雅虎香港財經 G1 Therapeutics, Inc. (NASDAQ:GTHX) Q1 2024 Earnings Call Transcript
G1 Therapeutics, Inc. (NASDAQ:GTHX) Q1 2024 Earnings Call Transcript May 1, 2024
G1 Therapeutics, Inc. misses on earnings expectations. Reported EPS is $-0.2 EPS, expectations were $-0.19. GTHX isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, and thank you for standing by. Welcome to the G1 Therapeutics First Quarter 2024 Financial Results. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Will Roberts. Please go ahead.
Will Roberts : Thank you, Victor. Good morning, everyone, and welcome to the G1 conference call to discuss our first quarter 2024 financial results and business update. The press release on these financial results was issued this morning and can be found in our News section of our corporate website, g1therapeutics.com. On this morning's call, the team will provide a business overview of the 2024 first quarter, including an update on our commercial progress and clinical programs in that period with COSELA, which is approved and commercially available to decrease the incidence of chemotherapy-induced myelosuppression in adult patients when administered prior to a platinum/etoposide-containing regimen or topotecan-containing regimen for extensive stage small cell lung cancer.
A Q&A session will follow the prepared remarks. Before we begin, I want to remind you that today's webcast contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements represent management's judgment as of today, and may involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. For more information on such risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, which are available from the SEC or on our corporate website. Any forward-looking statements represent our views as of today, May 1, 2024. Joining me on the call today are Jack Bailey, our Chief Executive Officer; Andrew Perry, our Chief Commercial Officer; Dr. Raj Malik, our Chief Medical Officer; and John Umstead, our Chief Financial Officer.
I'll now turn the call over to Jack. Jack?
Jack Bailey : Thanks, Will. Good morning, everyone, and thank you for joining us on the call today. From a commercial perspective, we continue to identify and execute on growth opportunities for COSELA. As you will hear from Andrew, our vial volume growth in the quarter was 4% over the fourth quarter of 2023, due to some challenges that he will speak to shortly. But as a result of the impact of the actions we've taken and the more recent sales trend, we remain confident in our 2024 net sales guidance of $60 million to $70 million. We are committed to expanding usage of COSELA in its first indication in extensive stage small cell lung cancer, and assuming we continue to achieve our internal forecast, expect to drive G1 to profitability and cash flow positivity later next year.
Now as you'll hear from Raj, we also remain focused on the opportunity for category leadership across the spectrum of triple-negative breast cancer and in that regard, look forward to two important upcoming data readouts over the coming months. First, we've shown promising results, thus far, in our ongoing Phase 2 trial, when trilaciclib is combined with the ADC sacituzumab govitecan, including meaningful improvements in median overall and 12-month survival. As you saw this morning, we are excited to provide the updated results in a poster at ASCO 2024 in early June. Next, if the final results from our ongoing Phase 3 PRESERVE 2 trial of trilaciclib are positive, they would be amongst the most significant data generated in the first-line metastatic setting across PD-L1 status and a compelling data set for people living with this extremely aggressive disease.
As Raj will discuss, based upon recent interactions with the FDA regarding the inclusion of events from patients enrolled in Ukraine, these results are now expected late in the second quarter of this year. Finally, as you saw in our press release earlier today, we've out-licensed the global rights to lerociclib, excluding the Asia Pac region, to an early-stage transomics company called Pepper Bio. Through this transaction, Pepper Bio gains exclusive rights to develop, manufacture and commercialize lerociclib in those areas for all indications, except for certain radio-protected uses. They've identified CDK4/6 as a key pathway for hepatocellular carcinoma through their proprietary data platform. Lerociclib will now be their lead clinical stage asset to complement their early-stage discovery pipeline.
On today's call, Andrew will provide an update on our recent commercial efforts, Raj will provide the status of our ongoing TNBC trials and remind you of the timing of the data from each, John will then provide the financial results for the quarter including our revenue expense and cash expectations along with a review of financials associated with the Pepper Bio transaction. Finally, I'll be back for some concluding comments. With that, I'll turn the call over to Andrew.
Andrew Perry: Thank you, John. I'm going to take this opportunity to update you on our first quarter 2024 performance, which was a quarter where we made significant headway in parts of our commercial business. Although in other areas, we also faced some short-term challenges. Our goal in Q1 was to build on the strong double-digit quarter-over-quarter Vial growth, which we delivered in Q4 of 2023 and to setup growth opportunities which will help us deliver our full year goals. We were largely successful in these objectives with some regional and segment variances, driven by some executional headwinds which we took actions to address within the quarter. And while our Vial volume grew, it should have been closer to double-digits this quarter if we had executed better in several areas.
