G1 Therapeutics, Inc.
Q4 2020 Earnings Call Transcript

Published: 24 Feb 2021

[Operator:]

Ladies and gentlemen, thank you for standing by, and welcome to the G1 Therapeutics Fourth Quarter 2020 Financial Results Conference Call. Please be advised that today’s conference may be recorded. I would now like to hand the conference over to your speaker host today, Will Roberts, Head of Investor Relations at G1 Therapeutics. Please go ahead.

[Will Roberts:]

Thank you, Olivia. Good afternoon, everybody, and welcome to the G1 conference call to discuss our fourth quarter and full year 2020 financial results and business update. The press release on these financial results was issued after market close this afternoon and can be found in our News section of our corporate website g1therapeutics.com.

[Jack Bailey:]

Thanks, Will. Good afternoon, everyone, and thank you for joining us on the call today. We hope that you and your families are well. Today’s headline is that G1 is a very different company than it was a year ago, or even last quarter. Only eight days ago, we were in the call with you to announce the FDA approval of COSELA the first and only FDA approved therapy that it’s administered proactively to deliver multilineage myeloprotective benefits to patients with extensive stage small lung cancer. This higher G1 team is energized to do making this important therapy available to cancer patients. But as equal important is our rapidly evolving clinical pipeline, intelligently designed to help address the unmet needs of people with a variety of different cancers who require a range of chemotherapy. We are initiating and conducting clinical trials evaluating COSELA across an array of cancers in chemotherapy regiments. Within the first half of 2021, we expect to have two registrational trials underway, one in colorectal cancer in which we began dosing patients last month and another in metastatic triple negative breast cancer, which will initiate in the first half of this year.

[Raj Malik:]

Thanks, Jack and good afternoon, everyone, whoever’s on the call with us. This is a very exciting time at G1 as we are in the process of launching COSELA for patients with extensive stage small-cell lung cancer, and at the same time, developing it in the clinic for a variety of other solid tumors. Over the past few weeks, there has been considerable interest in the single mechanism, potential dual benefit of COSELA. So I want to take some time this afternoon to walk you through it, as it will help to clarify the educated approach that we are taking to determining the cancers to pursue in the clinic.

[Soma Gupta:]

Thanks, Raj, and good afternoon, everyone. Thanks for joining us on the call. These are exciting and very busy times as we are commercially launching COSELA, completing the training of our field force and generating broad interest as we prepare for product availability in the coming days. We provided a very robust update just a few days ago on our approval call, but today’s prepared comments will be fewer and focused on what we’ve accomplished in the last week or so. I will first briefly comment on our baseline awareness preapproval. G1 conducted a series of surveys over the past several months to a type of awareness in interest and usage and what we will continue to do so going forward.

[Jen Moses:]

Thanks, Soma, and good afternoon, everyone. As before mentioned, full financial results for the fourth quarter and full year 2020 are available in our press release and 10-K. Today, I’d like to focus on a few key points from our disclosures. License revenue for the fourth quarter of 2020 was $16.5 million, primarily related to an upfront payment or a license agreement with Simcere, which provides them with development and commercialization rights for trilaciclib across all indications in Greater China. This payment was recognized following the transfer of the related technology and knowhow which occurred during the period. In addition, we recognize revenue for existing inventory transfers related to our license agreements with Genor and EQRx for trilaciclib, as well as revenue for reimbursable clinical trial costs due from EQRx. License revenue for the full year 2020 was $45.3 million. G1’s research and development expenses for the fourth quarter of 2020 were $16.4 million, down from $24.5 million for the fourth quarter of 2019, the decrease was primarily due to a decrease in clinical program costs, external costs related to discovery and preclinical development and costs for manufacturing pharmaceutical active ingredients. We expect our clinical program costs to increase as we initiate our two new Phase 2 trial and our registrational trial in TNBC later this year. Our general and administrative expenses for the fourth quarter of 2020 were $24.3 million, double the $12.1 million in the fourth quarter of 2019. As we would be expected, the increase was largely due to an increase in compensation due to additional headcount and increases in pre-commercialization activities and medical affairs costs related to preparing the company and the market for the launch of COSELA. We ended the year with cash and cash equivalent of $207 million slightly above our year-end cash guidance of $200 million to $205 million. Subsequent to the reporting period between January 14 and February 9 of 2021, we sold 3,513,027 shares of common stock pursuant to our 2018 sales agreement for at the market offerings with Cowen and Company resulting in $86.4 million in net proceeds. This activity utilized all remaining capacity under the sales agreement. So this ATM offering is now closed. Also, the company now has access to $30 million of the remaining $80 million of our debt financing facility with Hercules Capital upon achievement of the FDA approval of COSELA milestone. We now expect our current financial position to be sufficient to fund operations into 2023. With that I’ll turn the call back over to Jack. Jack?

