G1 Therapeutics Inc (GTHX) 2019 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the G1 Therapeutics Fourth Quarter and Full Year 2019 Financial Results. (Operator Instructions) As a reminder, this conference call is being recorded.

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

Thank you, operator. Good afternoon, everyone, and welcome to the G1 Therapeutics Fourth Quarter and Full Year 2019 Corporate Financial Update. Joining me are Mark Velleca, Chief Executive Officer; Raj Malik, Chief Medical Officer and Senior Vice President of 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 from the SEC or on our corporate website for information concerning risk factors that could affect the company.

And now I'll turn the call over to Mark.

Thanks, Jeff. Good afternoon, everyone, and thank you for joining us. On today's call, Raj, Jen and I will highlight our key achievements in 2019, discuss the clinical and regulatory priorities and milestones expected in 2020 and review the financials. I'll conclude with additional comments on our corporate strategy moving forward. After which, we'll open the call for questions.

I'll begin with the key milestones that we achieved in 2019. First, we received breakthrough therapy designation for trilaciclib, based on compelling myelopreservation data across 3 randomized trials in small cell lung cancer. And we are on track to file an NDA and an MAA for small cell lung cancer this year.

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

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

Lastly, additional data on our oral CDK4/6 inhibitor, lerociclib, showed a differentiated profile from other drugs in the class.

Coming back to trilaciclib, our most significant accomplishment in 2019 was establishing a clear regulatory pathway. We received feedback from the Hematology division of the FDA that the positive myelopreservation data from our 3 randomized Stage II small cell lung cancer trials support an NDA filing. We began a rolling NDA submission in the fourth quarter of 2019, which we expect to complete in the second quarter of this year.

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

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

We've had productive discussions with National Health Authorities in Europe regarding the small cell lung cancer data. Similar to the U.S., we received feedback that our existing data supports the filing, and we plan to submit a marketing authorization application to the European Medicines Agency in the fourth quarter of 2020.

In parallel to the submission of regulatory filings for small cell lung cancer, we are executing a robust development plan that will evaluate trilaciclib's potential benefits in colorectal and breast cancer.

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

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

Concurrently, we're working on a marketing authorization application, or MAA, for submission in Europe. We've had several interactions with National Health Authorities, who confirms that our data package is sufficient to file an MAA, and we have been assigned a rapporteur and co-rapporteur.

There is significant overlap between the content required for the NDA and the MAA, and we expect to file the MAA in the fourth quarter of 2020.

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

We plan to initiate a Phase III trial in patients with colorectal cancer treated with 5-FU based chemotherapy in the fourth quarter of 2020, with myelopreservation as the primary outcome measure. This represents a significant opportunity to help patients. Globally, there are more than 500,000 cases of colorectal cancer treated with chemotherapy each year, the majority of which is 5-FU based.

Much of our preclinical data on trilaciclib was generated using 5-FU, and this is a multi-day treatment regimen used to treat a variety of GI tumors that results in severe myelosuppression.

In addition, trilaciclib was accepted into the long-standing and successful I-SPY 2 breast cancer trial. Trilaciclib will be evaluated for neoadjuvant treatment of locally advanced breast cancer, including ER-positive, HER2-positive and triple-negative disease in combination with a standard chemotherapy regimen, with or without a PD-1 checkpoint inhibitor. The primary endpoint of the trial is pathological complete response rate, which has been shown to correlate with event-free survival in triple-negative disease.

We'll also obtain an adverse event data to assess myelopreservation effects. We expect data from both the colorectal and I-SPY trials in late 2022 to early 2023.

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

In the fourth quarter of 2019, we fully enrolled additional study cohorts evaluating dosing at 600 and 1,000 milligrams. Data from these cohorts are being used to establish our go-forward dose. We anticipate reporting preliminary data from all 67 patients, both the dose escalation and dose expansion cohorts in the fourth quarter this year.

We are initiating an additional arm of this trial to evaluate the combination of rintodestrant and the CDK4/6 inhibitor, palbociclib, or Ibrance. We expect to begin enrolling patients with this combination in the second quarter of this year.

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

We plan to report updated safety and efficacy data in the third quarter of this year. Data from our trial with Tagrisso in non-small cell lung cancer showed that the combination was well tolerated.

Given the robust treatment effect of Tagrisso monotherapy, the data are not mature enough to evaluate the antitumor efficacy of the combination regimen. We believe that lerociclib has the potential to benefit patients in combination therapy across a range of cancer types. We do not plan to initiate additional lerociclib trials ourselves and are focusing on resources on trilaciclib and rintodestrant.

I'll now turn the call over to Jen for a review of the financials. Jen?

Thanks, Raj. I'll review several items on today's call. Full financial results for the fourth quarter and full year 2019 are available in our press release and 10-K.

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

Operating expenses were $36.6 million for the fourth quarter of 2019 compared to $26.1 million for the fourth quarter of 2018. GAAP operating expenses included stock-based compensation expense of $4.5 million for the fourth quarter of 2019 compared to $3.3 million for the fourth quarter of 2018.

