TG Therapeutics’ ROIC of 11.28% is lower than its WACC of 14.35%, indicating it is not generating returns above its cost of capital.
Comparative analysis shows Amicus Therapeutics (FOLD) with a ROIC of 55.32% significantly outperforms peers, suggesting strong capital efficiency.
Both Karyopharm Therapeutics (KPTI) and Axsome Therapeutics (AXSM) display negative ROIC, highlighting challenges in capital utilization.
TG Therapeutics, Inc. (NASDAQ:TGTX) is a biopharmaceutical company focused on developing and commercializing treatments for B-cell diseases. The company’s primary focus is on therapies for cancer and autoimmune diseases. In the competitive landscape, TG Therapeutics faces peers like Karyopharm Therapeutics, Aurinia Pharmaceuticals, Axsome Therapeutics, Amicus Therapeutics, and Viking Therapeutics, each with varying degrees of capital efficiency.
In evaluating TG Therapeutics’ financial performance, the Return on Invested Capital (ROIC) is a crucial metric. TGTX has a ROIC of 11.28%, which is lower than its Weighted Average Cost of Capital (WACC) of 14.35%. This results in a ROIC to WACC ratio of 0.79, indicating that the company is not generating returns that exceed its cost of capital. This suggests that TG Therapeutics may need to reassess its capital allocation strategies to improve its financial performance.
Comparatively, Karyopharm Therapeutics (KPTI) shows a negative ROIC of -310.56% against a WACC of 10.84%, resulting in a ROIC to WACC ratio of -28.64. This indicates significant inefficiencies in capital utilization. Similarly, Axsome Therapeutics (AXSM) has a negative ROIC of -76.54% and a WACC of 6.23%, leading to a ROIC to WACC ratio of -12.28, further highlighting challenges in generating returns above the cost of capital.
On the other hand, Amicus Therapeutics (FOLD) stands out with a ROIC of 55.32% and a WACC of 7.96%, resulting in a ROIC to WACC ratio of 6.95. This indicates that Amicus is effectively utilizing its capital to generate returns significantly above its cost of capital, suggesting strong capital efficiency and potential for growth. This performance sets a benchmark for TG Therapeutics and its peers in terms of capital utilization.
Aurinia Pharmaceuticals (AUPH) and Viking Therapeutics (VKTX) also present interesting cases. Aurinia has a ROIC of 6.58% and a WACC of 9.46%, resulting in a ROIC to WACC ratio of 0.70, indicating a need for improvement in capital efficiency. Viking Therapeutics, with a ROIC of -20.32% and a WACC of 7.69%, has a ROIC to WACC ratio of -2.64, showing inefficiencies similar to Karyopharm and Axsome.
