G1 Therapeutics Inc (GTHX) 2018 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the G1 Therapeutics Third Quarter 2018 Financial Results Call. (Operator Instructions) As a reminder, this call is being recorded.

I would now like to turn the call over to Jeff Macdonald. You may begin.

Thank you, operator. Good afternoon, everyone, and welcome to the G1 Therapeutics Third Quarter 2018 Financial Results and Corporate Update. Joining me 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, Corporate Development.

Before we begin, 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 website for information concerning risk factors that could affect the company.

I'll now turn the call over to Mark.

Thank you, Jeff. Good afternoon, everyone, and thanks for joining us today. In the third quarter of 2018, the company focused on execution of clinical trials across all 3 product candidates in our pipeline: trilaciclib, lerociclib and G1T48.

On today's call, I'll provide a brief status update on our programs, and Raj will discuss upcoming data readouts for trilaciclib. Buck will review our financials, and then we'll open the call for questions.

Starting with trilaciclib. In March, we announced positive Phase II top line data showing robust myelopreservation benefits in first line small cell lung cancer. Last month at ESMO, we presented new analysis of that trial demonstrating that trilaciclib reduced duration of severe neutropenia and red blood cell transfusions.

In addition, we presented the first clinical data on trilaciclib's effect on lymphocytes. We saw improvements across a number of lymphocyte subsets in the trilaciclib arm compared to the placebo arm. Importantly, trilaciclib improved activated CD8 positive T-cell counts and increased the activated CD8 positive to regulatory T-cell ratio in peripheral blood.

These data support our hypothesis that trilaciclib may improve immune system function, and therefore increase overall survival when combined with chemotherapy checkpoint regimens. We are currently assessing this in our trilaciclib/chemotherapy/Tecentriq trial in first line small cell lung cancer.

While overall survival data from the trilaciclib/chemotherapy/Tecentriq trial will not be mature until next year, we will report myelopreservation response rate and preliminary PFS data by the end of the year. This is an addition to reporting data from 2 other randomized Phase II trials by year-end. Raj will review our trilaciclib clinical program in more detail momentarily.

I'll now turn to lerociclib, our oral CDK4/6 inhibitor. We currently have 2 clinical trials enrolling: the Phase IIa portion of our lerociclib plus Faslodex trial in ER-positive, HER2-negative breast cancer, and the Phase Ib dose escalation portion of our lerociclib plus Tagrisso trial in non-small cell lung cancer. Enrollment is on track, and we expect to report data from both programs in 2019.

Finally, we are continuing the dose escalation portion of our Phase I/II clinical trial of G1T48, our oral selective estrogen receptor degrader, or SERD. We expect to complete enrollment of the Phase I dose escalation portion of the trial, which is evaluating G1T48 as monotherapy in ER-positive HER2-negative breast cancer in the first half of 2019. We plan to report preliminary Phase I data in the second half of 2019. Assuming identification of a recommended Phase II dose, the second part of the trial will consist of 2 arms: G1T48 as monotherapy and a lerociclib G1T48 combination regimen.

Raj will now provide more detail on our upcoming trilaciclib data readouts. Raj?

Thanks, Mark, and good afternoon, everyone. As Mark noted, we have already reported robust myelopreservation data from our trilaciclib chemotherapy trial in first line small cell lung cancer. We have 3 additional trilaciclib data readouts before the end of the year.

I'd like to take a few minutes to provide some context on those data sets, all of which are from randomized Phase II trials. Our Phase II trial of trilaciclib in combination with chemotherapy and the checkpoint inhibitor, Tecentriq, in first line small cell lung cancer, enrolled 107 patients. The patient population is similar to our trilaciclib chemotherapy trial and patients received the same chemotherapy backbone of etoposide and carboplatin. Given the similar patient populations in these 2 trials and the robust results from the trilaciclib/chemotherapy trial, we expect to observe myelopreservation benefits when trilaciclib is added to a chemotherapy/Tecentriq regimen in first line small cell lung cancer.

Data from Roche-Genentech's IMpower133 trial, which used the same etoposide and carboplatin backbone and was in a similar patient population to our trials show that Tecentriq does not impact the myelotoxicity of chemotherapy. Therefore, our chemotherapy/Tecentriq trial will provide a second data set for assessing the myelopreservation benefits of trilaciclib in first line small cell lung cancer.