Operating expenses for the full year 2019 were $129 million compared to $89.3 million for the prior year. Stock-based compensation expense for the full year 2019 was $16.4 million compared to $10.2 million for the prior year.

Research and development expenses for the fourth quarter of 2019 were $24.5 million compared to $19.1 million for the fourth quarter of 2018. R&D expenses for the full year 2019 were $89 million compared to $70.7 million for the prior year. The increase in R&D expenses was primarily due to an increase in clinical program costs, costs for manufacturing active pharmaceutical ingredients and personnel costs due to additional head count.

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

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

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

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

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

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

Our first opportunity to demonstrate this value to patients is in small cell lung cancer. G1 is well positioned to launch trilaciclib in the U.S. and retain full commercial rights, but we continue to unlock the value of trilaciclib's potential in colorectal and breast cancer.

Treatment of the approximately 30,000 patients with small cell lung cancer in the U.S. is concentrated in large community oncology practices. Therefore, we can efficiently and effectively provide education to providers about the benefits of this unique breakthrough therapy. We will have much more to say about our launch plans in the U.S. over the course of 2020.

We will continue discussions with potential ex-U. S. partners as we do not plan to build out infrastructure outside the U.S.

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

Lerociclib has shown a clinical profile that is differentiated from other CDK4/6 inhibitors, and we are exploring partnerships that will enable further development, while we focus on trila and rinto.

We entered 2020 in a strong financial position to make these investments. We have sufficient cash to fund operation into the second half of 2021, and we continue to explore nondilutive opportunities to further capitalize the company. We are particularly excited about the pending FDA review of trilaciclib and the near-term opportunity to bring this breakthrough therapy to patients.

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

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

(Operator Instructions) Your first question comes from the line of Dane Leone from Raymond James.

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

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

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

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

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

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

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

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

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

This is Tessa on the call today for Anupam. Just one from me on trilaciclib in the U.S. Mark, you alluded to this a little bit, but on your education kind of initiatives. But perhaps you can just remind us what pre-commercial activities are currently ongoing? And then how are you thinking about sort of the size and the scope of the sales force that is needed for an initial launch here in the U.S.?

Sure. Thanks, Tessa, for the question. Yes, education is very important for trilaciclib so that providers, not just oncologists but practice administrators, nurses and pharmacists, can understand the impact that myelosuppression has on their practice in small cell lung cancer patients as the novelty of trilaciclib. We have a field force of medical science liaison educating, again both oncologists and nurses and others at these large centers, where you see a lot of small cell lung cancer, especially in the Southeast and the Southwest. We know these providers and these sites very well. Many of them enrolled patients in our 3 small cell lung cancer studies. So we believe that this is a list we can do on our own with a sales force that's less than 50 people.

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

With trila and thinking about other indications, in particular, for colon, you've talked about how you're going to be doing additional work. Can you confirm that you've had discussions that assure you in terms of what exactly needs to happen, for instance, in indications like colon to continue to further expand the label, particularly in terms of trial size?

And what sort of accumulated data points you'll need in order to be considered by the FDA sufficient to continue to expand to additional opportunities like colon and others that you have -- you're contemplating?

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

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

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

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

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

It's kind of a remedial question on I-SPY. So you have 3 different types of breast cancer, it sounds like 4 treatment arms. Are they all mixed for some size cohorts and then cohorts graduate? Does it still work that way? And the real question is, what's the most data you could get in any cancer treatment line combination at the end of this trial? And is it enough to consider -- to be considered an accelerated package?

Raj?

Tom, yes. So I-SPY is a -- it's a platform trial with the goal of bringing in novel agents that can improve the efficacy of the backbone chemotherapy. And the way it's set up is patients are enrolled into the ER-positive, HER2-positive as well as triple-negative setting. In addition, there are some other biomarkers that are part of that stratification. This is an adaptive design, and so the data is continuously evaluated as each arm -- as patients complete chemotherapy, have surgery and then an evaluation is made about whether there was pathological complete response within the resected specimen.

Then since the endpoint is path CR rates, there is a comparison to the control arm and this adaptive type of design is what results in a predictive probability. And the graduation probability that I-SPY has stated is that if a experimental arm has a predictive probability of 85% or higher, that it would succeed against that same arm in the Phase III, that arm then graduates. So that's what happened, for example, with KEYTRUDA, which then Merck took forward into their KEYNOTE-522 study in the neoadjuvant setting in TNBC, which resulted in a positive study.

So it's really a very good way of assessing the -- where to focus a Phase III with the highest probability of success. It is a Phase II study. So this will -- so these data will not be sufficient for registration.

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

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

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

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

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

Okay. All right. And then for trila, I know you talked about having a lot of preclinical data with 5-FU and that being a big part of the rationale for colorectal. But can you just kind of go through the heme tox profile of 5-FU, maybe compare and contrast it a little bit with the 2 platinum regimens in small cell? Are there different -- are there similarities and/or differences between the heme tox?

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

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

Thank you, operator. That concludes the call. Please reach out to us with any questions. As a reminder, we will be at the Cowen, Raymond James and Barclays conferences in the coming weeks. We look forward to seeing many of you at those meetings. Thanks for joining us, and have a good evening.

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