G1 Therapeutics Inc (GTHX) 2017 Q4 法說會逐字稿

Welcome to the G1 Therapeutics Q4 2017 Financial Results.

(Operator Instructions)

As a reminder, today's program may be recorded.

I would now like introduce your today's program, Jeff Macdonald, Head of Investor and Public Relations.

Welcome G1 Therapeutics Fourth Quarter 2017 Financial and Operating Results Conference Call. Joining me today are Mark Velleca; Chief Executive Officer, Raj Malik; Chief Medical Officer and Senior Vice President, R&D and Buck Phillips; Chief Financial Officer and Senior Vice President of Corporate Development. Terry Murdock, our Senior Vice President, Development Operations will be available during the Q&A portion of the call.

Before turning the call over to Mark, I would like to remind you that today's call will include forward-looking statements based on current expectations. Such statements represent management's judgment as of today and 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 Web Site for information concerning risk factors that could affect the Company.

I'll now turn the call over to mark.

Thank you for joining our teleconference today. We're excited to update you on our pipeline progress, provide highlights of our financial results for the fourth quarter and full year 2017 and describe our plans and goals for 2018. After our prepared remarks, we will be available to take your questions.

We made significant progress across the board in 2017 and entered 2018 with a high level of confidence and optimism. We have much to look forward to in the coming year. As a clinical-stage oncology Company with three wholly-owned drug candidates, we anticipate 2018 will be a data rich year. We have four ongoing randomized Phase II clinical trials with trilaciclib and are planning for data readouts from three of those trials this year.

In addition, we will present earlier clinical data for our potential best in class oral CDK4/6 inhibitor, G1T38 in the second quarter of this year.

Trilaciclib and G1T38 have broad potential in many forms of cancer and can serve as backbone therapies for multiple combination regimens. Analyst estimates of peak annual sales for the CDK4/6 category exceed $20 billion of which more than $11 billion is in breast cancer. We are the only Company with two clinical stage CDK4/6 inhibitors in development and the commercial potential for our pipeline candidates is substantial.

Let me turn to a quick review of our 2017 clinical program accomplishments and recent operational highlights of which there are many. I will begin with trilaciclib, our short-acting CDK4/6 inhibitor that is administered intravenously prior to chemotherapy. We have published robust preclinical and early clinical data demonstrating that trilaciclib can preserve bone marrow and immune system function from the damaging effects of chemotherapy. Therefore, we expect that trilaciclib will reduce the clinically relevant consequences of chemotherapy induced myelosuppression.

Moreover, by preserving immune system function, trilaciclib may enhance the efficacy of checkpoint inhibitor chemotherapy combinations. Demonstrating these myelopreservation benefits of trilaciclib across multiple tumor types in chemotherapeutic regimens is a major goal for the Company in 2018 and beyond.

We currently have four randomized Phase II trials for trilaciclib underway and enrollment for all of them is on track or ahead of schedule; three of these trials will readout this year. Last year, enrollment was completed for the Phase IIa trial in first-line small cell lung cancer patients receiving carboplatin and etoposide.

Top line results for this trial are expected next month and Raj will tell you more about our expectations for those data later in the call. Enrollment for the Phase IIa trial in second and third-line small cell lung cancer patients receiving topotecan is on track for completion next quarter with top line data expected in the fourth quarter. Enrollment for the Phase II trial in triple-negative breast cancer patients, receiving gemcitabine and carboplatin is also expected to be completed in the next quarter with preliminary data anticipated in the fourth quarter.

Also, through a nonexclusive collaboration with Genentech, we are conducting a Phase II trial evaluating trilaciclib in combination with Tecentriq and carboplatin / etoposide as a first-line treatment for small cell lung cancer patients. We completed enrollment of that trial this month, a full two quarters ahead of schedule.

Our dialogue with the FDA has been productive. Last May we had an end of Phase I meeting to obtain feedback on the preliminary clinical data and overall development plans for trilaciclib. We strive to maintain an open dialogue with the FDA and other regulatory agencies and expect to have end of Phase II meetings with both the FDA and European regulators once we have the data from the ongoing clinical trials.

