G1 Therapeutics, Inc. (GTHX) Q2 2019 Earnings Call Transcript

GTHX earnings call for the period ending June 30, 2019.

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G1 Therapeutics, Inc. (NASDAQ:GTHX)
Q2 2019 Earnings Call
Aug. 7, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, please remain on your line. Your G1 Therapeutics 2nd Quarter corporate and financial updates will begin momentarily. Thank you for your patients.

Good afternoon ladies and gentlemen, and welcome to the G1 Therapeutics 2nd Quarter corporate and financial updates. At that this time, all participants are in a listen-only mode. Later we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press * then 0 on your touchtone telephone. As a reminder, this conference call may be recorded.

I would like to now turn the conference over to your host, Mr. Jeff Macdonald, Head of Investor Relations. Sir, please go ahead.

Jeff Macdonald -- Head of Investor Relations

Thank you, operator. Good afternoon, everyone, and welcome to the G1 Therapeutics 2nd Quarter 2019 update. Joining me are Mark Velleca, Chief Executive Officer, Raj Malik, Chief Medical Officer and Senior Vice President, R&D, and Jen Moses, Chief Financial Officer. Before we begin, I would like to remind you that today's call will include forward-looking statements based on current expectations. Such statements represent management's judgment as of today, and they involve risks and uncertainties that could cause actual results to differ materially from expected results. Please refer to our files with the FCC, which are available from the FCC or on our corporate website for information concerning risk factors that could affect the company.

I'll now turn the call over to Mark.

Mark Velleca -- Chief Executive Officer

Thanks, Jeff. Good afternoon, everyone, and thank you for joining us today. In the first half of 2019, we made significant progress advancing all 3 of our clinical-stage therapies. Trilociclib, lerociclib, and G1T48. On today's call, I'll provide a summary of that progress and highlight upcoming clinical and regulatory milestones. Then, Raj will discuss today's announcement regarding breakthrough therapy designation for Trilociclib and preview data that have been accepted for presentation at the upcoming European Society for Medical Oncology, or ESMO meeting.

Of note, we'll be hosting an investor event and webcast at ESMO on the evening of Sunday, September 29, to review key data and share updated development and commercial plans for all 3 of our investigational therapies.

Following Raj's comments, Jen will review the financials for the quarter, then we'll open the call for questions.

Let's turn first to the potential of G1's pipeline for people living with breast cancer. Emerging data from trials across our 3 investigational therapies suggest that all of them could significantly improve outcomes for patients with breast cancer, including in early stages of their disease. Our overarching development strategy for all 3 programs is to design and execute clinical trials that will enable us to rapidly advance into first-line and adjuvant settings where these therapies can provide the most benefit to patients.

Looking more specifically at each therapy, I'll begin with trilociclib. We now have data showing that trilociclib can provide both milo preservation and overall survival benefits. These benefits will vary by tumor type, and our development plans for 2020 and beyond include settings where we would expect to see benefits in survival, milo preservation, or potentially both. We remain on track to file marketing applications in both the U.S. and Europe in 2020 for milo preservation and small cell lung cancer based on positive feedback from regulatory meetings. We have a pre-NDA meeting scheduled with the FDA in September, and we will be able to provide a more precise timeline on an NDA submission once we receive written minutes from that meeting.

In September, we are also having parallel discussions with the FDA regarding preliminary data from our Phase 2 metastatic triple-negative breast cancer, or TNBC trial, that demonstrated a statistically significant and clinically meaningful overall survival benefit in this aggressive type of breast cancer. We will be able to provide an update on the next steps once we receive written minutes from that meeting, and we look forward to presenting detailed data from the trial at a medical conference later this year.

Turning to lerociclib, our goal has been to identify a dose with 2 key attributes. 1.) Comparable efficacy to currently approved CDK46 inhibitors, and 2.) a better safety profile compared to approved agents, including better GI tolerability and less Grade 3-4 neutropenia, which could translate to less frequent blood count monitoring. In market research, oncologists stated that these are key points of differentiation that are particularly important to using oral CDK46 inhibitors in the adjuvant breast cancer setting.