This trial was also designed to answer the question of whether trilaciclib, in combination with chemotherapy and Tecentriq, can increase antitumor activity by preserving and enhancing immune system function. Overall survival data from the trial will not be mature when we report preliminary results this year, but we expect to provide tumor response rate and preliminary progression-free survival data.

Myelopreservation data will also be reported in the top line press release that we anticipate issuing later this year. Our trials in second-/third-line small cell lung cancer and metastatic triple negative breast cancer were designed to assess myelopreservation. In these settings, where chemotherapy is given until disease progression, preserving HSPC and immune system function may also enable patients to receive additional cycles of chemotherapy, potentially leading to improved antitumor efficacy.

Our second-/third-line small cell lung cancer trial, which enrolled 123 participants, who received a background chemotherapy regimen of topotecan, will provide data on myelopreservation effects in patients whose bone marrow has already been comprised by previous lines of chemotherapy. Topotecan is one of the most myelotoxic chemotherapies. So in addition to myelopreservation data on neutrophils, red blood cells and lymphocytes, we anticipate this trial will provide data on platelets.

Similar to the trilaciclib/chemotherapy/Tecentriq trial, we plan to provide top line data via a press release. We will report myelopreservation, tumor response rate and preliminary progression-free survival data. We expect overall survival data will be immature, and we will report the mature date when available.

The triple negative breast cancer trial enrolled 102 patients across 3 arms: chemo alone and 2 dosing schedules of trilaciclib plus chemo. The chemotherapy regimen used in this trial is gemcitabine and carboplatin administered on days 1 and 8 in the 21-day cycle. We are testing to see if administering trilaciclib the day prior to and the day of chemotherapy has different effects compared to administration of trilaciclib just on the day of chemotherapy. Data from this trial will be presented at San Antonio Breast Cancer Symposium on December 5.

We submitted our abstract prior to final analysis of the randomized data, so only pooled data will be filed in the published abstract. Data from the 3 arms will be available in the poster, which will be accessible on our website.

We will present myelopreservation, tumor response rate and preliminary progression-free survival data. We expect overall survival data will be immature, and we will report the mature date when available. We will request meetings with U.S. and European regulatory authorities in early 2019 to discuss data for more than 300 participants who received trilaciclib across different indications, lines of therapy and chemotherapy regimens. As part of these meetings, we will request feedback on the totality of the data and potential registration paths for trilaciclib.

I will now turn the call over to Buck for a discussion of the third quarter financials. Buck?

Thank you, Raj. Our third quarter financial results can be found in our earnings press release, which is available on our website. I'd like to take this opportunity to walk you through the financial highlights contained in that release.

We reported a net loss of $19.9 million for the third quarter of 2018 compared to $15.6 million for the third quarter of 2017. Operating expenses were $20.8 million for the third quarter of 2018 compared to $15.9 million for the prior year period.

GAAP operating expenses including noncash stock-based compensation expense of $3.3 million for the third quarter of 2018 compared to $1 million for Q3 of 2017.

Research and development expenses for the third quarter of 2018 were $15.9 million compared to $14.1 million for the prior year period. The increase in expenses was driven by an increase in clinical program costs and increased personnel costs to support the growth of our clinical programs.

General and administrative expenses for the third quarter of 2018 were $4.9 million compared to $1.9 million for the third quarter of 2017. The increase in expense was largely driven by an increase in personnel costs, professional fees and other corporate expenses.

In the third quarter, we raised a total of $218.9 million in net proceeds through a combination of ATM issuances early in the quarter and a secondary offering in mid-September. Those financings provide the company with a strong cash position that enables us to advance our 3 product candidates and to begin investment in pre-commercialization activities for trilaciclib.

As of September 30, 2018, we had $390.5 million in cash and cash equivalents on the balance sheet. With the year largely complete, I will narrow our guidance on cash used in operations in 2018 to a range of $72 million to $77 million. This compares to our prior guidance of $75 million to $85 million. With that updated guidance, we expect to end the year with $365 million to $370 million in cash on the balance sheet.

Looking ahead into 2019, our expenses will be heavily influenced by the 3 trilaciclib trials reading out between now and the end of the year. The results of those trials will dictate clinical, regulatory and commercial activities in 2019 and beyond. We expect to define that operating plan in early 2019, which will allow me to provide 2019 cash guidance on our year-end earnings call in February.

I'll now turn the call over to Mark.