I will now turn to G1T38, our oral CDK4/6 inhibitor with best in class potential. We designed G1T38 to address the shortcomings of Ibrance, Kisqali and Verzenio and are encouraged by the early clinical data showing differentiation from all three of those drugs. Last year, we initiated a Phase Ib/IIa clinical trial evaluating G1T38 in combination with Faslodex in patients with ER+, HER2- breast cancer. Importantly, G1T38 is being dosed continuously without a drug holiday and we expect to report early clinical data from this trial next quarter.

In the fourth quarter of 2017, we forged a nonexclusive clinical trial collaboration with AstraZeneca to combine their EGFR inhibitor Tagrisso with G1T38 in patients with EGFR mutation positive, non-small cell lung cancer and we have an active IND to support the Phase Ib/II trial that will begin next month.

Finally, in the fourth quarter of 2017, we filed an IND for G1T48, our selective estrogen receptor degrader or SERD and will begin a Phase I/IIa trial in ER+, HER2- breast cancer patients next quarter. While we will initially advance G1T48 as monotherapy, we also plan to combine it with our oral CDK4/6 inhibitor G1T38 so that we can provide patients with ER+ breast cancer, a potential best in class oral combination regimen.

We were also active throughout last year with scientific journal publications and presentations at medical meetings to build and enhance relationships with the medical community. For example, in June we presented clinical data for trilaciclib at ASCO. We also presented preclinical data on trilaciclib G1T38 and our oral SERD G1T48 at AACR in April. We expect to continue our practice of data presentations at key medical conferences.

In May we raised approximately $107 million in net proceeds from our initial public offering of common stock to fund clinical development and other corporate activities. Last year, we also expanded our senior management team with key hires in clinical development and regulatory affairs and brought in Terry Murdock as SVP Development Operations and Buck Phillips as Chief Financial Officer and SVP Corporate Development.

With that, I will now turn the call over to Raj who will provide a deeper look at our clinical programs.

Thanks Mark. We designed trilaciclib to preserve bone marrow and immune system function from damage by chemotherapy. Trilaciclib is administered intravenously prior to chemotherapy and we believe it has a potential to be a backbone therapy for multiple chemotherapeutic and chemotherapeutic immune checkpoint inhibitor combinations thereby substantially improving patient outcomes.

As you all know, chemotherapy is still a cornerstone of cancer treatment with approximately 1 million patients per year receiving chemotherapy in the U.S. alone. Myelosuppression across all blood lineages, i.e., neutrophils, red blood cells and platelets, is the most common severe adverse effect of chemotherapy causing significant morbidity and mortality as well as dose delays and dose reductions.

Currently, myelosuppression is managed by multiple modalities including supportive care drugs like GCSF and to a lesser extent erythropoietin and transfusions of both red blood cells and platelets. Despite the fact that GCSF and erythropoietin only address myelosuppression of individual blood lineages and do nothing to prevent damage to important bone marrow stem cells, the market exceeds $7 billion annually.

Our approach with trilaciclib is fundamentally different. By preserving the function of hematopoietic stem and progenitor cells or HSCPs, trilaciclib provides multi-lineage protection and is anticipated to reduce the clinically relevant consequences of myelosuppression such as febrile neutropenia and need for transfusions to treat anemia and thrombocytopenia. This myelopreservation benefit including preservation of lymphocyte and immune function is the broad opportunity that we see for trilaciclib.

Now, I want to update you on a randomized placebo-controlled, double-blind Phase IIa trial of trilaciclib in first-line small cell lung cancer in combination with carboplatin / etoposide and the top line data readout we expect next month. This is the first of three trials that will provide data in 2018 to allow us to assess the myelopreservation benefits of trilaciclib in patients receiving chemotherapy.

A total of 77 patients were enrolled and randomized one to one to the combination of carboplatin / etoposide with and without trilaciclib. This trial was designed as a signal generating proof of concept study. We are tracking endpoints across multiple hematopoietic lineages such as febrile neutropenia, duration of severe neutropenia, transfusion frequency and GCSF usage.

We expect to see fewer events in the trilaciclib plus chemotherapy arm than in the placebo plus chemotherapy arm consistent with multi-lineage protection. This data will serve to inform further development planning. Since we view the initial trilaciclib clinical benefit as myelopreservation, we do not need to see an increase in chemotherapy efficacy in this setting.

However, we are following tumor efficacy measures such as response rate, progression free survival and overall survival. We will be reporting response rate data for all patients including data obtained from a blinded independent central radiological review. Data for PFS and OS will be immature after this initial data readout.