In the 4th Quarter of 2019, we expect to present data at a medical meeting demonstrating lerociclib's differentiated clinical profile and the dose that we will bring forward in a clinical trial that will initiate in 2020. That trial will be patient's with ER-positive HER2 negative breast cancer, whose disease has progressed following endocrine therapy. Positive data from this trial would support regulatory filings and provide a development path for lerociclib into the adjuvant breast cancer setting.

The first clinical data for our third program, G1T48, will be presented at ESMO this year. Raj will provide more details regarding what to expect in that presentation. We believe G1T48 can be the best in class oral SERD and expect to identify a dose by the end of the year that we expect to take forward into pivotal trials in 2020. That trial will be an important step in enabling G1T48 either in combination or as monotherapy, to move into the adjuvant setting, which is where an oral SERD could become standard of care. The adjuvant setting represents a significant opportunity to improve outcomes for hundreds of thousands of people living with breast cancer worldwide.

To summarize, trilociclib will be submitted for regulatory approval in both the US and Europe in 2020, and we will initiate trials and new indications measuring both survival and milo preservation benefits. We are also initiating pivotal trials in breast cancer for both lerociclib and G1T48 in 2020, with the objective in these trials enabling development in the adjuvant setting.

Before I turn the call over to Raj, I would like to welcome Mark Avagliano to the G1 management team as Chief Business Officer. Mark has an impressive track record of significant corporate-level transactions while heading Pfizer's mergers and acquisitions, transactions, and valuations, and out-licensing groups. He will lead our partnership and corporate development initiatives as we approach filing, approval, and launch of trilociclib and achieve significant clinical milestones for lerociclib and G1T48.

And now, Raj will provide a regulatory update and discuss our upcoming data presentations at ESMO. Raj?

Raj Malik -- Chief Medical Officer and Senior Vice President, R&D

Thanks, Mark. As Mark mentioned, we'll be quite busy at this year's ESMO meeting that begins on September the 27th, presenting new data on each of our investigational therapies. Before providing context around those data, I want to briefly touch on where we are in the trilociclib regulatory process.

In this afternoon's press release, we announced the FDA has granted breakthrough therapy designation based on milo preservation data in small cell lung cancer patients from our 3 randomized Phase 2 trials. Breakthrough status is designed to expedite development and review of drugs intended for serious or life-threatening conditions. Our pre-NDA meeting has been scheduled for next month, and we will provide an update on the next steps and a more definitive NDA submission timeline once we have received written minutes from that meeting.

We also have a parallel discussion with the FDA regarding the recent positive overall survival findings from the metastatic triple-negative breast cancer trial. We did not have this data during the end of Phase 2 discussions with the FDA, and we're looking forward to getting their feedback on the TNBC survival data. We will provide an update on the next steps for TNBC once we have received written minutes from that meeting.

Turning to ESMO, we are excited to present the first clinical data on G1T48, our selective estrogen receptor degrader or SERD. First, some background on estrogen targeted therapies in breast cancer, and why there is such enthusiasm in the field for an oral SERD.

The estrogen receptor is one of the best-understood targets in oncology, and therapies that block estrogen production or its effects, such as aromatase inhibitors and tamoxifen, have proven to be effective drugs that are widely used to treat ER-positive breast cancer. In head to head trials, the intramuscular injectable SERD, fulvestrant, has been shown to be more effective than those therapies, demonstrating that degrading the estrogen receptor is the most effective approach for blocking ER-mediated signaling.

However, fulvestrant has poor bioavailability, and the injections can be painful and are needed monthly. This profile has precluded its development and uses in the adjuvant setting. A well-tolerated oral CERD that can improve on the efficacy and tolerability profile of fulvestrant would have the potential to become a standard of care for the treatment of 1st line advanced disease and in the adjuvant setting.