[Jack Bailey:]

Thank you, Jen, Soma and Raj. Before we close the call, I want to underscore that without the participation of people living with extensive stage small cell lung cancer and their families, doctors, nurses, and caregivers, we would not be making COSELA available today. We are grateful for their support and humbled to be part of your community. We will work hard every day to improve the chemotherapeutic experience of people living with extensive stage small cell lung cancer. Now, as I mentioned at the start, we are a very different company than we were a year ago, or even a quarter ago. Our first product COSELA is approved and will soon be available for patients living with extensive stage small cell lung cancer. We are developing a broad and growing clinical pipeline of intelligently designed trials across an array of cancers and chemotherapy therapeutic regimens with both myeloprotection and anti-tumor efficacy endpoints to deliver on our tumor agnostic vision for COSELA. With the additional 86 million from our, at the market, which is now closed, we believe that our cash runway will take us into 2023. This ATM offering has provided us with the capital that we believe we need to run the company and as such, we have no plans for any additional offerings in the near term. And we have a team of experienced professionals throughout G1 solely dedicated to bringing new therapies to cancer patients who need them. This all gives me the confidence as we turn the corner to commercialization, while at the same time, advancing the development of COSELA in a tumor agnostic manner. As we proceed with commercializing COSELA, we’ll be open and transparent to help you track our performance. While we will not be providing revenue guidance for 2021, we will consistently provide you with both qualitative and quantitative metrics, both leading and lagging indicators of interest and uptake along with our revenue results every quarter, starting with the results of the current quarter. With that, I’ll close the call and turn it over to Q&A. Operator, would you please remind our listeners, how to ask a question?

[Operator:]

Thank you. Now first question coming from the line of Ed White with H.C. Wainwright. Your line is open.

[Ed White:]

Thanks for taking my questions. So maybe just start off with a couple of questions for Jen that last $50 million from Hercules, what is the trigger for that to become available? And is that $80 million that’s available included in the guidance for cash to last through 2023?

[Jen Moses:]

Yes. Thanks, Ed. The full $80 million is not included because we have ability to access the $30 million I’m including that in the guidance into 2023. To access the additional portion of the Hercules facility, it’s revenue based for $30 million of it and the additional $20 million is at their discretion. So we expect to meet additional milestones later in this year.

[Ed White:]

Great. Thank you. And then a question for Soma, just one thing you had mentioned was that non-aided patients had concerns over myelosuppression, I’m just wondering if do you have plans for any DTC advertising.

[Soma Gupta:]

Yes, sure. Happy to take that. So what we actually think because small cell is an urgently presenting disease, broad-based if you see for small cell, probably doesn’t make sense. But what we do think is critical is working with advocacy. So we’ve actually been doing quite a bit with go to foundation and longevity because we think that what will happen is once they get a diagnosis they will very quickly seek out the major advocacy organizations to get their information. So we actually think that that’s the best way to get that in their hands versus big DTC, which obviously can be a significant expense, but more importantly – probably won’t get to them at the time that they actually need to make the decision. So we’re being very targeted about it. We are doing some digital consumer things. But in general, we do think advocacy has the greatest role to play here, just given the urgency of the diagnosis and how quickly they go on treatment.

[Ed White:]

Great. Thank you. And then my last question is for Raj, just you gave great guidance over the timing of data for some of the trials. I’m just wondering if you can give us some thoughts on timing for data for the triple negative breast cancer trial, and also the bladder cancer. Thank you.

[Raj Malik:]

Yes. Hi, Ed. Yes, for the TNBC, it would be the second half of 2023. And for the bladder cancer, we expect initial data later next year towards the end of 2022.

[Ed White:]

Okay, great. Thank you very much for taking my questions.

[Operator:]

And our next question coming from the line of Chad Messer with Needham. Your line is open.

