Logo of jester cap with thought bubble.

Image source: The Motley Fool.

G1 Therapeutics, Inc. (NASDAQ:GTHX)
Q3 2019 Earnings Call
Nov 5, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and welcome to the G1 Therapeutics' Third Quarter 2019 Financial Results Conference Call. [Operator Instructions]

I would now like to turn the conference over to your host, Mr. Jeff Macdonald, Head of Investor Relations for G1 Therapeutics. Please go ahead, sir.

Jeff Macdonald -- Senior Director of Investor Relations and Corporate Communications

Thank you, operator. Good afternoon, everyone and welcome to the G1 Therapeutics third Quarter 2019 corporate and financial 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 this call will include forward-looking statements based on current expectations. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from expected results. Please refer to our filings with the SEC, which are available on the SEC website or 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. On today's call, we'll review our progress in the third quarter and provide an update on upcoming clinical and regulatory milestones expected this year and next. These milestones provide a foundation for the successful launch of our first commercial product, trilaciclib and position lerociclib and G1T48 as important new treatment options for people living with breast cancer.

Raj will discuss data on trilaciclib and G1T48 that were presented in September at the European Society for Medical Oncology meeting or ESMO. He will also preview data on lerociclib being presented at the San Antonio Breast Cancer Symposium in December. Following Raj's comments, Jen will review the financials for quarter. Then we'll open the call for questions.

I'll begin with trilaciclib. Based on advisory board feedback, meetings with key opinion leaders and quantitative market research with healthcare professionals, we believe that trilaciclib can usher in a new standard of care that will benefit cancer patients, who received the most frequently administered chemotherapy regimens. Every year hundreds of thousands of patients experience both the benefits and negative consequences of chemotherapy. While chemo is a cornerstone of effective cancer treatment, it does not differentiate between healthy and cancer cells, showing both, including important stem cells in the bone marrow that produce white blood cells, red blood cells and platelets.

This chemotherapy induced bone marrow damage is known as myelosuppression. When white cells, red cells and platelets become depleted, patients receiving chemotherapy are at an increased risk of infection, experience anemia and fatigue and are at an increased risk of bleeding. Myelosuppression can impair a patient's ability to complete the full course of chemotherapy on schedule and often requires the administration of rescue interventions such as growth factors and blood transfusions. Patients, oncologists, and payers recognize the need to improve on what has become accepted as the unavoidable downside of chemotherapy.

Trilaciclib is positioned to address this need, making chemotherapy safer, reducing side effects, and improving the patient experience. Data from our three small cell lung cancer trials clearly demonstrate that trilaciclib can reduce myelosuppression and improve patient reported outcomes. These data were the basis for the FDA providing breakthrough therapy designation for trilaciclib. We are confident that trilaciclib has the potential to help not only those with small cell lung cancer, but also people with other tumors treated with chemotherapy.

First, I'll briefly summarize our pathway to approval in small cell lung cancer. Second, I will outline the plans for additional trials. And third, I will review the progress we are making to prepare for a successful launch. Based on written feedback from our pre-NDA meeting with the FDA in September, we are beginning a rolling NDA submission this quarter and expect to complete the filing in the second quarter of 2020. We are also planning to submit a marketing authorization application to the European Medicines Agency in the second half of 2020.

In parallel with our NDA filing for small cell lung cancer, we are working with the FDA to determine the most efficient pathway to additional labeled indications for trilaciclib. In 2020, we plan to initiate a Phase 3 trial in patients with colorectal cancer, treated with 5FU based chemotherapy with myelopreservation as a primary outcome measure.

This represents a significant opportunity to help patients. There are more than 500,000 cases of colorectal cancer globally treated with chemotherapy. The majority of which is 5FU based. Much of our pre-clinical data on trilaciclib is generated using 5FU, and this is a multi-day regimen that results in severe myelosuppression. We will also continue to explore trilaciclib's potential to improve survival in certain tumor types. Raj will review the data from our Phase 2 triple-negative breast cancer trial, which we recently presented at ESMO, showing a significant overall survival benefit in patients with TNBC treated with trilaciclib.

We are continuing to collect important data from that trial and expect to initiate an additional TNBC trial in 2020. While we are excited about the long-term potential of trilaciclib in multiple tumor types, we remain focused on the near-term opportunity to help patients with small cell lung cancer and are preparing across functions for a successful launch. I want to highlight three key areas of progress. One, commercial grade manufacturing is on track and we will have drug product ready for the earliest possible launch date. Two, we have established a medical affairs team that is meeting with patient advocates, physicians, and key external experts to discuss current clinical practice in treating myelosuppression and to respond to inquiries about trilaciclib.

And three, we are continuing to get payer insights as we approach potential approval and launch. Research by our commercial team has shown that payers recognize the value of trilaciclib as a pro active therapy that provides multiple benefits to patients. In addition, they see that it is clearly differentiated from rescue interventions that only address a single blood lineage. We expect unique product coding, which will further support payer acceptance. Our pricing philosophy will reflect the total value trilaciclib delivers to patients in the healthcare system, while supporting patient access.

We are continuing to refine our budget impact model to demonstrate the extent to which trilaciclib can reduce costs associated with myelosuppression, including reducing the use of GCSF, transfusions, antibiotics and hospitalizations, and decreasing chemotherapy dose delays and reductions. We will also share patient reported outcomes data with payers, which highlights the benefits to their members.

Turning to our other investigational therapies. We will soon have sufficient clinical data to advance both lerociclib and G1T48 into registrational trials. We presented the first clinical data of G1 -- on G1T48, our selective estrogen receptor degrader or SERD at ESMO in September. Data on lerociclib, our oral CDK4/6 inhibitor will be presented at the upcoming San Antonio Breast Cancer Symposium. Both of these therapies have the potential to improve outcomes for women with ER-positive breast cancer. Raj will provide an overview of those programs momentarily.

I want to conclude with a comment on our business development strategy. For all three of our therapeutic candidates, we believe that collaborating with partners with oncology development and commercialization expertise offers the best opportunity to make our therapeutic candidates broadly available to patients around the world. We anticipate that partnership agreements would be structured so that we can participate in commercialization in the US and a partner would be responsible for ex-US markets.

I'd now like to turn the call over to Raj to discuss recent and upcoming data presentations across our pipelines. Raj?

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

Thanks, Mark. As Mark noted, we presented important data on trilaciclib and G1T48 at ESMO in September. Today I want to focus my remarks on the findings in these data sets and how they provide a strong rationale for advancing these programs. I'll start with trilaciclib. Our Phase 2 trial of 102 patients with triple-negative breast cancer or TNBC showed that women live significantly longer when receiving trilaciclib with chemotherapy compared with chemotherapy alone. Medium overall survival for all patients treated with trilaciclib in combination with a chemotherapy regimen of gemcitabine and carboplatin was 20.1 months, compared with 12.6 months for patients receiving chemotherapy alone, with a hazard ratio of 0.36.

I'd like to take a few minutes to discuss the totality of the myelopreservation findings in this trial. And more specifically provide context for how those data are relevant to the observed overall survival benefit. To remind you, we ran four exploratory Phase 2 trials of trilaciclib concurrently in small cell lung cancer and triple negative breast cancer. We believed it was important to maintain consistent endpoints across the trials and chose duration and occurrence of severe neutropenia.

In our three small cell lung cancer trials, the mean duration of severe neutropenia and the control arms was four days and that was a statistically significant improvement for patients who received trilaciclib. By contrast, in the TNBC trial, the mean duration of severe neutropenia in the control arm was only 0.8 days. With that short duration of severe neutropenia, we did not hit the primary endpoint. However it is important to note that we did see evidence of myelopreservation in the TNBC trial. Patients in the trilaciclib arms were able to receive approximately 50% more chemotherapy, yet had similar hematologic toxicity compared to the control arm.

Also trilaciclib treated patients experienced significantly lower rates of red blood cell transfusions and patient reported outcomes data indicated that trilaciclib treated patients experienced less fatigue. The significant improvement in overall survival observed in this trial is likely driven by a combination of factors. Patients received significantly more chemotherapy, which we believe is tied to the myelopreservation benefits of trilaciclib. Additionally these myelopreservation benefits may have allowed patients to do better in subsequent lines of therapy, and we will have data on this hypothesis as we follow patients out further.

Separate from these myelopreservation benefits, trilaciclib may directly enhance the anti-tumor immune response and we have plans to further evaluate this in our next trial. The survival findings was striking and warrant further study and multiple key opinion leaders agree. Therefore, we will be initiating an additional trial in TNBC next year. We also presented the first clinical data on G1T48, our oral selective estrogen receptor degrader or SERD for treatment of ER positive HER2 negative breast cancer. Blocking signaling through the estrogen receptor is a proven way to extend survival for patients with ER positive breast cancer.

The injectable SERD, fulvestrant has proven to be more efficacious than aromatase inhibitors and first-line therapy. However fulvestrant even with superior outcomes has not moved into the adjuvant setting, because its administration requires a series of painful intramuscular injection, leaving aromatase inhibitors as a standard of care in the adjuvant treatment. Physician interviews have shown that an oral SERD would displace fulvestrant in the first line and also become a standard of care in the adjuvant setting. As ER positive disease is the most common type of breast cancer and oral SERD could benefit hundreds of thousands of people worldwide every year.

In our Phase 1 trial of G1T48, we observed a promising safety and tolerability profile with evidence of anti-tumor activity in a heavily pre-treated patient population.

With regard to safety and tolerability, the majority of adverse events were Grade 1 and there were no dose limiting toxicities and a maximum tolerated dose was not reached. Based on the findings in the dose escalation portion of this trial, we selected 601,000 milligram doses for evaluation in the ongoing Phase 2a portion of the trial. Enrollment is almost complete with 20 patients per dose level. In addition to PK, tolerability and efficacy, we are also collecting pre and post-treatment tumor biopsies in a subset of patients to directly evaluate pharmacodynamic activity within the tumor. Data from these 40 patients should allow us to select a dose to move forward into Phase 3 development.

Looking forward, we are presenting data on lerociclib at the San Antonio Breast Cancer Symposium in December. This Phase 1b/2a trial is evaluating lerociclib dosed without a holiday in combination with fulvestrant in patients with locally advanced or metastatic ER positive HER2 negative breast cancer that had progressed on prior endocrine therapy. At ASCO in 2018, we presented preliminary safety, tolerability and efficacy findings from 33 patients in the dose escalation portion of this trial. At San Antonio, we will present safety and tolerability data from 110 patients, including 66 patients from the expansion portion of the trial with a focus on 41 patients who received either 150 milligrams or 200 milligrams twice daily. Early efficacy data will be included in the poster, but it is important to note that due to the short duration of follow up for the expansion cohorts, this data is immature.

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. Full financial results for the third quarter are available in our press release and 10-Q. We reported a net loss of $32.4 million for the third quarter of 2019, compared to $19.9 million for the third quarter of 2018. Operating expenses were $34 million for the third quarter of 2019, compared to $20.8 million for the prior year period. Operating expenses included non-cash stock compensation expense of $4.4 million for the third quarter of 2019, compared to $3.3 million for the prior year period.

Research and development expenses for the third quarter of 2019 were $22.9 million compared to $15.9 million in the third quarter of 2018. The increase in expense was primarily 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 third quarter of 2019 were $11.1 million compared to $4.9 million for the prior year period. The increase in G&A expense was largely due to an increase in headcount and increase in medical affairs costs related to trilaciclib, pre-commercialization activities and an increase in other costs necessary to support our operations. As of September 30, 2019, we had $299.9 million in cash and cash equivalents on the balance sheet, compared to $369.3 million as of December 31, 2018.

We are narrowing the range of the annual guidance that we announced in June of $260 million to $270 million in cash and cash equivalents and expect to end the year with between $265 million and $270 million.

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 beginning our rolling NDA submission for trilaciclib and small cell lung cancer this quarter and expect to complete the NDA in the second quarter of 2020. We are also moving forward with additional clinical trials in colorectal cancer and triple negative breast cancer.

We are continuing to advance lerociclib and G1T48 with emerging data on both therapies to support their use as first-line treatments in breast cancer. We are in a solid financial position with sufficient cash to fund cash to fund operations well into 2021. Identifying partnership opportunities for our three clinical stage therapies is a key strategic objective with a priority on the near-term commercial opportunity for trilaciclib.

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

Questions and Answers:

Operator

Thank you, sir. And your first question comes from the line of Dane Leone with RJS.

Dane Leone -- Raymond James -- Analyst

Thanks for the update. I think all of us are starting to look toward SABCS now. So thanks Raj for setting the table a bit. I was just curious, could you maybe dive into a little bit more detail of when we look at those 110 patients in the 66 expansion phase. And then I think the 40 some odd in the dosing that you think is going to be optimal to obviate neutropenic monitoring. What cohorts do you think we'll need to focus on or have enough available follow up to focus on clinical effect. Because I think that's going to be a big question for people of, beyond neutropenic monitoring, are we seeing clinical effect that those doses at this point? Thank you.

Mark Velleca -- Chief Executive Officer

Yeah. Thanks, Dane. I'll let Raj answer that question.

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

Hey Dane, Raj here. Yeah, I think the two cohorts to focus on would be the 150 milligrams and the 200 milligrams twice a day, because one of those two doses is going to be the dose will take forward into Phase 3. As I mentioned, the efficacy data is going to be less mature, particularly given that the expansion cohorts only completed enrollment several months ago. However, obviously the safety data should be valuable.

Dane Leone -- Raymond James -- Analyst

Okay. And do you think there'll be a signal within the total 66 patient expansion phase at doses, similar to the subgroup that have more follow-up or is there going to be a good way to kind of tease out the signal for that dosage level.

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

So we will present efficacy for the entirety of the study. And certainly that will give a sense of the efficacy of lerociclib in combination with fulvestrant. My point regarding the 150 and 200 was that in those two particular dose cohorts, the duration of follow-up is relatively shorter compared to the rest of the study.

Dane Leone -- Raymond James -- Analyst

Okay. Let me just finally, so the 33 patients from ASCO will get long-term follow-up on those patients?

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

Exactly.

Dane Leone -- Raymond James -- Analyst

Okay, all right, that's all I've got. Okay.

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

Well, yeah, absolutely. The -- every single patient has been enrolled in the study so far, will be included in the efficacy. So, if you will see the efficacy for the entirety of the enrolled population.

Dane Leone -- Raymond James -- Analyst

Okay. And sorry I misheard it, was it about 40 patients at 150 mg and 200 mg PID [Phonetic].

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

41 combined, yes.

Dane Leone -- Raymond James -- Analyst

Okay, all right, thank you so much.

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

Sure.

Operator

Your next question comes from the line of Anupam Rama with JPMorgan.

Anupam Rama -- JPMorgan -- Analyst

Hey guys, thanks for taking the question and congrats on all the progress. Just a quick one from me. Can you remind us of the timelines for completing the various portions of the NDA submission for trilaciclib in small cell and remind us if there are any outstanding gating factors on the pre-clinical side that needs to be completed before the submission can complete.

Mark Velleca -- Chief Executive Officer

Thanks, Anupam, it's Mark. Now we are on track, are actually starting the rolling process this quarter. All of the pre-clinical take to your specific point done that will be among the first things we file and expect to have everything out filed in the second quarter.

Anupam Rama -- JPMorgan -- Analyst

Great. Thanks for taking my question.

Operator

Your next question comes from the line of Chris Shibutani with Cowen.

Chris Shibutani -- Cowen & Company -- Analyst

Great, thanks very much. Two questions if I may, for trial, the TNBC trial that you're planning on initiating in 2020, can you highlight for us any distinctions in terms of the design of that trial that you hope it might be informing a little bit more in terms of how you can replicate the benefit that you saw in the first trial, and in particular what sort of data points might help us better understand the factors that were driving the overall survival benefit. Is there something about the trial design that is distinctive that you can share with us.

Mark Velleca -- Chief Executive Officer

Thanks, Chris. I'll let Raj take that.

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

Yeah. Hey, Chris. So there are really two data points that I've got to inform the design of the next trial. And so one of them comes from our trial of course with longer duration of follow-up, we will get information on subsequent therapies that patients got. Another important data point is looking at tumor PD-L1 expression and how patients did in our TNBC trial if the tumors were PD-L1 positive or PD-L1 negative. The second important data point is of course the KEYNOTE-355 study where KEYTRUDA is being tested in combination with three different chemo regimens.

And so there are a couple of points here. Important one due to the see activity in entire patient population are only in the PD- L1 positive population, similar to what was seen with a T-cell. And the second of course is which chemo backbone is -- are they all equivalent or is one better than the other. So I think all of those factors, need to be taken into account in the design of the next study of course then followed with regulatory discussions.

Chris Shibutani -- Cowen & Company -- Analyst

Great. And then if I could follow up on the world of SERD. One -- this is an area, which we've seen increasing levels of activity across the industry just this afternoon, update from one of the competing agents allows the [Phonetic] from Radius, they announced that they are not going to be doing any further clinical development themselves beyond their current Emerald study and are looking for strategic options there. This is an area that seems to have had development run into some issues, a lot of companies are going after this, love to get your initial thoughts to that news, and how you feel your planning to see if you can optimize your own probability of success.

Mark Velleca -- Chief Executive Officer

Yeah. Thanks, Chris. I can't comment on the specific regions for the decision by Radius. I can comment that we believe that the profile that we've been able to show at ESMO and continuing data that we gather from the dose expansion cohorts, that the tolerability profile for 48 shows that we've been able to overcome. Again some of the GI, LFT, cardiac issues that have shown in other products that were in development.

We are aware of other competitors and we are keen to see data. We've seen the Sanofi, SERD at ASCO. We expect to see the third generation [Indecipherable] SERD at San Antonio. And we're aware of AZ has a second generation compound, but we remain confident in the validated mechanism of a SERD given that the efficacy of all the strength and that a well-tolerated, oral SERD could supplant fall of strength in first-line and ultimately move into the adjuvant setting.

Chris Shibutani -- Cowen & Company -- Analyst

Great. It certainly does seem to be an attractive opportunity. Good luck with your continued progress. Thanks for your responses.

Mark Velleca -- Chief Executive Officer

Thank you.

Operator

Your next question comes from the line of Chad Messer with Needham & Company.

Chad Messer -- Needham & Company -- Analyst

Great, good evening, and thanks for taking my questions. If you could just start with one on lero. I was wondering if you guys had any idea, it's probably be Raj, if someone did what the other CDK46 inhibitor data kind of looked like at this stage in development, if it indeed was presented at all.

Mark Velleca -- Chief Executive Officer

Thanks, Chad. Go ahead, Raj.

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

Yeah, hey, Chad. Yeah, I think the closest study, I would say it would be Paloma 3, the combination of palbociclib and fulvestrant. There is data now of course with all four six inhibitors plus fulvestrant as well. But we designed our study closest to the PALOMA 3 in terms of eligibility. So that will be the study, I would refer to.

Chad Messer -- Needham & Company -- Analyst

All right, great. Thanks for that. Then on trila. So as Dr. O'Shaughnessy sort of ended presentation with some data on ex-vivo, CD8 T-cell responses, kind of, to support this idea, you're talking about a potential immune activation. And then also talked about something you were talking about on this call, which is looking into the PD-L1 status, are those two things that sort of just of the biomarker effort going on right now. Are there other things that are worth looking at that would sort of give you an idea of whether we or indeed preserving boosting immune activity?

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

Yes, we are looking at other -- we did peripheral blood immuno phenotyping and what we presented was data from the analysis of T-cells simulated ex-vivo. We are looking at other immune cells in the peripheral blood as well. Such as the myeloid compartment. So those analyzes are ongoing. And I mentioned the PD-L1 as well, I think that's going to be important, not only to understand the -- where we saw efficacy with trilaciclib but could also help in future development.

Chad Messer -- Needham & Company -- Analyst

Okay. And then just on the development plans for trial, I kind of picked up on a slight change of wording and maybe it's nothing but I'll ask you guys about it. At ESMO in September you're talking about a Phase 3 TNBC trial and now you're talking about the trial. Are we considering more potential options for how to go forward or am I over reading this?

Mark Velleca -- Chief Executive Officer

Yeah, I'll take that one. It's Mark. We are considering all options, and to Raj's point, we really want to see the KEYNOTE data. We had expected to see it this year, we may now not see it until the middle of next year. We don't want to delay the next trial. Hence that small change in language.

Chad Messer -- Needham & Company -- Analyst

Okay, all right. Thanks so much.

Operator

Your next question comes from the line of Tom Shrader with BTIG.

Tom Shrader -- BTIG -- Analyst

Good afternoon and thanks for taking the question. It's really a follow-up -- quick follow-up on what Chad just asked, but if you approach the FDA in triple-negative, this is kind of a straight oncology drug. So, will you move within the agency? Will you talk to them as a hybrid drug? Just your thoughts, because it's really kind of a different drug now.

Mark Velleca -- Chief Executive Officer

Yeah, we actually have already begun a dialog with the oncology division. So prior to the TNBC data, our interactions have been with the hematology division but we now have opened up a dialog with the oncology division and will continue that dialog to discuss our ideas for this next trial.

Tom Shrader -- BTIG -- Analyst

Yeah, OK, great. Thank you.

Mark Velleca -- Chief Executive Officer

Any other questions, operator.

Operator

I'm showing no further questions at this time, I would like to turn the conference back 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 will be at the Stifel Conference later this month, and at the Evercore ISI conference in early December. We look forward to seeing many of you at those meetings. Thank you for joining us and have a good evening.

Operator

[Operator Closing Remarks]

Duration: 32 minutes

Call participants:

Jeff Macdonald -- Senior Director of Investor Relations and Corporate Communications

Mark Velleca -- Chief Executive Officer

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

Jennifer Moses -- Chief Financial Officer

Dane Leone -- Raymond James -- Analyst

Anupam Rama -- JPMorgan -- Analyst

Chris Shibutani -- Cowen & Company -- Analyst

Chad Messer -- Needham & Company -- Analyst

Tom Shrader -- BTIG -- Analyst

More GTHX analysis

All earnings call transcripts

AlphaStreet Logo