Treatment in the adjuvant setting is often for 5 years or longer. In order for an oral CERD to be used in this setting, the safety and tolerability profile needs to meet or exceed existing therapies, such as aromatase inhibitors and tamoxifen. Safety is also an important consideration for combination therapy since many patients would receive an oral CERD in combination with a CDK45 inhibitor and other targeted agents.

G1T48 data being presented at ESMO will include PK, fast PAP, safety, tolerability, and efficacy. There has been no dose-limiting toxicities or serious adverse events reported with G1T48 to date. We have completed the dose-escalation portion of the trial and are now enrolling patients in the Phase 2 dose expansion. And, by the end of the year, expect to have the dose defined for pivotal trials in 2020.

We believe that G1T48 has the profile necessary to become best in class and overcome the safety and tolerability issues that have challenged other oral CERDs in development. G1T48's proprietary chemistry, which is based on a drug with a proven safety database in millions of women, differentiates it from other oral CERDs in development.

There are a few points to keep in mind regarding the anti-tumor efficacy data that will be reported. 1.) We will be presenting data from the dose-escalation portion in approximately 25 patients, and most of the patients did not receive the dose we will be taking forward into pivotal trials. 2.) The patient population has been heavily pretreated, with the majority having received either a CDK46 inhibitor, fulvestrant, or both, and we will be presenting early data with limited duration of treatment. 3.) PFS and OS and not response rate are the approvable endpoints in 1st and 2nd line advanced breast cancer. Clinical benefit rate, which includes response rate and prolonged stabilization of disease, can serve as an indicator of meaningful clinical activity for this typically slow-growing tumor and is a reasonable surrogate for PFS. So given the prior treatment history and iatrogenicity of patients in this trial, we will be showing patient-level efficacy data to provide context.

We are excited to share these promising G1T48 data at ESMO. While still early in development, we believe that the high degree of target validation for the class, coupled with the favorable AE profile that we are seeing with G1T48 is very encouraging.

In addition to the G1T48 data, abstracts on 2 other trials have been accepted by ESMO. The trilociclib plus chemo endocentric trial in small cell lung cancer, and the Phase 1-2A lerociclib pastoral trial in non-small cell lung cancer. Last year, we presented milo preservation data for the trilociclib chemo to centric trial, which showed meaningful improvements across multiple milo preservation measures. The results being presented at ESMO will provide detailed milo preservation data and an update on tumor efficacy.

As we've noted previously, small-cell lung cancer is not a particularly immune sensitive tumor, and we do not expect to see a significate improvement in tumor efficacy in this small trial. Data from the lerociclib liturgical trial will focus on tolerability and safety from the first several cohorts from the dose-escalation portion of the trial. It is too early to have any meaningful efficacy data.

Finally, I'd like to make a few comments about the recently announced trilociclib TNBC data, which showed a statistically significant and clinically meaningful improvement in overall survival for women receiving trilociclib and a chemotherapy regimen of gemcitabine and carboplatin compared with chemotherapy alone. We announced preliminary data from this trial at the San Antonio Breast Cancer Symposium in 2018, which showed encouraging progression-free survival trends and favorable safety and tolerability profile. The recent overall survival data comes from the next prespecified data cut following San Antonio.

This is 102 patient trial with three arms, 2 trilociclib arms, and a control arm. The overall survival benefit in each of the trilociclib arms was statistically significant compared to the control arm, which preformed as expected to historical data. In reviewing the data, we believe that the survival benefit is likely due to an immune-mediated response and is consistent with trilociclib mechanism of action, that of transient G1 cell cycle arrest of T lymphocytes and enhancement of anti-tumor immunity. While patients in the trilociclib arms did receive more doses of chemo compared to the control arm, additional chemotherapy alone would not be expected to drive the magnitude of the OS benefit seen in this randomized trial.

These are very promising findings. We look forward to presenting detailed data at a medical meeting later this year and discussing them with the FDA next month.

