G1 Therapeutics, Inc. (GTHX) CEO Mark Velleca on Q3 2019 Results - Earnings Call Transcript

Nov. 05, 2019 10:07 PM ETG1 Therapeutics, Inc. (GTHX)
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G1 Therapeutics, Inc. (NASDAQ:GTHX) Q3 2019 Earnings Conference Call November 5, 2019 4:30 PM ET

Company Participants

Jeff Macdonald - Head, Investor & Public Relations

Mark Velleca - CEO, President & Director

Rajesh Malik - Chief Medical Officer and SVP, R&D

Jennifer Moses - CFO

Conference Call Participants

Dane Leone - Raymond James & Associates

Anupam Rama - JPMorgan Chase & Co.

Chris Shibutani - Cowen and Company

Chad Messer - Needham & Company

Thomas Shrader - BTIG


Good afternoon, ladies and gentlemen, and welcome to the G1 Therapeutics Third Quarter 2019 Financial Results Conference Call. [Operator Instructions]. As a reminder, this conference call is being recorded.

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

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 to Mark.

Mark Velleca

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 Roger's comments, Jen will review the financials for the 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 health care professionals, we believe that trilaciclib can usher in a new standard of care that will benefit cancer patients who receive 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 III trial in patients with colorectal cancer treated with 5-FU-based chemotherapy with myelopreservation as the 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 5-FU based. Much of our preclinical data on trilaciclib is generated using 5-FU, 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 II 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 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 proactive 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 coating, which will further support payer acceptance.

Our pricing philosophy will reflect the total value trilaciclib delivers to patients in the health care 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 G-CSF, 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 selected 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 both programs momentarily.

I want to conclude with a comment on our business development strategy. For all 3 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 U.S. and a partner would be responsible for ex U.S. markets.

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

Rajesh Malik

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 datasets and how they provide a strong rationale for advancing these programs. I'll start with trilaciclib. Our Phase II 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. Median overall survival for all patients treated with trilaciclib in combination with the 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 4 exploratory Phase II trials of trilaciclib concurrently in small cell lung cancer and triple-negative breast cancer. We believe it was important to maintain consistent endpoints across the trials and chose duration and occurrence of severe neutropenia. In our 3 small cell lung cancer trials, the mean duration of severe neutropenia in the control arms was 4 days, and there 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 antitumor immune response, and we have plans to further evaluate this in our next trial. The survival findings were 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 in 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 injections, 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, an oral SERD could benefit hundreds of thousands of people worldwide every year.

In our Phase I trial of G1T48, we observed a promising safety and tolerability profile with evidence of antitumor activity in a heavily pretreated patient population. With regard to safety and tolerability, the majority of adverse events were Grade 1, and there were no dose-limiting toxicities, and the maximum tolerated dose was not reached. Based on the findings in the dose escalation portion of this trial, we selected 600 milligram and 1,000 milligram doses for evaluation in the ongoing Phase IIa 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 III development.

Looking forward, we are presenting data on lerociclib at the San Antonio Breast Cancer Symposium in December. This Phase Ib/IIa 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 has 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

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 noncash 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

Thanks, Jen. A quick summary before we go to Q&A. We are beginning our rolling NDA submission for trilaciclib in 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 operations well into 2021. Identifying partnership opportunities for our 3 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.

Question-and-Answer Session


Your first question comes from the line of Dane Leone with RJAS.

Dane Leone

Thanks for the update. I think all of us are starting to look towards 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 and the 66 in an 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 -- like 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 at those doses at this point?

Mark Velleca

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

Rajesh Malik

Dane, Raj here. Yes, I think the two cohorts to focus on would be the 150 milligrams and the 200 milligrams twice a day because while those two doses is going to be the dose we'll take forward into Phase III. 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 evaluable.

Dane Leone

Okay. And do you think there will 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?

Rajesh Malik

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 milligrams and 200 milligrams was that in those 2 particular dose cohorts, the duration of follow-up is relatively shorter compared to the rest of the study.

Dane Leone

Okay. Just finally. So the 33 patients from ASCO will get long-term follow-up on those patients?

Rajesh Malik


Dane Leone

Okay. All right. That's what I was looking at.

Rajesh Malik

Yes. Well, yes. No, absolutely. The every single patient who has been enrolled in the study so far will be included in the efficacy. So you will see the efficacy for the entirety of the enrolled population.

Dane Leone

Okay. And sorry, I misheard it. Was it about 40 patients at 150 mg and 200 mg BID?

Rajesh Malik

41 combined, yes.


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

Anupam Rama

Congrats on all the progress. Just a quick one for me. Can you remind us of the time line 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 preclinical side that need to be completed before the submission can complete?

Mark Velleca

Yes. Thanks, Anupam. It's Mark. We're on track, are actually starting the rolling process this quarter. All of the preclinical, to your specific point, done. That will be among the first things we file and expect to have everything else filed in the second quarter.


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

Chris Shibutani

Two questions, if I may. For trilaciclib, 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 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 that overall survival benefit? Is there something about the trial design that is distinctive that you can share with us?

Mark Velleca

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

Rajesh Malik

Yes, Chris. So there are really 2 data points that are going 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 3 different chemo regimens. And so there are a couple of points here of importance. One, do they see activity in the entire patient population or only in the PD-L1-positive population similar to what was seen with atezo? 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

Great. And then if I could follow-up in the world of SERDs. One, this is an area where we've seen increasing levels of activity across the industry. Just this afternoon, update from one of the competing agents, elacestrant 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. I'd love to get your initial thoughts to that news. And how you feel you're planning to see if you can optimize your own probability of success?

Rajesh Malik

Yes. Thanks, Chris. I can't comment on the specific reasons for Radius' -- 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 this -- 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 Roche SERD at San Antonio, and we're aware that AZ has a second-generation compound. But we remain confident in the validated mechanism of SERD, given that the efficacy of fulvestrant and that a well-tolerated oral SERD could supplant fulvestrant in first line and ultimately move into the adjuvant setting.

Chris Shibutani

Great. It certainly does seem to be an attractive opportunity, good luck with your continued progress.

Rajesh Malik

Thank you.


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

Chad Messer

If we could just start with one on lero. I was wondering if you guys had any idea as probably be -- Raj or someone did, what the other CDK4/6 inhibitor data kind of looks like at this stage in development, if it indeed was presented at all?

Mark Velleca

Thanks, Chad. Go ahead, Raj.

Rajesh Malik

Chad, I think the closest study, I would say, would be the PALOMA-3, the combination of palbociclib and fulvestrant. There is data now, of course, with all 4/6 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

All right, great. And then on trila. So at ESMO, 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 of 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's sort of gist of the biomarker effort going on right now? Or are there other things that are worth looking at that would sort of give you an idea of whether we are indeed preserving or boosting immune activity?

Rajesh Malik

Yes. We are looking at other -- we did peripheral blood immunophenotyping. And what we presented was data from the analysis of T cells stimulated ex vivo. We are looking at other immune cells in the peripheral blood as well, such as the myeloid compartment. So those analyses 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

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

Mark Velleca

No, 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.


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

Thomas Shrader

It's really a follow-up, quick follow-up of 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

Yes. We actually have already begun a dialogue 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 dialogue with the oncology division, and we'll continue that dialogue to discuss our ideas for this next trial. Any other questions, operator?


I am showing no further questions at this time. I would like to turn the conference back to Dr. Mark Velleca.

Mark Velleca

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.


Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.

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