Any increase in tumor efficacy will only expand the clinical utility of trilaciclib in combination with chemotherapy. Our blinded Phase IIa trial testing two label doses of topotecan with and without trilaciclib as second-/third-line treatment for small cell lung cancer is designed to enroll approximately 90 patients at a two to one randomization to the trilaciclib versus placebo arm.

We expect to complete enrollment in the second quarter of this year and provide top line data in the fourth quarter of 2018. We're also testing gemcitabine carboplatin with and without trilaciclib in first-/second-/third-line metastatic triple negative breast cancer. This open label Phase II trial was initiated in the first quarter of 2017 and it's expected to enroll 90 patients.

We expect to complete enrollment in the second quarter of this year and provide top line data in the fourth quarter of 2018. In both of these trials, we will be assessing myelopreservation benefits of trilaciclib in patients receiving chemotherapy to complement the results we obtained from the first-line small cell lung cancer trial reporting out next month. Where we are looking for an increase in tumor efficacy is our Phase II trial in small cell lung cancer assessing the combination of carboplatin / etoposide in Tecentriq with and without trilaciclib.

This is a one to one randomized blinded placebo-controlled trial. Enrollment of more than 100 patients was completed this month, two quarters ahead of schedule due to the hard work by Terry's team. The primary endpoint is overall survival with secondary endpoints of overall response rate PFS in myelopreservation. Since the data readout for overall survival is event-driven, we do not anticipate it until 2019 or later.

Turning now to G1T38, our selective oral CDK4/6 inhibitor that could potentially be a best in class compound. So far in the clinic where G1T38 is being dosed continuously without a drug holiday, it has been well-tolerated and with a profile that is differentiated from the commercially available CDK4/6 inhibitors. We expect to present preliminary Phase Ib dose escalation data from the ongoing Phase Ib/IIa hormone receptor positive, HER2-, breast cancer trial in combination with Faslodex in the second quarter of 2018. We also look forward to combining G1T38 with our oral SERD G1T48 in 2019.

A combination Phase Ib study of G1T38 in Tagrisso in EGFR mutant non-small cell lung cancer is expected to initiate by the end of the first quarter. This will be conducted through a non-exclusive collaboration with AstraZeneca. CDK4/6 inhibitors can enhance the efficacy of targeted therapies and the combination may provide additional benefit compared to treatment of Tagrisso alone.

Finally, our SERD also known as G1T48 is expected to begin a Phase I/IIa monotherapy trial in the second quarter in patients with ER+, HER2- breast cancer.

With that overview of our clinical trials, I will now turn the call over to Buck for discussion of the financial results for the fourth quarter and full-year 2017.

Thanks Raj. Our 2017 financial results can be found in our earnings press release, which is now available on our website. Let me take a moment to walk you through the financial highlights contained in that press release.

We reported a net loss of $17 million for the fourth quarter of 2017 compared to $10.4 million for the fourth quarter of 2016. Net loss for the full year 2017 was $60.1 million compared to a net loss of $30.3 million in the prior year. Operating expenses were $17.3 million for the fourth quarter of '17 compared to $10.4 million for the fourth quarter of '16.

GAAP operating expenses include non-cash stock based compensation expense of $1 million in the fourth of '17 compared to $0.5 million in the fourth quarter of '16. Operating expenses for the full year of '17 were $61 million compared to $30.4 million for the prior year. Non-cash stock based compensation expense for the full year of 2017 was $3.4 million compared to $1.4 million for the prior year.

Research and development expenses for the fourth quarter of 2017 were $15.1 million compared to $9.1 million for the fourth quarter of 2016. The increase in expense was due to an increase in clinical program costs, drug manufacturing costs to support those clinical programs, external research studies and personnel cost due to additional headcount.

R&D expenses for the full year of 2017 were $53.9 million compared to $25.2 million for the prior year. General and administrative expenses for the fourth quarter of 2017 were $2.2 million compared to $1.3 million for the fourth quarter of '16. The increase in expense was largely due to an increase in professional fees and personnel related costs. G&A expenses for the year 2017 were $7.1 million compared to $5.2 million for the prior year.

As of December 31, 2017, we had $103.8 million in cash, cash equivalents and short-term investments on the balance sheet compared to $47.3 million as of December 31, 2016. Based on our current operating plan we estimate cash used in operating activities in 2018 will be between $65 million and $75 million and that our current cash, cash equivalents and short-term investments will be sufficient to fund our current operating plan well into 2019.