As a reminder, in first-line extensive-stage small-cell lung cancer, the maximum duration of chemotherapy is less than 90 days. So our quarterly growth relies on building a new patient base every quarter and then creating additional breadth and depth with newer existing accounts in order to grow. Beginning with sales volume, we ended Q1 with 4% overall Vial volume growth, compared with Q4 2023. The low growth was attributable to three factors. First, we added too few new patients over the holiday period of December and to January which then impacted the number of continuing patients through the quarter. Secondly, we have a slow start with several large customers primarily in the Southeast. These customers typically comprise a fifth of our volume and their orders were below the levels we would expect in the first part of the quarter.
Thirdly, three of our contracted customer networks performed below expectations. In each case, I will outline the actions we took to address the executional gaps. Firstly, we deployed three new sales representatives at the beginning of January. Secondly, we invested in a significant digital advertising push, with increased display ads in high-potential geographies, including the Southeast as well as the digital and field campaign focused on driving debt with existing COSELA prescribers and customers affiliated with contracted accounts. Thirdly, we met with Senior Management at our large customers in the Southeast to address any educational or operational gaps which could be slowing the sales growth. Finally, we enhanced several of our existing contracts and executed two new community network contracts including one in February which has been immediately successful in significantly growing volume.
A slow start to the year in the Southeast was offset, by almost 13% growth in our West Region which comprises around quarter of our volume. Three of six territories in the West Region grew more than 15% in the quarter. As a result of this success, we added an additional headcount in our West Region, focused on the Texas market which continues to represent an enormous opportunity. We also saw double-digit growth in the customers covered by our expanded strategic accounts function, which combines specialist knowledge of Oncology Pharmacy with extensive health systems experience. Those customers grew over 20% during the quarter and now comprise roughly 20% of our overall volume. Going into Q2, we added an additional set of customers to payer mix where we believe this team can accelerate systematic adoption.
Focusing on the top 100 customer organizations which represent around half the volume opportunity in the market, we added two new top 100 customers during Q1 and another one in April, meaning 78 of the top 100 have ordered COSELA launched to-date. 63 top 100 customers ordered during Q1, which jumped up from 56 in Q4, the highest number of top 100 customers to order in a quarter since launch. Our proportion of business in top 100 stayed similar to Q4 at 57%. Across our business, we added over 50 new accounts in total which is similar to the last few quarters. Our estimate of COSELA patient share remains around 13% in the first-line market, demonstrating that there remains significant opportunity for growth. Moving into Q2, we saw a return to stronger growth in March and April has been our highest month for both Volume and Ex-Factory sales launched to-date.
The large customers in the Southeast has started slow in Q1 are back to growth at over 30% quarter-to-date. And our contracted business is also growing in double-digits quarter-to-date. With the actions we have taken with three new top 100s and for the first time more than 60 top 100 using COSELA during the quarter, we're confident in continued growth and our guided product revenue target. I'll now pass the call to Raj.
Raj Malik: Thanks, Andrew, and good morning, everyone. Today, I will provide the status of our ongoing clinical trials and our expectations for the timing of results. For our Phase 3 PRESERVE 2 trial in combination with gemcitabine and carboplatin, as we mentioned on our last call, the boundary hazard ratio for our positive result at the final analysis of 0.67. As a reminder, the hazard ratio for the pembrolizumab arm of KEYNOTE-355 and the intent-to-treat or ITT population was 0.89. And the FDA-approved PD-L1 positive population was 0.73. So a positive result in PRESERVE 2 would mark the biggest improvement in overall survival to date in first-line metastatic triple-negative breast cancer. Regarding this trial, we recently received feedback from the FDA recommending that the final analysis should be conducted in the ITT population which includes the survival events from patients that were enrolled in the Ukraine, rather than the modified ITT population that would have excluded them.
Subsequent to our February financial results call, we reached agreement with the FDA on the statistical methodology for the overall survival analysis incorporating these events. As a result, we have amended the protocol to account for these changes and we now expect that the final overall survival analysis will be conducted at the end of the second quarter of 2024. We will announce the top line results via press release and if positive, look forward to a more robust presentation of results at a medical meeting later in 2024. Assuming we achieve the overall survival endpoint, we will meet with the FDA to discuss the results and our plans for a supplemental NDA filing as soon as possible thereafter. Next, regarding our Phase 2 trial of trilaciclib in combination with the TROP2 antibody drug conjugate Sacituzumab, we're happy to announce this morning that the updated results have been accepted for a poster presentation at ASCO in early June.
As a reminder in January, we described promising initial data including meaningful improvements in median overall survival and 12-month survival among patients receiving trilaciclib in combination with sacituzumab compared to historical results for the ADC alone and we are excited to update these initial results at ASCO. Our measure of a successful trial would be in approximately three months or more improvement in median overall survival over historical results with sacituzumab. We believe that such a result would be of interest to companies developing TROP2 ADC towards pursuing development partnerships with us to move this combination into pivotal trials, in triple-negative breast cancer and beyond. We are also very interested in exploring efficacy in various subsets of patients such as those treated with prior checkpoint inhibitors or CDK4/6 inhibitors.