[Chad Messer:]

Great. Thanks for taking my questions. Maybe to start, as you’re out there preparing to bring this drug to patients, is there a profile that you think doctors have for the initial patients, they might try to get this on maybe by risk factor or line of treatment or something like that? Or do you think kind of first available as of March 2?

[Jack Bailey:]

Yes. Thanks Chad for that question. I really think because of the profile and the benefits that COSELA brings really any patient, who’s got extensive-stage small cell lung cancer is really the target. And we talk about first time, every time they get put on chemotherapy. So given that every patient in that first line regimen that we studied and having our label get those benefits, both in terms of the reductions in levels but also feeling better, we believe that ultimately it’s not a question of portioning out patients, but rather it’s really every patient first time, every time who’s got extensive-stage small cell lung cancer.

[Chad Messer:]

Yes. No, I think given the small cell is like that makes sense. Perhaps just one on the Rinto data that’s coming up, can you help us benchmark what good efficacy based on sort of the competitive landscape would look like in combination with palbo?

[Jack Bailey:]

Go ahead, Raj.

[Raj Malik:]

Yes. Chad, Raj here. Yes. So in this 40 patient data set where Rinto was combined with palbo, the patient population was less heavily pretreated compared to our monotherapy data set closer to the population that was enrolled in the PALOMA-3 trial and that trial the clinical benefit rate at six months was a 64%. So what we will be looking for is continued good safety and tolerability, the profile we saw as a monotherapy and a CBR rate in that 60% to 65% range.

[Chad Messer:]

All right. Great. Thank you. Very helpful.

[Operator:]

And our next question coming from the line of Phil Nadeau with Cowen. Your line is open.

[Phil Nadeau:]

Good afternoon. Thanks for taking my questions. A couple on the commercial side, you mentioned compendia that submissions have been made. Can you remind us, are some compendia more important than others, which are the ones that are particularly influential?

[Jack Bailey:]

Soma, can you handle that please?

[Soma Gupta:]

Yes. Sure. So obviously, compendia have pretty broad category of things. I think NCCN is sort of a compendium in of itself. So that is clearly the gold standard. There are additional ones though, that are in the mix that drive pathways for kind of within the larger GPO type environments. And those are ones that we have submitted to on the clinical side. And then on the payer – on the kind of more payer access side, things like Micromedex, Lexi-Drug, things like that we’ve also submitted to so that they can sort of flow into through the EHR systems. So there’s multiple different ones and we’re actively pursuing each one, but NCCN is the go-to guide for compendia and while it is very influential on the other pathways, I guess is the best way to put it.

[Phil Nadeau:]

Got it. Okay. That’s very helpful. And in terms of NCCN specifically, do they host meetings where they come to determinations? Or is there a defined protocol that they work through as they’re assessing new drugs? Or has it been more on the fly just as drugs are available, they tend to consider them?

[Jack Bailey:]

Yes. I want Raj to you answer that.

[Raj Malik:]

Yes, Phil. Yes, so we submitted the applications to both the small cell lung cancer and hematopoietic growth factor guideline committees. Typically, what they will do is with new drug approvals, they will meet, whatever they’re able to pull the guideline committees together and review the evidence. So that’s why we think it would take a few months and but they often do that outside of the regularly scheduled meetings, which occur annually.

[Phil Nadeau:]

Got it. And maybe last question from us before the NCCN comes out, it’s utilization likely I guess how closely to physicians and practices adhere to the NCCN guidelines. Will they adopted new medicine prior to the guidelines, or is it similar to the ACIP recommendation for a vaccine where the NCCN guidelines are major channels for uptake?

[Jack Bailey:]

Yes. So this is Jack, thanks for the question. We won’t get some utilization prior to NCCN, but that is an important point or catalyst to Soma’s earlier point, as that triggers the regional pathway organizations and it enables a lot of times organizations to then get in the same type orders. But you will get some utilization. It’s a very helpful endorsement obviously in the oncology space to get them to doorstep. And as Raj said, we’re probably a couple months until we get that.

[Phil Nadeau:]

Perfect. Thanks for taking my questions and congratulations on the progress.

[Operator:]

And our next question coming from the line of Tony Butler with ROTH Capital. Your line is open.

[Tony Butler:]

Yes. Raj, I want to just touch on the trial in bladder cancer with avelumab and I wanted to understand would the trial actually mimic JAVELIN 100? That’s effectively the first question. And secondly the key is, do you actually utilize COSELA during the – because you do have first-line platinum chemo before you actually put the NCO1 path with respect to maintenance. Do you actually put COSELA onboard just during the chemotherapy phase and then it stops as avelumab comes on board? I just want to clarify. Thanks.