With that, I'll turn the call back over to Mark.

For those of you that follow us closely and track our progress, let me summarize our outlook and anticipated milestones for the rest of the year.

We plan to announce top line data from the Phase IIa trial of chemotherapy with or without trilaciclib in first-line small cell lung cancer in March. The trial is the first of three ongoing Phase II trials evaluating the myelopreservation benefits of trilaciclib for patients undergoing chemotherapy.

In the first quarter, we expect to initiate a Phase Ib/II trial of G1T38 in combination with Tagrisso for the treatment of patients with EGFR mutation positive non-small cell lung cancer. In the second quarter we are planning to present preliminary data from the Phase Ib trial of G1T38 plus Faslodex in ER+, HER2- breast cancer patients. Also in the second quarter, we project that we will complete enrollment in the Phase IIa trial of trilaciclib in second and third-line small cell lung cancer and the Phase II trial of trilaciclib in triple negative breast cancer. Preliminary data from both of these trials are expected in the fourth quarter of 2018.

Finally, we plan to initiate a Phase I/IIa trial of our oral SERD G1T48 in ER+, HER2- breast cancer patients in the second quarter.

With that summary we can now move to questions.

(Operator Instructions)

Chad Messer from Needham.

First on the Tecentriq combo study, I know it's event driven and you're not expecting data until at least 2019. Is it possible to maybe help us narrow expectations down a little more perhaps by reminding us what survival would be expected to be in the control arm and/or any [powering] assumptions that you might have heard?

There have not been data disclosed on the comparator arm which is Tecentriq plus chemotherapy in first-line small cell, so, can't comment there.

On the oral SERD trial Phase I/II monotherapy, what's the efficacy bar there? I mean, is this mostly for safety or is there a real efficacy bar that you would point us at when you're looking at that readout for a monotherapy for a SERD like that?

I'm going to let Raj take this one.

First let me just do the trial design and then I'll get to your question. In the open label part, the first part will be a dose escalation label where we'll define the dose. And in that part really what we are looking for is safety in defining the dose based on primarily safety and pharmacodynamic markers. We will have an expansion part of that study when we have defined the dose.

This is an evolving area as you know and you're probably familiar with some of the other data, with the Radius compound, but the types of patients I would like to be enrolled into the study would be those who've had prior experience with the 4/6 inhibitor as well as fulvestrant and so we'd be looking for a reasonable response rate as an initial indicator of efficacy.

Just to remind you, the second part of that study also is to do a combination with our oral 4/6 inhibitor, G1T38, so that will be a novel G1T38, G1T48 combination that we will also be assessing once we have the recommended Phase II dose from G1T48.

Dane Leone from BTIG.

I just wanted to get some perspective as we get closer to this data set for trilaciclib, what your expectations are regarding the data set itself in terms of what can inform path to go forward. And I guess specifically what I would ask is to parse out between maybe the febrile neutropenia endpoints versus the actual response rates and maybe how important do you think looking at relative response rates between the two arms will be in terms of informing your decision to go into a Phase III study?

Again, Raj will take that one.

To remind you, this is the first of three trials along with the second and third line small cell trial and the TNBC trial that we'll report out in 2018 to allow us to assess the myelopreservation benefits of trilaciclib in patients receiving chemotherapy and assessing data across these trials will help us formulate plans for further development.

We're evaluating clinically relevant endpoints across all hematopoietic lineages because of the multi-lineage preservation. For example febrile neutropenia as you mentioned in addition to duration of severe neutropenia, red blood cell and platelet transfusions and what we're really looking to see is fewer events in the trilaciclib arm compared to the control arm.

You mentioned that we are evaluating tumor efficacy for this indication. We do not need to see an improvement in efficacy to show the clinical benefit for myelopreservation. Obviously, if we do see increase in tumor efficacy, it will only expand the clinical utility of trilaciclib in combination with chemotherapy.

I think what I was trying to get at is, say, there is a difference in the response rates between the two arms here. You still would be dealing with smaller numbers than what would be probably in a larger pivotal study. I guess the question I'm trying to get at is if you do see a benefit in response rates in the combination therapy arm versus chemotherapy alone, would response rate ever be a clinical endpoint that you would take into a pivotal design? I'm sorry; I'm trying to be clear here, but, yes.