Thanks, Buck. As a quick summary, before we go to Q&A, by the end of the year we will update on trilaciclib from 4 randomized Phase II clinical trials. We plan to continue our dialogue with U.S. and European regulators in early 2019 to discuss the totality of these data. We will provide an update on our regulatory strategy in the second quarter of 2019, following those meetings.

Enrollment in our lerociclib trials in combination with Faslodex in ER-positive, HER2-negative breast cancer and Tagrisso in non-small cell lung cancer are on track, and we expect to report data from both programs in 2019. We're enrolling our Phase I trial of G1T48 in ER-positive, HER2-negative breast cancer, and we will report data in the second half of 2019.

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

(Operator Instructions) Our first question comes from Anupam Rama of JPMorgan.

This is Tessa filling in for Anupam this evening. First, can you remind us if we can expect to see any data within the San Antonio breast abstract ahead of the presentation on December 5? And then secondly, you expect to request meetings from regulators in early 2019 to discuss the package of trilaciclib data collected to-date. Can you give us a sense of what specific topics you're seeking guidance from at this point with respect to the registration path forward? And in your discussions to date with the FDA and EMEA, how generally aligned have the 2 agencies been in their feedback as it relates to registration for an agent like trilaciclib?

Thanks, Tessa. I'm going to let Raj take those. Raj?

Yes. So Tessa, the data in the TNBC abstract, that will be published soon, is going to be -- it was going to consist of pooled data. In other words, we will not be breaking out the data by arms. And the reason for this is that we didn't have the analyses available on the abstract deadline for submission came along. Obviously, at the meeting itself, we will be presenting data in all 3 arms. So in terms of regulatory meetings in 2019 and the topics, I think, it's going to, obviously, depend on the data we see from these 3 trials that are reading out. And they are going to generally consist of what the development could look like in terms of endpoints if we need to run another trial, for example, or just what their review of the totality of the data we have right now. In terms of alignment across the 2 agencies, I can't really comment on that right now. These are matter of ongoing discussions.

Our next question comes from Chris Shibutani of Cowen & Company.

This is CJ on for Chris tonight. So you're going to be approaching regulators next year with pretty broad data sets across multiple indications, multiple chemo regimens, pretty complex data set. Can you give us some idea of how you're thinking about thresholds for myelopreservation improvement across the various regimens and various endpoints and your strategy for approaching regulators with that?

Sure. Again, I'm going to let Raj take that one.

Yes, CJ. Again, I think we have to see the data first because that drives all discussions. And the Tecentriq data, like we mentioned before, has the same chemo backbone as our first line data that we reported back out in March. Based on the IMpower133 data, we do not anticipate any impact of the Tecentriq on the chemo myelotoxicity. So we would view that data set as really being the closest to -- compared to the data we got back in March. In terms of the other 2 trials, they are in different settings and different lines of therapy. There are in previously treated patients in both the TNBC as well as the small cell trial. We will be looking at, obviously, similar types of endpoints, and we'll have to let data drive the discussions we have with regulatory authorities.

Is there any particular benchmark you're hoping to see for the topotecan or the gemcitabine/carbo regimens?

Yes. If you look at topotecan, it's obviously the most myelotoxic of all the regimens that we're testing, where you see significant rates of neutropenia and also anemia and thrombocytopenia. And actually, that will be the regimen we'll be very interested in looking at the effects on platelets as the fourth lineage, if you will. And gem/carbo also gives you more anemia and thrombocytopenia than etoposide and carbo. So I think -- and to just get back to why we design these trials across different settings was to really give us the breadth of the myelopreservation effects. And the other point just to say is these are all randomized trials. So we have an in-trial comparison to really give us a sense of the myelopreservation effect.

Our next question comes from David Nierengarten of Wedbush Securities.

I was wondering in contrast with the small cell studies and front line settings with the standard 6 cycles of chemo, if you could help us out on the typical cycles of chemo given for metastatic triple negative breast cancer patients? And I know you are treating to progression, but is there -- the background or the typical number you could point to from other studies that is often used or achieved in this population?

David, Raj here, again. So yes, if you look at the publications of that gem/carbo backbone, I would say about median of 4 cycles is generally what has been reported. But you're right that, as opposed to the first line small cell in these settings and particularly in TNBC patients are treated on for progression without limitation. Yes, sorry.

Okay. Yes, and I mean, I guess, then that's the next question. I mean, without limitation, what's the typical maximum number in the prior studies, is it 6 or 8 cycles also -- or in that range or what is it?

I'm sorry, David, you said you're asking me to provide what the upper limit, if you will?

Yes. There usually is the range around that 4 cycle number. Is that upper limit, usually 6 or 8 cycles to unacceptable toxicity of progression or what is it?

Yes, I think, it's going to vary, but I think that's a reasonable assumption because the reason for stopping treatment is either disease progression or unacceptable toxicity. So I think that's a reasonable assumption.

And then one last follow-up on that unacceptable toxicity. Do you know off-hand what the toxicity breakdown is that causes cessation of chemo? Is it myelosuppression in most of those patients? Or is it other side effects from chemo?

Yes. No. I think in that setting, I would say the most common reason for drug discontinuation will be disease progression. But beyond that, the next common would be toxicity and the most common category there would be hem tox. So a variety of platelets versus neutrophils would be the typical combination.

Our next question comes from Chad Messer of Needham & Company.

So it's going to be a bit of a data whirlwind through year-end, and you guys must be excited. Just thinking about a couple of these next studies for patients that have already seen chemo, I keep trying to think through whether that's going to make it easier or harder to see a myelopreservation effect. Wondering whether you guys have any thoughts on that and/or whether there is anything instructive from the open-label data to indicate what we might expect?

Chad, so we expect -- we would expect to see some effect on myelopreservation. Of course, the delta could potentially be different because coming in as you say, the bone marrow is more beaten up by the prior lines of therapy that patients have received. So just as you are anxious, we are anxious as well to see what that myelopreservation looks like, but we would expect to see some effect. Whether it will be the same effect as we saw in first line, I think we will know.

Okay. I mean, I guess, I was just thinking that the opposite is also possible because the bone marrow is so beat up that these patients might, if they're not on trilaciclib, they'd have very poor results. So I think the delta can go either way, I guess is what I'm...

It could absolutely go either way. You're absolutely, correct.

Right. And I just want to remind you that the patient population in each of those studies both TNBC and second-/third-line it's mixed. It's patients who are -- who have received 1, 2 and, in case of TNBC, 3 lines on some prior chemo. So it's a mixed bag.

It is.

Yes. That will be very interesting data. And then just on the new data presented at ESMO. I was wondering if you guys knew what levels of higher activated CD8 T-cells or CD8 regulatory cell ratios have been shown to be important? And how that compares to what you guys saw, if such sort of quantities are known?

Yes. I think, that's -- it's definitely an emerging field. And I think the other -- so I couldn't necessarily tell you that -- I mean I heard ratios of maybe 10:1 or sometimes less. But I don't know if there is any hard data for that. I think the other piece that some data that's coming out is that an increase in CD8 cells could also be favorably associated with response. This is all data from like the checkpoint world. And so that's another thing that we'll have to see across our studies. But clearly, having more activated -- I'm sorry.

Please finish.

No, no, clearly having more activated CD8 cells and relative to TREG is, obviously, a good thing from antitumor factor response.

Alright. I was just going to say, I'm excited to see the vast expansion in available data we're about to receive.

Yes.

Our next question comes from Ed White of H.C. Wainwright.

So I just want to make sure I heard this right. So kind of G1T48, you are going to have complete enrollment in the Phase I study by the first half of '19 with data in the second half of '19, but when does the study with lerociclib begin? Is that upon completion? Or is that after the date in the second half?

Yes. So Ed, this is Raj. So it would really depend on identification of the recommended Phase II dose, which, as you know, in these oncology studies, the DLT period is like a month after the last patient is enrolled. So we will be able to define a recommended Phase II dose faster than getting the data read out in the second half of the year. So we anticipate, if everything goes according to plan, that about middle of next year is when we're starting the lerociclib combination and the monotherapy expansion as well, the G1T48.

Okay, great. And by that time, will you also have data on the combination with Faslodex?

Additional Phase I data.

Yes. Phase I data that we -- yes, that we plan to also report around that same time. The expansion phase, we expect to complete enrollment. As Mark said, we are on track by the end of this year, but the expansion phase data will not be available until later next year.

There are no further questions. I'd like turn the call back over to Dr. Velleca for any closing remarks.

Yes, thank you. Thanks, everyone, for joining the call. Please reach out to us with any additional questions. We look forward to seeing many of you at the upcoming Stifel, Evercore ISI and Piper Jaffray Investor Conferences later this month and in San Antonio in December. Have a good evening.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.