[Raj Malik:]

Yes. Hi, Tony. Yes, you’re actually right. JAVELIN 100 is set off the model of avelumab. I mean, that’s the standard with avelumab maintenance following up to six cycles of gem platinum therapy. So our trial is going to include COSELA administered with the chemotherapy and with the avelumab maintenance with the control arm being of course, just the chemotherapy alone and avelumab maintenance. So it says essentially it’s an add-on to that standard of care.

[Tony Butler:]

That’s great. And then again, if I may, the readout is overall survival. Is that a fair? Or is there a PFS readout I’m asking, what in effect would be the primary?

[Raj Malik:]

Yes. So, we’ll provide more details on that, Tony, when we describe the trial. But these are all the antitumor efficacy readouts with the initial readouts being towards the end of next year, as I mentioned, which would likely be more response rate focused with others to follow.

[Tony Butler:]

Thanks, Raj. Appreciate it.

[Raj Malik:]

Sure.

[Operator:]

And our next question coming from the line of Dane Leone with Raymond James. Your line is open.

[Dane Leone:]

Hi. Thank you for taking the questions. Congratulations on the launch. And thank you for providing the details around that. I just wanted to ask more of a strategic question. When you think about the company going into the launch of trilaciclib and potentially expanding indications over the next couple of years, how do you think about other assets around that that I guess, you may think about acquiring externally or bringing in? Do you view G1 Therapeutic stays focused more on supportive care for oncology at this point? And that’s where the synergy would be with the channel that you’re building. Or would you also look at more traditional assets that would be directly targeting the tumors as well? How are you thinking about the company’s strategy as it’s kind of changing right now? Thank you.

[Jack Bailey:]

Thank you, Dane, appreciate the question. I think for the foreseeable future, we’ve really tightened the strategic aperture around trials, just given this sort of pipeline and a molecule potential that it has given the dual benefits of both myeloprotection and antitumor efficacy on an array of different tumor types and chemo regimen. So from a capital allocation strategy, that’s really where we’re highly focused on making sure that we have a successful launch here and the initial indication, along with getting a new business development plan. All of those studies initiated in the first half of this year. So for the foreseeable future, really is try to focus, obviously we do have a winter weather, we’ll get the readout next quarter on that. But the primary focus for us is really around trial here for the foreseeable future.

[Dane Leone:]

Great. Thank you.

[Operator:]

Our next question coming from the line of Anupam Rama with JPMorgan. Your line is open.

[Unidentified Analyst:]

Yes. Hey guys. This is Tessa on the call today for Anupam. Thanks for taking our question. Just a quick one on the pipeline, actually sort of bridging from a prior question, thinking about the expansion data that we’re going to get in 2Q. I was wondering Raj or anyone else, can you get a little bit more granular for us when looks like from a safety perspective? And then just kind of a logistical one, is this plan to be like a PR or a medical meeting presentation? How are you thinking about that? Thanks so much.

[Raj Malik:]

Yes. Hey, Tessa. Yes, from a safety perspective, continued good safety profile. We were very quite favorable in terms of GI tolerability, and that’s what we would want to continue to see. Obviously, no bradycardia, no ocular toxicities, which have been issues with some of the other agents, as well as cytopenias. So I think those are the safety signals we would be looking for. And we would expect to present the data at a medical meeting.

[Unidentified Analyst:]

Okay. Great. Thanks for taking our questions.

[Raj Malik:]

Sure.

[Operator:]

And our next question coming from the line of Tom Shrader with BTIG. Your line is now open.

[Kaveri Pohlman:]

Hi, this is Kaveri Pohlman for Tom. Thanks for taking our questions. For your first line trial, can you tell us why you chose bladder cancer? Given enfortumab vedotin is going to be in bladder cancer soon, whereas frontline in non-small cell lung cancer is more static. And to follow up on that, do you plan to do a trial in combination with ADCs because neutropenia is the dose limiting toxicity for almost all of them.

