debt | $30,000 | $— | $30,000 | $— | $— | | Contract manufacturer | $20,738 | $20,738 | $— | $— | $— | | Operating leases | $16,410 | $1,363 | $2,707 | $2,682 | $9,658 | | **Total** | **$67,148** | **$22,101** | **$32,707** | **$2,682** | **$9,658** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure from interest rate fluctuations on its short-term investments is considered immaterial - The company's investment portfolio consists of cash equivalents and short-term government and investment-grade corporate debt[176](index=176&type=chunk) - Due to the short-term basis of its investments, the company believes there is **no material exposure** to interest rate risk or credit risk[176](index=176&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal controls - An evaluation of disclosure controls and procedures, supervised by the CEO and CFO, concluded that they were **effective** as of June 30, 2019[177](index=177&type=chunk)[178](index=178&type=chunk) - No changes occurred in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[179](index=179&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company and its subsidiaries are not currently party to any material pending legal proceedings - As of the filing date, the company is not a party to, and its property is not the subject of, any **material pending legal proceedings**[181](index=181&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its financial position, debt, drug development, commercialization, and third-party dependencies [Risks Related to Our Financial Position and Need for Additional Capital](index=44&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) The company's history of significant losses and lack of revenue necessitate substantial future funding to sustain operations - The company has a limited operating history, has never generated revenue from drug sales, and has an **accumulated deficit of $599.7 million** as of June 30, 2019[183](index=183&type=chunk)[186](index=186&type=chunk) - **Substantial additional funding** will be required to continue operations, and failure to raise capital may force the company to delay or eliminate programs[190](index=190&type=chunk) [Risks Related to our Indebtedness](index=48&type=section&id=Risks%20Related%20to%20our%20Indebtedness) Debt obligations under a loan agreement are secured by company assets and carry risks of default and collateral seizure - The company has up to **$60.0 million** in debt obligations under a Loan Agreement with Hercules Capital, secured by substantially all company assets[197](index=197&type=chunk)[198](index=198&type=chunk) - Failure to satisfy debt obligations or breaching covenants could result in an **event of default**, allowing the lender to accelerate all amounts due[199](index=199&type=chunk) [Risks Related to Drug Development and Regulatory Approval](index=49&type=section&id=Risks%20Related%20to%20Drug%20Development%20and%20Regulatory%20Approval) Business success is highly dependent on completing pivotal trials and navigating the lengthy and uncertain regulatory approval process - The success of the business heavily depends on the **successful completion of pivotal trials** and obtaining regulatory approval, which is a lengthy and uncertain process[200](index=200&type=chunk)[211](index=211&type=chunk) - Early positive clinical trial results are **not predictive of future success** in larger, later-stage trials[203](index=203&type=chunk)[207](index=207&type=chunk) - A Breakthrough Therapy Designation for umbralisib in MZL **does not guarantee** a faster review or ultimate approval by the FDA[234](index=234&type=chunk) [Risks Related to Commercialization](index=60&type=section&id=Risks%20Related%20to%20Commercialization) The company faces substantial competition, market acceptance hurdles, and the need to build a commercial infrastructure - The company faces **substantial competition** from established therapies and large pharmaceutical companies with greater resources[245](index=245&type=chunk)[247](index=247&type=chunk) - Successful commercialization depends on gaining market acceptance and securing **favorable pricing and reimbursement**, which is uncertain[252](index=252&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) - The company currently **lacks a sales and marketing infrastructure** and must invest significantly to build a commercial organization[279](index=279&type=chunk)[280](index=280&type=chunk) [Risks Related to Our Dependence on Third Parties](index=72&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Reliance on third-party CROs and single-source manufacturers for clinical trials and drug supply creates significant operational risks - The company relies on third-party **Contract Research Organizations (CROs)** to conduct clinical trials, and their poor performance could cause delays[294](index=294&type=chunk) - The company depends on third-party **contract manufacturers** for its drug supply, where any disruption could impair development efforts[298](index=298&type=chunk)[299](index=299&type=chunk) - Active pharmaceutical ingredients (API) and drug products are sourced from **single-source suppliers**, creating a significant risk of supply interruption[307](index=307&type=chunk)[308](index=308&type=chunk) [Risks Relating to Our Intellectual Property](index=78&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property) Protecting intellectual property through patents and trade secrets is critical but faces uncertainty and potential infringement claims - Commercial success depends on obtaining and maintaining **robust patent protection**, which is not guaranteed[321](index=321&type=chunk)[324](index=324&type=chunk) - The company may be sued for **infringing on the intellectual property rights** of third parties, which could be costly and halt commercialization[338](index=338&type=chunk)[341](index=341&type=chunk) - The company relies on **trade secrets and confidentiality agreements** that may be breached or provide inadequate protection[352](index=352&type=chunk) [Item 6. Exhibits](index=93&type=section&id=Item%206.%20Exhibits) This section lists key agreements and required CEO and CFO certifications filed as exhibits with the report - Key exhibits include a collaboration agreement with Checkpoint Therapeutics, Inc, and a services agreement with Samsung Biologics Co, Ltd[389](index=389&type=chunk) - Certifications from the CEO and CFO pursuant to the **Sarbanes-Oxley Act of 2002** are included as exhibits[389](index=389&type=chunk)