I'll now turn the call over to Jen for a review of the financials. Jen?

Jennifer Moses -- Chief Financial Officer

Thanks, Raj. I'll review several items on today's call. For full financial results for the 2nd Quarter, they're available on our press release and 10Q.

We reported a net loss of $30.7 million for the 2nd Quarter of 2019, compared to $20.9 million for the 2nd Quarter of 2018. Operating expenses were $32.6 million for the 2nd Quarter of 2019, compared to $21.7 million for the prior-year period. Operating expenses including non-cash stock compensation expense of $3.1 million for the 2nd Quarter of 2019, compared to $2.1 million for the prior-year period.

Research and development expenses for the 2nd Quarter of 2019 were $23.5 million compared to $18.4 million in the 2nd Quarter of 2018. The increase in expense was due to an increase in clinical program costs, drug manufacturing and development costs, and personnel-related costs due to additional headcount.

General and administrative expenses for the 2nd Quarter of 2019 were $9.1 million compared to $3.3 million for the prior-year period. The increase in G&A expense was largely due to an increase in pre-commercialization activities, an increase in headcount, and an increase in other costs necessary to support our operations as a public company.

As of June 30th, 2019, we had $324.9 million in cash and cash equivalents on the balance sheet compared to $369.3 million as of December 31st, 2018. We are confirming the annual guidance we announced in June and expect to end the year with between $260 million and $270 million in cash and cash equivalents.

I'll now turn the call back over to Mark. Mark?

Mark Velleca -- Chief Executive Officer

Thanks, Jen. A quick summary before we go to Q&A. We are meeting with the FDA in December to discuss our NDA for trilociclib in small cell lung cancer. We'll provide an update on those discussions after we receive written minutes. We plan to submit filings for small cell lung cancer in both the US and Europe in 2020. Breakthrough therapy designation from the FDA provides us with an opportunity for even closer collaboration with the agency, as we continue to work on the NDA and development of trilociclib and other indications.

We are also meeting with the FDA in September to review the data from our trilociclib trial that demonstrated an overall survival benefit in triple-negative breast cancer and to discuss next steps. We will provide an update on those discussions after we receive written minutes. We look forward to moving trilociclib into additional registrational trials in 2020 so that patients being treated with chemotherapy have the potential to benefit from this important investigational therapy.

We will present data on all 3 of our investigational therapies at ESMO and are particularly excited to share the first clinical data on G1T48. We are planning to host an investor event at ESMO on Sunday evening, September 29th, to review the data. An external expert will provide commentary. Additionally, we will review our development plans that enable moving all 3 therapies into early lines of breast cancer treatment. We will also share our long-range commercial plans for all 3 therapies and discuss the total addressable market of patients that could benefit across multiple indications. The event will be webcast, and we will be providing additional information in the near future.

Finally, we are in a solid financial position, with significant cash to advance our development programs and reach additional value-creating clinical and regulatory catalysts. As we do so, we expect that partnership discussions will accelerate, and are very pleased to have an experienced and highly accomplished Chief Business Officer, Mark Avagiliano, leading that effort.

Our accomplishments in the first half of the year have set up an exciting slate of milestones over the remainder of 2019 and into 2020. We look forward to sharing our progress and bringing important new therapies to people with cancer.

...

That concludes our prepared remarks. Operator, please open the call for questions.

Questions and Answers:

Operator

Ladies and gentlemen, if you have a question at this time, please press * and then the No. 1 key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the # key.

Your question is from the line of Chris Shibutani from Cowen and Company, your line is now open.

Christopher J Zopf -- Cowen and Company -- Research Associate

Hi, guys. This is CJ on for Chris. Congratulations on the quarter and all the progress across the pipeline. I was curious -- a question on G1T48. It sounds like you are, if I understand correctly, in the dose-expansion stage of the trial. But it sounds like you're still confirming the recommended Phase 2 dose. I'm curious if the expansion that's currently ongoing has the potential to be rolled into larger registration directed expansion as a monotherapy? Are there still plans to do monotherapy expansion next year? And then for the combination, are you looking to partner for the combination trials or purchase the CDK46? What is your kind of expectations there?