[Raj Malik:]

Yes. Good question. So regarding bladder, our strategic interest in that particular study was to generate data in combination with checkpoint inhibitors. And so that was certainly the driving force there. Fully understand your comment about Padcev – sorry and that ADC, so we’ll have to obviously follow that data in first line when that matures. Yes. In terms of combinations of ADCs, that is an area that we’re also exploring for exactly, for the reason you mentioned. We actually think there could be two potential ways that we could add to ADCs not only by improving myelosuppression, but also through this immune enhancing property of COSELA, because at the end of the day the ADC is chemotherapy and so that we’ve seen activity to gem/carbo and triple negative breast cancer. So yes, I think it makes sense definitely to combine with ADCs and we’re exploring that.

[Kaveri Pohlman:]

Got it. And for a triple negative breast cancer, can you talk about your rationale for not using a checkpoint inhibitor combination because that’s to some extent – to some point is more immunogenic tumor and atezo is already approved in the frontline setting.

[Raj Malik:]

Yes. I think it goes back to our data where we saw activity in both PD-L1 positive and PD-L1 negative, and the checkpoints are only approved in PD-L1 positive about 40% of the population of metastatic triple negative breast cancer. So we wanted to enroll all comers in both PD-L1 positive and PD-L1 negative. If you look at our data, we showed in a relatively small trial and improvement in survival, which has not been seen with either checkpoint inhibitor. So if we’re able to reproduce those data, in fact, the combination of trilaciclib with chemo could even potentially be an alternative to a checkpoint inhibitor. So that was our rationale in first line. In second line, it is post checkpoint inhibitor and given the immune mechanism of action. And since trilaciclib is a CDK4/6 inhibitor, it has a different immune mechanism to checkpoints. We believe there’s an opportunity to see activity in the post checkpoint setting, which is clearly an unmet need as well. So that was our rationale behind the design in triple negative breast cancer. And our second and third line non-small cell lung cancer study is also in a post checkpoint setting.

[Kaveri Pohlman:]

Great. Thanks and congrats on the progress.

[Jack Bailey:]

Thank you.

[Operator:]

And our next question coming from the line of David Nierengarten with Wedbush Securities. Your line is open.

[David Nierengarten:]

Hey, thanks for taking the questions. I had two if I may. First off on the bladder cancer study, I’m curious, obviously it’s a bit different than presentation than the triple negative, where you have a fixed cycle of chemo where you’re planning to dose COSELA and then dose COSELA in combination with an IO agent afterwards. So I was a little curious if there was any way to analyze or break apart the data or potential benefit of COSELA between – as you think about the study between the chemo portion and the maintenance therapy with avelumab. And then quickly on the cash guidance into 2023 is that incorporating OpEx only or presumed revenues. Thanks.

[Raj Malik:]

Yes. David so in terms of – that’s exactly what we will do, what we’re interested in is to look at – so for example, patients got up to six cycles of gem-platinum in this regimen, and then if they have not progressed, they go on to receive avelumab. So one of the things would be interested in looking at, given our data with gem/carbo in triple negative breast cancer is do more patients that you make it to maintenance avelumab. And so we will be looking at that. And then of course, we’ll be looking at survival and PFS across the entirety of the study, but also from the initiation of maintenance, so that we can have evaluated versus the JAVELIN data. Because obviously that trial – only that trial started from the maintenance portion because only patients who made it onto avelumab are included in that trial. So yes, we will be looking at the trial overall and breaking it apart into those two components.

[Jen Moses:]

David, this is Jen. So on the runway, when we’re looking at, we actually have a number of ways to get into 2023, and I’m being kind of cautious saying into 2023 and now giving further guidance on it. So if you look at the cash balance we have after the ATM, you look at the ability to draw down debt, even if we just look at the $30 million, that’s still – that’s available right now. Also we are expecting some milestone payments from our partners. Not as large as we saw, obviously in 2020, but to add to that runway. And then we would be anticipating revenue. We ran it with a range of revenues and feel very comfortable giving guidance into 2023.

[David Nierengarten:]

Okay. Got it. Thank you.

[Operator:]

That’s all the time we have for questions today. I would now like to turn the call back over to Jack Bailey for closing remarks.

[Jack Bailey:]

Thank you, operator. So in summary, 2020 was a strong year progress for the company. We look forward to keeping you all updated as we continue to progress in 2021. We are excited to bring COSELA to patients with extensive stage small-cell lung cancer, and look forward to keeping you updated as we move forward. To everyone listening, thank you for joining us today, and please stay well.

[Operator:]

Ladies and gentlemen, that does conclude the conference for today. Thank you for your participation. You may all disconnect.