These types of exploratory analyses which will be included in the ASCO results could be helpful in designing future clinical trials of trilacicilib plus TROP2 ADC combinations. We look forward to both readouts, as positive results from these trials would enable us to build category leadership in triple-negative breast cancer. With that, I'll turn the call over to John for an update on our financial results. John?
John Umstead: Thanks, Raj, and good morning, everyone. As Will mentioned, full financial results for the first quarter of 2024 are available in this morning's press release and will be in the 10-Q which we expect to file after market close. Net sales of COSELA were $14.1 million for the first quarter of 2024. This compares favorably to $10.5 million in net sales of COSELA in the first quarter of 2023, representing an increase of 34%. Our total revenue for the first quarter of 2024 was $14.5 million, which compares favorably to $12.9 million in the first quarter of 2023. Our total operating expenses were $23.5 million in the first quarter of 2024 compared to $38.7 million for the same period in 2023 comprised of the following: $1.1 million in cost of goods sold compared to $1.5 million for the same period in 2023.
$7.3 million in research and development expenses compared to $15.5 million for the same period in 2023. This change was primarily due to continued wind down of previously completed studies. And lastly $15.1 million in selling, general and administrative expenses compared to $21.8 million for the same period in 2023. The decrease in SG&A expense was primarily due to decreases in personnel costs and medical affairs and continued optimization of our commercialization activities. Regarding our cash position, we ended the first quarter with cash, cash equivalents and marketable securities of $65.2 million compared to $82.2 million as of December 31, 2023. It is important to note that this current cash balance of $65.2 million reflects an $8.7 million paydown of our debt facility during the quarter due to the borrowing base limit tied to our trailing three month revenue.
However, by reducing our principal, we will realize cash interest savings this year of almost $1 million. Based on our current revenue projections, we do not anticipate having any further paydowns until required principal payments begin in December of this year. Absent this paydown, our operational cash burn totaled approximately $8 million for the quarter. Next regarding our revenue, expense and cash runway guidance for 2024. As previously stated, we remain confident in our net sales, revenue guidance of between $60 million and $70 million for 2024. There is no change to our 2024 gross to net expense percentage estimates. We anticipate receiving a $5 million milestone payment from Genor in the back half of 2024 following their commercial approval of lerociclib in China.
If approved we would begin receiving royalties on sales of lerociclib in the territory. Regarding expenses for 2024, we currently expect operating expenses to be 15% to 20% lower than that of 2023. This is driven by reduced R&D spend in addition to continued optimization of our cost structure, following previously targeted headcount reductions, while continuing to invest in the commercial organization. We continue to expect the 2024 year-end cash, cash equivalents and marketable securities balance in the range of $50 million to $60 million. And based on the foregoing, we expect that our cash runway will take us into the third quarter of 2025. This cash runway includes anticipated TNBC filing and launch-related costs but does not include any TNBC-associated revenue.
Finally, Jack mentioned earlier in the call that we have out-licensed lerociclib to Pepper Bio, excluding the Asia Pac countries, which previously out-licensed to Genor. G1 expects to receive upfront payments of mid-single-digit millions within 12 months and we are eligible to receive up to $135 million upon achievement of certain development and commercial milestones. In addition, we will receive a double-digit royalty on aggregate annual net sales of lerociclib. With that, I'll turn the call back over to Jack for some closing comments. Jack?
Jack Bailey: Thank you, John, Raj, Andrew and Will. And as always, I also want to recognize the cancer community. We are thankful for the opportunity to be a part of your journey. Now as you heard from Andrew, we are encouraged by the continued growth and acceptance of COSELA in our top 100 accounts, the return to expected ordering patterns in April by some large customers in the Southeast after a slower than expected first quarter and the immediate impact of our strategic accounts functions. But while our commercial team continues to execute on growing the product in its first indication, our corporate focus must stay on the upcoming clinical results from our ongoing TNBC trials that a positive could build category leadership in triple-negative breast cancer.
To that end, we look forward to presenting the mature survival results from our Phase 2 trial of trilaciclib in combination with the TROP2 ADC sacituzumab at ASCO in June. We believe that an improvement in overall survival of approximately three months or more due to the addition of trilaciclib to that ADC would be a striking success and would allow us to pursue development partnerships to move the combination of trilaciclib and TROP2 ADCs into pivotal trials. Furthermore, we expect final results from our ongoing Phase 3 PRESERVE 2 trial in first-line triple-negative breast cancer late in the second quarter of this year. If positive, we would move quickly towards filing of an sNDA. Thank you for your time this morning. We will speak again in this format on the second quarter 2024 call in August, and we'll see many of you at ASCO or on our upcoming non-fill roadshows.
With that, I'll close the call and turn it over to Q&A. Operator, would you please remind our listeners how to ask a questions.
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