Mark Velleca -- Chief Executive Officer

Thanks, CJ. It's Mark. I'll let Raj answer the first part of that question, and I can address the second part about the partnership. Raj?

Raj Malik -- Chief Medical Officer and Senior Vice President, R&D

Yeah. So, CJ, the design of the study was a dose-escalation, which we've completed, and an expansion. And because the drug is well tolerated, we're actually using the expansion phase to define the dose. So we get a larger safety database, and we're looking at other endpoints as well. And we expect to have the dose defined by the end of the year.

The goal will then be to take the recommended dose that we define into registrational trials next year. Which will be randomized trials in combination with a 46 inhibitor as we mentioned.

Mark Velleca -- Chief Executive Officer

And regarding access to that 46 inhibitors, it could be in the context of a nonexclusive partnership. It could be in the context of an exclusive deal. And remind you, we have our own oral CDK46 inhibitor lerociclib. So, multiple options for us regarding partnerships.

Christopher J Zopf -- Cowen and Company -- Research Associate

Great. And just to clarify, maybe I missed this. For your conversations on TNBC for trilociclib that you've had with regulators, did you say when we might hear about how those have gone? Are you waiting for minutes?

Mark Velleca -- Chief Executive Officer

That's a separate discussion also in the September timeframe. So we'll provide feedback once we have written minutes.

Christopher J Zopf -- Cowen and Company -- Research Associate

Great. Okay, thank you very much.

Operator

Next question is from the line of Anupam Rama from JP Morgan. Your line is now open.

Anupam Rama -- JP Morgan -- Analyst

Hey, guys. Thanks so much for taking the question and congrats on all the progress. Just a quick one from me. As you think about the ESMO updates, to what extent will they be incremental new data in the abstract for the 3 updates versus say having to wait for the full presentation for a better picture of what's going on? Thanks so much.

Mark Velleca -- Chief Executive Officer

Yeah, absolutely. Again, I'll start with that. It's Mark. Thanks for the question, Anupam. As you can imagine, you know, abstracts are written months before the actual data is put together for a poster or a presentation. So there will be some patient quantitative data in the abstract. And you could expect very simply more patients and more data around those patients in the actual presentation. And I think that's really across the board for all three of the presentations that we expect to make.

Anupam Rama -- JP Morgan -- Analyst

Great. Thanks so much for taking our questions.

Operator

Next question is from the line of David Nierengarten from Wedbush. Your line is now open.

David Nierengarten -- Wedbush Securities -- Analyst

Okay, thanks for taking my question. I had one on the design and expansion of the T48 study. Will we see dose combinations or the dose selection data in combination with the CDK46? Or will it all be monotherapy as we look for the next couple sets of data? Obviously, I know that the pivotal study will be in combination, but were there be any interim step there in combination with the CDK46? Thanks.

Raj Malik -- Chief Medical Officer and Senior Vice President, R&D

Yeah, David, this is Raj. So the expansion has just recently started. So the majority of the data that we'll be presenting will actually be from the dose-escalation part of the study. But it is a -- we're going to define the dose as monotherapy and then take it into combinations.

David Nierengarten -- Wedbush Securities -- Analyst

Okay. And then just a quick follow up if I could on the monotherapy, thinking back across other CERDs, is there any particular aspect that you think is -- I guess asking you to highlight what you're going to highlight, but you know, is there -- we're looking at tolerability or efficacy across board, or we'll just wait and see?

Raj Malik -- Chief Medical Officer and Senior Vice President, R&D

Yeah, that's a good question. You know, it's a Phase 1, heavily pretreated patient population. And it's really safety, safety, and tolerability. And we'll, of course, present the efficacy data we have. I think it's important to keep in mind what the goal of developing the CERD eventually is. And that is to move it into earlier stages of treatment.