I think you hit on an important point which is that this is a small study so any differences we see between the arms will certainly not be statistically significant. However, directionally if we see an improvement in response, say, in the trilaciclib arm, clearly that is something that we would take into account when discussing the data with regulators and designing the pivotal study.

In terms of your question about could response rate be a registrational endpoint for small cell lung cancer, as you well know, this is always a discussion with the agency and until you have that discussion, you don't know for sure. But I think it's less likely I would say and if one were going from an efficacy perspective would likely be looking at the PFS or OS, but certainly --

-- yes, that is. Because, I guess, what we're trying to understand is there is the potential there, but is that required for the label or would it make more sense to carve that out if you if you do think that's a path to go down outside of the safety profile as an add-on to standard chemotherapy? I could see it both ways because I could add risk to the pivotal design, right?

Yes. Like I said the showing multi-lineage myelopreservation without compromising chemo efficacy is the opportunity where we're really assessing and we believe there's a significant opportunity in unmet need.

Then going to the first point you kind of made about having readouts across different indications over the course of the year, is that what you're alluding to, that these supportive studies across indications could then actually be combined into a data package where a label would be potentially agnostic to the actual malignancy for a label and just be actually broader in tandem with, whatever, a platinum based regimen or something like that. Is that the end goal here?

Yes. Absolutely correct. The target here is the host, which is the same across patients with different types of cancer. Absolutely, it's that chemo agnostic broad label that we would be going after.

Eric Schmidt from Cowen and Company.

Maybe just another question for Raj on the upcoming trilaciclib small cell lung cancer data set.

In terms of the top line release in March, are you going to be providing us with all of the myelosuppressive related outcomes that you mention where we also get the full overall response rate data on the full 77 patients and are you capturing cumulative chemotherapy doses as well?

Yes, we will provide data that will really allow you to assess the effects on myelopreservation. Obviously, as you all know we can't present all of the data obviously in a press release, but to allow you and other investors to make up their minds myelopreservation benefits. Yes, we would report response rate data as well included the blinded independent read data.

And were you looking at the cumulative chemotherapy doses provided?

Yes.

You'll have that data maybe or maybe not?

Yes.

And then switching over to G1T38 and the next data point in Q2 in the ER+ breast cancer setting with Faslodex, what would be a reasonable, I guess, comparator to look at here? I'm thinking PALOMA-3 but also considering that your trial is a dose escalation study so it may not be dose optimized, how should we put the response rates into context?

Yes. The trial is designed to be very similar to PALOMA-3, so that is the comparator, but as you rightly say, only really once the Phase II dose has been identified. That would come from the expansion part of the study. We will in the second quarter report, of course, safety PK effects that we see pharmacodynamically on neutrophil counts and available efficacy data which will be response rate data predominantly at this stage, not as much PFS data.

But as you say, from a comparative point of view until we really reach our recommended Phase II dose and expand, one should not -- any way -- we would not make the comparisons to PALOMA-3.

(Operator Instructions)

Anupam Rama from JPMorgan.

Can we follow-up on one of the prior questions here? (Inaudible - microphone inaccessible) front line small cell study here, assuming that it meets the benchmark, what will you go seek in the end of phase II meeting with the FDA (Inaudible -- microphone inaccessible) or in the triple negative trial or is it something that you (Inaudible -- microphone inaccessible).

Excuse me, Anupam. A little difficulty understanding your question; the connection wasn't good, but maybe I can rephrase and then turn it over to Raj.

It sounded like you're asking based on the readout of the first line small cell trial that's coming next month, will we be coming to the agency with that or were we going to be waiting for the triple negative and second-/third-line data in the fourth quarter? If that captures your question--

-- exactly.

Okay. I'll let Raj take it. Go ahead.

Yes, our current thinking is to wait for the triple negative breast cancer and second-/third-line data for the reasons I think we were discussing with Dane so that we can go to the agency, at least discuss with them, a broad indication statement around myelopreservation. However, if the data from the first line look very promising, then of course, we would consider accelerating that timeline.

Thank you and this does conclude the question and answer session of today's program.

I'd like to hand the program back to Mark Velleca for any further remarks.

Thank you again, all, for participating in our call today.

In March we'll be presenting at two investor conferences, the Cowan conference in Boston and the Needham conference in New York and we hope to see many of you there. Thanks again for your attention.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect.