Logo of jester cap with thought bubble.

Image source: The Motley Fool.

G1 Therapeutics, Inc. (NASDAQ:GTHX)
Q4 2019 Earnings Call
Feb 26, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the G1 Therapeutics Fourth Quarter and Full Year 2019 Financial Results. [Operator Instructions] Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions].

I'd now like to turn the conference over to your host, Jeff Macdonald, Senior Director of Investor Relations. Please go ahead.

Jeff Macdonald -- Senior Director of Investor Relations

Thank you, operator. Good afternoon, everyone, and welcome to the G1 Therapeutics Fourth Quarter and Full year 2019 Corporate 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'd 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 from the SEC or on our corporate website for information concerning risk factors that could affect the company.

And now, I'll 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 Raj, Jen and I will highlight our key achievements in 2019, discuss the clinical and regulatory priorities and milestones expected in 2020 and review the financials. I'll conclude with additional comments on our corporate strategy moving forward, after which we'll open the call for questions.

I'll begin with the key milestones that we achieved in 2019. First, we received breakthrough therapy designation for trilaciclib, based on compelling myelopreservation data across three randomized trials in small cell lung cancer. And we are on-track to file an NDA and an MAA for small cell lung cancer this year.

Second, data from our Phase II trial in triple-negative breast cancer showed a significant overall survival benefit in patients receiving trilaciclib along with chemotherapy. These findings support further evaluation of trilaciclib in TNBC as well as other breast cancer subtypes.

Third, we announced promising early data on rintodestrant, formerly G1T48, our oral selective estrogen receptor degrader or SERD. We believe that rintodestrant's preliminary safety and tolerability profile could have advantages over the competition particularly in the adjuvant setting. Based on our findings to-date, we are investing in further development of rintodestrant as a potential best-in-class treatment for ER-positive HER2-negative breast cancer.

Lastly, additional data on our oral CDK4/6 inhibitor lerociclib showed a differentiated profile from other drugs in the class. Coming back to trilaciclib our most significant accomplishment in 2019 was establishing a clear regulatory pathway. We received feedback from the hematology division of the FDA that the positive myelopreservation data from our three randomized Stage II, small cell lung cancer trials support an NDA filing. We began a rolling NDA submission in the fourth quarter of 2019, which we expect to complete in the second quarter of this year.

As a reminder, we've been engaged with the heme division since the beginning of the trilaciclib program. This is the division that reviewed and approved the growth factors, G-CSF and erythropoietin more than 20 years ago, which was the last significant advancement in treating myelosuppression.

We believe that trilaciclib can improve patient care in a straightforward and valuable way by preserving bone marrow immune system function during chemotherapy. Administering trilaciclib prior to chemo protects the marrow, rather than the current practice of using growth factors to attempt to rescue a marrow that has already been damaged by chemo.

We've had productive discussions with National Health Authorities in Europe regarding the small cell lung cancer data. Similar to the US, we received feedback that our existing data supports the filing and we plan to submit a marketing authorization application to the European Medicines Agency in the fourth quarter of 2020. In parallel to the submission of regulatory filings for small cell lung cancer, we are executing a robust development plan that will evaluate trilaciclib's potential benefits in colorectal and breast cancer.

I'd now like to turn the call over to Raj to discuss our development plans for trilaciclib, as well as to provide an update on rintodestrant and lerociclib. Raj?

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

Thanks Mark. I'm going to focus my remarks on our development and regulatory plans for 2020. I'll start with trilaciclib. We have already begun our rolling NDA submission for small cell lung cancer and are on-track to complete the filing in the second quarter. The FDA has 60 days to decide whether to accept the filing for review. So we anticipate providing a status update in the third quarter including the PDUFA date.

Concurrently, we're working on a marketing authorization application or MAA for submission in Europe. We've had several interactions with National Health Authorities, who confirms that our data package is sufficient to file an MAA and we have been assigned a rapporteur and co-rapporteur. There is significant overlap between the content required for the NDA and the MAA and we expect to file the MAA in the fourth quarter of 2020.

We are excited to have an opportunity to make trilaciclib available to patients with small cell lung cancer. At the same time, we are initiating additional trials this year to evaluate the potential benefits of trilaciclib in other tumors and with additional chemotherapy regimens.

We plan to initiate a Phase III trial in patients with colorectal cancer treated with 5-FU based chemotherapy in the fourth quarter of 2020 with myelopreservation as the primary outcome measure. This represents a significant opportunity to help patients. Globally, there are more than 500,000 cases of colorectal cancer treated with chemotherapy each year, the majority of which is 5-FU based. Much of our preclinical data on trilaciclib was generated using 5-FU and this is a multi-day treatment regimen used to treat a variety of GI tumors that results in severe myelosuppression.

In addition, trilaciclib was accepted into the long-standing and successful I-SPY 2 breast cancer trial. Trilaciclib will be evaluated for neoadjuvant treatment of locally advanced breast cancer including ER-positive HER2-positive and triple-negative disease in combination with a standard chemotherapy regimen with or without a PD-1 checkpoint inhibitor.

The primary endpoint of the trial is pathological complete response rate, which has been shown to correlate with event-free survival in triple-negative disease. We'll also obtain adverse event data to assess myelopreservation effects. We expect data from both the colorectal and I-SPY trials in late 2022 to early 2023.

Moving to rintodestrant. At the ESMO 2019 Congress, we reported preliminary dose escalation data from our Phase I/IIa trial demonstrating a potential best-in-class safety and tolerability profile with evidence of anti-tumor activity in a heavily pretreated patient population.

In the fourth quarter of 2019, we fully enrolled additional study cohorts evaluating dosing at 600 and at 1,000 milligrams. Data from these cohorts are being used to establish our go-forward dose. We anticipate reporting preliminary data from all 67 patients, both the dose escalation and dose expansion cohorts in the fourth quarter this year. We are initiating an additional arm of this trial to evaluate the combination of rintodestrant and the CDK4/6 inhibitor palbociclib or Ibrance. We expect to begin enrolling patients with this combination in the second quarter of this year.

As previously disclosed, we are completing our lerociclib breast cancer and non-small cell lung cancer trials. Our ER-positive HER2-negative breast cancer trial in combination with fulvestrant showed promising safety and tolerability data that is differentiated from other CDK4/6 inhibitors with a comparable efficacy profile. We plan to report updated safety and efficacy data in the third quarter of this year.

Data from our trial with Tagrisso in non-small cell lung cancer showed that the combination was well tolerated. Given the robust treatment effect of Tagrisso monotherapy, the data are not mature enough to evaluate the antitumor efficacy of the combination regimen. We believe that lerociclib has the potential to benefit patients in combination therapy across a range of cancer types. We do not plan to initiate additional lerociclib trials ourselves and are focusing on resources on trilaciclib and rintodestrant.

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 fourth quarter and full year 2019 are available in our press release and 10-K.

We reported a net loss of $35.4 million for the fourth quarter of 2019, compared to $24.1 million for the fourth quarter of 2018. Net loss for the full year 2019 was $122.4 million, compared to a net loss of $85.3 million for the prior year.

Operating expenses were $36.6 million for the fourth quarter of 2019, compared to $26.1 million for the fourth quarter of 2018. GAAP operating expenses, include stock-based compensation expense of $4.5 million for the fourth quarter of 2019, compared to $3.3 million for the fourth quarter of 2018. Operating expenses for the full year of 2019 were $129 million, compared to $89.3 million in the prior year. Stock-based compensation expense for the full year 2019 was $16.4 million, compared to $10.2 million for the prior year.

Research and development expenses for the fourth quarter of 2019 were $24.5 million, compared to $19.1 million for the fourth quarter of 2018.

R&D expenses for the full year 2019 were $89 million, compared to $70.7 million for the prior year. The increase in R&D expenses was primarily due to an increase in clinical program costs, costs for manufacturing active pharmaceutical ingredients and personnel costs due to additional headcount.

General and administrative expenses for the fourth quarter of 2019 were $12.1 million, compared to $7 million for the fourth quarter of 2018. G&A expenses for the full year 2019 were $40 million, compared to $18.6 million for the prior year. The increase in G&A expenses was largely due to an increase in compensation, due to additional headcount increase in pre-commercialization activities, increase in medical affairs costs and an increase in professional fees and other administrative costs necessary to support our operations.

As of December 31, 2019, we had $269.2 million in cash and cash equivalents on the balance sheet, compared to $299.9 million as of September 30, 2019 and $369.3 million as of December 31, 2018. We expect that this cash will be sufficient to fund our operations into the second half of 2021.

As noted in the press release, we are providing 2020 guidance and expect to end the year with $110 million to $130 million in cash and cash equivalents. We expect our cash burn will increase this year compared to 2019, primarily due to investments required to complete US and European regulatory filings for trilaciclib and prepare for a successful commercial launch in the US. This guidance does not include consideration of proceeds from partnerships, collaboration activities or other sources of capital that we may realize in 2020.

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

Mark Velleca -- Chief Executive Officer

Thanks, Jen. In summary, a very productive 2019 has created opportunities in 2020 for our company to advance therapies that can improve patient care and create value for shareholders. Our top priorities are getting trilaciclib to patients with small cell lung cancer that need better treatment options and the continued evaluation of trilaciclib in other tumor types and additional chemotherapy regimens.

Our vision for trila is that, patients across a broad range of solid tumor types will receive trilaciclib the first time and every time they are treated with chemotherapy. Clinical and patient-reported outcomes data have shown that trilaciclib has the potential to make chemotherapy safer, improve the patient experience and in some settings help patients live longer. Based on our market research and interactions with relevant stakeholders, we believe that these benefits will be recognized and highly valued by patients, healthcare providers and payers.

Our first opportunity to demonstrate this value to patients is in small cell lung cancer. G1 is well positioned to launch trilaciclib in the US and retain full commercial rights, while we continue to unlock the value of trilaciclib's potential in colorectal and breast cancer. Treatment of the approximately 30,000 patients with small cell lung cancer in the US is concentrated in large community oncology practices. Therefore, we can efficiently and effectively provide education to providers about the benefits of this unique breakthrough therapy. We will have much more to say about our launch plans in the US over the course of 2020. We will continue discussions with potential ex-US partners as we do not plan to build out infrastructure outside the US.

Turning to rintodestrant. We believe rintodestrant has best-in-class potential among the oral SERD's in development. We plan to advance rintodestrant through additional clinical development milestones, including evaluation of its use in combination with palbociclib. We are making significant investments in trilaciclib and rintodestrant, which is where we believe we can benefit patients most and where the investment of resources can achieve the most timely returns.

Lerociclib has shown a clinical profile that is differentiated from other CDK4/6 inhibitors and we are exploring partnerships that will enable further development while we focus on trila and rinto. We entered 2020 in a strong financial position to make these investments. We have sufficient cash to fund operation into the second half of 2021 and we continue to explore non-dilutive opportunities to further capitalize the company.

We are particularly excited about the pending FDA review of trilaciclib and the near-term opportunity to bring this breakthrough therapy to patients. Trilaciclib is the first and only therapy with the potential to significantly improve the chemo experience, which is acutely needed by patients who suffered through the immediate and long-term consequences of myelosuppression. We need to do better for these patients. We believe that trilaciclib offers patients and physicians a solution that they have been lacking for far too long.

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

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Dane Leone from Raymond James. Please ask your question.

Dane Leone -- Raymond James -- Analyst

Hi. Thank you. Congrats on a very productive 2019 and a great update on 2020. I just had a couple of questions. The first one, could you just kind of provide a little bit more color when you got to the clinical supply agreement with Pfizer and to what extent does that play out? Is it just for this study? Or would it be into additional studies or more advanced studies as well? And then I just have a few following that.

Mark Velleca -- Chief Executive Officer

Yeah. The current supply agreement is for the current study, which as we disclosed previously, is about 40 patients.

Dane Leone -- Raymond James -- Analyst

Okay. And is there any plans to further discuss that? Or is there anything built into that to extend that into a more advanced study? Or is it just, I guess, a step-by-step process?

Mark Velleca -- Chief Executive Officer

Yes, step-by-step process for now. a nonexclusive supply agreement.

Dane Leone -- Raymond James -- Analyst

Okay. Great. In terms of the partnerships for lerociclib, what kind of makes sense to your team? Are you looking for partnerships in more of the traditional CDK4/6 development area? Or are you looking to be more creative in other areas where a CDK4/6 inhibitor could make sense?

Mark Velleca -- Chief Executive Officer

I think both. We're certainly looking ex-US and kind of the traditional 4/6 space, i.e. breast cancer, but also acknowledging that 4/6 could play a role in other tumor types. So I think it's fair to say we're exploring both.

Dane Leone -- Raymond James -- Analyst

Okay. And then just finally on trilaciclib. Late last year you had talked about partnerships with that program and it seems to be alluding that you would like to retain full rights in the US here and explore a partnership ex-US. Given your file or you planning to file in the fourth quarter with EMA, when are you still guiding for a partnership of trilaciclib during 2020 or has that changed?

Mark Velleca -- Chief Executive Officer

So we do have time to explore partnership opportunities ex-US. As you alluded, we are going to file the MAA in the fourth quarter. There's an 18-month clock on approval. So we do have time to make sure we're doing the right deal that's in the best interest of shareholders.

Dane Leone -- Raymond James -- Analyst

Okay. Thank you very much.

Operator

Your next question comes from the line of Anupam Rama from JPMorgan. Your line is now open.

Tessa Romero -- JP Morgan -- Analyst

Hi, guys. This is Tessa on the call today for Anupam. Hope you guys are well and thanks for the updates and taking our question. Just one from me on trilaciclib in the US. Mark, you alluded to this a little bit, but on your education kind of initiatives, but perhaps you can just remind us what pre-commercial activities are currently ongoing? And then how are you thinking about sort of the size and the scope of the sales force that is needed for an initial launch here in the US? Thanks so much.

Mark Velleca -- Chief Executive Officer

Sure. Thanks Tessa for the question. Yeah, education is very important for trilaciclib, so that's providers not just oncologists, but practice administrators, nurses and pharmacists can understand the impact that myelosuppression has on their practice in small-cell lung cancer patients as the novelty of trilaciclib.

We have a field force of medical science liaison, educating, again, both oncologists and nurses and others at these large centers where you see a lot of small-cell lung cancer, especially in the southeast and the southwest. We know these providers and these sites very well. Many of them enrolled patients in our three small-cell lung cancer studies. So we believe that this is a list we can do on our own with a sales force that's less than 50 people.

Tessa Romero -- JP Morgan -- Analyst

Great. Thanks so much for taking my questions.

Operator

Your next question comes from the line of Chris Shibutani from Cowen. Your line is now open.

Chris Shibutani -- Cowen & Co -- Analyst

Thank you very much. Good afternoon. Thanks for the questions. With trila and thinking about other indications in particular for colon, you've talked about how we're going to be doing additional work. Can you confirm that you've had discussions that assure you in terms of what exactly needs to happen, for instance, in indications like colon to continue to further expand the label, particularly in terms of trial size and what sort of accumulated data points you'll need in order to be considered by the FDA sufficient to continue to expand to additional opportunities like colon and others that you have -- you're contemplating?

Mark Velleca -- Chief Executive Officer

Yeah. Thanks Chris. I'll let Raj take that question. Raj?

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

Yeah. Hi, Chris. Yeah, so we have plans to meet with the FDA, as well as European country authorities to discuss the protocol and gain agreement on the endpoints as you said for approval in colorectal cancer, including study size and all the critical design parameters. So that will all be agreed to before we start the study later this year.

Chris Shibutani -- Cowen & Co -- Analyst

Got it. And then to follow-up, on rinto where I believe you talk about being able to have some initial preliminary data on the fourth quarter of '20. Just to be clear, will that include any data of rinto in combination with palbo at that point?

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

No. It will really be additional -- it will be data on the cohort that we previously presented, which is the dose escalation, as well as the expansion cohort. So in total, approximately 65 patients worth of data from that portion of the study.

Chris Shibutani -- Cowen & Co -- Analyst

Great. Thank you very much.

Operator

Your next question comes from the line of Tom Shrader from BTIG. Please ask your question.

Tom Shrader -- BTIG -- Analyst

Good morning. Thanks for taking the question. I've kind of a remedial question on I-SPY. So you have three different types of breast cancer, it sounds like four treatment arms. Are they all mixed for some size cohorts and then cohorts graduate? Does it still work that way? And the real question is, what's the most data you could get in any cancer treatment line combination at the end of this trial? And is it enough to consider -- to be considered an accelerated package?

Mark Velleca -- Chief Executive Officer

Raj?

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

Tom. Yeah. So I-SPY is a platform trial with the goal of bringing in novel agents that can improve the efficacy of the backbone chemotherapy. And the way its set up is, patients are enrolled into the ER-positive, HER2-positive as well as triple-negative setting. In addition, there are some other biomarkers that are part of that stratification.

This is an adaptive design and so the data is continuously evaluated as each arm -- as patients complete chemotherapy, have surgery and then an evaluation is made about whether there was pathological complete response within the respected specimen, then since the endpoint is [Indecipherable] there is a comparison to the control arm and this adaptive type of design is what results in a predictive probability and the graduation probability that I-SPY as stated is that, if a experimental arm has a predictive probability of 85% or higher then it would succeed against that same arm in the Phase III, that arm then graduates.

So that's what happened, for example, with KEYTRUDA which then Merck took forward into their KEYNOTE-522 study in the neoadjuvant setting in TNBC, which resulted in a positive study. So it's really a very -- it's a very good way of assessing the -- where to focus a Phase III with the highest probability of success. It is a Phase II study, so this will also -- these data will not be sufficient for registration.

Tom Shrader -- BTIG -- Analyst

But so graduation is a blend of cohort size and treatment effect. It's a probability?

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

Correct. Correct. And the way it works is, if there are certain arms that don't have enough activity, they're shut down and patients are enrolled to those arms where activity is seen. And that's our internal adaptive portion of the design.

Tom Shrader -- BTIG -- Analyst

All right. Great. Thank you very much.

Operator

Your next question comes from the line of Chad Messer from Needham & Co. Please ask your question.

Chad Messer -- Needham & Co. -- Analyst

Great. Thanks. Good evening, and let me add my congratulations on a great 2019. For rinto, as we get now into combination studies, which is where we've always wanted to be. Can you discuss what you think the sort of efficacy bar is there for -- I mean, just kind of for oral SERD in general?

Mark Velleca -- Chief Executive Officer

I think in combination, Chad, its Mark here. In combination since we are now doing a study with palbociclib, you can take from PALOMA-3 as a reasonable bar. That was with fulvestrant. And our view is that, efficacy equivalent to fulvestrant is sufficient because the real benefit to patients we believe with an oral SERD is in the adjuvant setting. So good tolerability, good safety is critical, therefore, in the adjuvant setting as well, with efficacy that's equivalent to fulvestrant. So I think fulvestrant is a reasonable benchmark for this -- these 40 patients that we're enrolling with palbociclib.

Chad Messer -- Needham & Co. -- Analyst

Okay. Right. And then for trila, I know you talked about having a lot of preclinical data with 5-FU and that being a big part of the rationale for colorectal. But can you just kind of go through the heme tox profile of 5-FU, maybe compare and contrast it a little bit with the two platinum regimens in small cell? Are there different -- are there similarities and/or differences between the heme tox?

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

Yeah. So the regimen that we'll be using is actually a combination between 5-FU and oxaliplatin and irinotecan. So it's a combination regimen called FOLFOXIRI. And the myelotoxicity of this regimen is, I would say, I would equate it to the first-line small cell lung cancer type of toxicity, the topotecan i.e. the etoposide/carboplatin regimen in first line. Topotecan in second/third-line is much more toxic.

Chad Messer -- Needham & Co. -- Analyst

All Right. Great. Thank you.

Operator

[Operator Instructions] There are no further questions at this time. I will now turn the call over back to Dr. Mark Velleca for his closing remarks.

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 Cowen, Raymond James and Barclays conferences in the coming weeks. We look forward to seeing many of you at those meetings. Thanks for joining us and have a good evening.

Operator

[Operator Closing Remarks]

Duration: 31 minutes

Call participants:

Jeff Macdonald -- Senior Director of Investor Relations

Mark Velleca -- Chief Executive Officer

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

Jennifer Moses -- Chief Financial Officer

Dane Leone -- Raymond James -- Analyst

Tessa Romero -- JP Morgan -- Analyst

Chris Shibutani -- Cowen & Co -- Analyst

Tom Shrader -- BTIG -- Analyst

Chad Messer -- Needham & Co. -- Analyst

More GTHX analysis

All earnings call transcripts

AlphaStreet Logo