So 1st line advanced setting, and then importantly, into the adjuvant setting both as a monotherapy and combination. So the key is to access safety and tolerability. I think that's where the focus should be.

David Nierengarten -- Wedbush Securities -- Analyst

Okay. Thank you.

Operator

Your next question is from the line of Chad Messer from Needham & Company. Your line is now open.

Chad Messer -- Needham & Company -- Analyst

Right, good evening, and thanks for taking my question. I wanted to congratulate you guys on the breakthrough status for trilociclib. I believe in the FDA's own definition that means they recognize that milo preservation as a life-threatening unmet need and your data as showing reasonable signs of efficacy. So a really good buy in there.

I know we'll get an update on timelines to post minutes, but given the close interaction that you get from the FDA and some of the other bells and whistles from breakthrough, do you see this affecting your own sort of internal timelines, in terms of things you need to be prepared for in terms of filing and potential approval?

Raj Malik -- Chief Medical Officer and Senior Vice President, R&D

Yeah, hey Chad, thanks. We're obviously very excited about the BTD, and it's good to see that the agency recognizes the real need that the trilociclib can fill for patients who need this drug for not only for milo suppressions but also efficacy with the early TNBC data.

So after we had a positive end of Phase 2 meeting, we were planning to file an NDA. So we've been moving on that path. Having a breakthrough certainly helps. As you said, we just recently got it and announced it. And it does mean that we'll be working very closely with the agency to get this drug to patients, which is great.

Chad Messer -- Needham & Company -- Analyst

All right. Thanks, and looking forward to ESMO.

Operator

Next question is from the line of Harshita Polishetty from B Riley FBR. Your line is now open.

Harshita Polishetty -- B Riley FBR, Inc. -- Analyst

Hi. Good afternoon. Great update today. Let me offer my congratulations as well, and thank you for taking my questions. I had one which has been answered, so just another quick one from me. The T48 data around the corner, very exciting. I guess piggybacking off of David's question sort of, I was curious if you've done any pre-clinical competitor analysis to other oral CERDs in development. I guess it just helps molecules which I believe is in late-stage development. So I was just curious if you had any color on that. Thank you.

Mark Velleca -- Chief Executive Officer

Yes, we have. We actually presented some preclinical data a couple years ago at AACR demonstrating that G1T48 is more potent than many of the oral CERDs in development including the radius compound. That drug is in a clinical trial in a 2nd 3rd line setting, not in a first-line setting.

Raj Malik -- Chief Medical Officer and Senior Vice President, R&D

And I think just to add that the radius compound is really not a pure CERD either. I think that's also an important distinction.

Harshita Polishetty -- B Riley FBR, Inc. -- Analyst

Great. Thanks for the color, that's helpful. And congrats again.

Mark Velleca -- Chief Executive Officer

Thanks, Harshita.

Operator

No further questions. I turn the call back over to Dr. Mark Velleca.

Mark Velleca -- Chief Executive Officer.

Thank you, operator. That concludes the call. Please reach out to us with any questions. As a reminder, we'll be at the BTIT Conference on August 12th, and the Wedbush Conference on August 13th. We look forward to seeing many of you at those meetings in New York, and at ESMO, in Barcelona in late September.

...

Thank you for joining us and have a good evening.

Operator

That does conclude our conference for today. Thank you for your participation in today's conference. You may now disconnect.

Duration: 35 minutes

Call participants:

Jeff Macdonald -- Head of Investor Relations

Mark Velleca -- Chief Executive Officer

Raj Malik -- Chief Medical Officer and Senior Vice President, R&D

Jennifer Moses -- Chief Financial Officer

Christopher J Zopf -- Cowen and Company -- Research Associate

Anupam Rama -- JP Morgan -- Analyst

David Nierengarten -- Wedbush Securities -- Analyst

Harshita Polishetty -- B Riley FBR, Inc. -- Analyst

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