Q1 2022 G1 Therapeutics Inc Earnings Call
Okay.
Operator: Good day, and thank you for standing by.
Good day and thank you for standing by welcome to the G. One therapeutics first quarter 2022 financial results Conference call. At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone please be.
Operator: Welcome to the G1 Therapeutics first quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode.
Andrew Perry: So, we anticipate more of those top 100s coming on board as we move forward.
Operator: After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone.
Operator: Please be advised that today's conference is being recorded.
Be advised that today's conference is being recorded if you require assistance during the conference. Please press Star Zero I would now like to hand, the conference over to will Roberts head of Communications. Please go ahead.
Operator: If you require assistance during the conference, please press star zero.
Operator: I would now like to hand the conference over to Will Roberts, head of communications.
Andrew Perry: And, in fact, we do continue to see top 100 accounts come on board regularly, as I just outlined with Eddie Anderson.
Operator: Please go ahead.
Operator: Thank you, Abigail.
Thank you Danielle.
Will Roberts: Good morning, everyone, and welcome to the G1 conference, call to discuss our first quarter of 2022 financial results and business update.
Andrew Perry: Great.
Good morning, everyone and welcome to the Q1 conference call to discuss our first quarter of 2022 financial results and business update.
Ed White: Thanks, Andrew.
Ed White: And one last question for you.
Will Roberts: The press release on these financial results, was issued this morning and can be found in the news section of our corporate website, g1therapeutics.com.
Ed White: I'm just curious, is the 34 sales reps that you currently have, are you right-buys now?
The press release on these financial results was issued this morning and can be found in the news section of our corporate website <unk> Therapeutics Dot com.
Andrew Perry: Or will you be adding more later in the year?
Andrew Perry: Right now, we are fully deployed with the 34.
Andrew Perry: We don't have an intention to expand that based on the current potential that we have.
Will Roberts: On this morning's call, the team will provide, a business overview of the first quarter of 2022, including an update on our clinical programs and our commercial progress in that period with Cosella, which is approved and commercially available to decrease the incidence of chemotherapy-induced myelodysuppression in adult patients when administered prior to a platinum or topazide-containing regimen or a topatechin-containing regimen for extensive-stage small cell lung cancer, or ESSCLC.
Andrew Perry: And I've got to say, those 34 individuals are very, very capable people, and I think they have a lot of potential to deliver for the business.
On this morning's call the team will provide a business overview of the first quarter of 2022.
Andrew Perry: Okay.
Ed White: Thanks, Andrew.
An update on our clinical programs and commercial progress in that period with the seller, which is approved and commercially available to decrease the incidence of chemotherapy induced model of depression and adult patients when administered prior to a platinum containing.
Regimen, we're keeping talking TTM containing regimen.
At this stage small cell lung cancer or SCLC.
Will Roberts: A question and answer session, will follow the prepared remarks.
Ed White: Thanks, everyone, for taking my questions.
Question and answer session will follow the prepared remarks.
Will Roberts: Before we begin, I'd like to remind you, that today's webcast contains forward-looking statements within the meaning of the Private Security, Litigation Reform Act of 1995.
Ed White: Thank you.
Before we begin I would like to remind you that today's webcast contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.
Operator: Our next question comes from the line of Anupam Rama with J.P. Morgan.
Operator: Your line is open.
Will Roberts: Such statements represent management judgment as of today, and may involve risk and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. For more information on such risk and uncertainties, please refer to our filings with the Securities and Exchange Commission, which are available from the SEC or on our corporate website.
Such statements represent managements judgment as of today.
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.
Will Roberts: Any forward-looking statements represent our views, as of today, May 4th, 2022.
Any forward looking statements represent our views as of today may 4th 2022.
Will Roberts: Joining me on the call today are Jack Bailey,
Anupam Rama: Hey, guys.
Joining me on the call today are Jeff Bailey, our Chief Executive Officer, Andrew <unk>, Chief Commercial Officer, Raj Malik Chief Medical Officer, and technologies as our Chief Financial Officer.
Will Roberts: our Chief Executive Officer,
Will Roberts: Andrew Perry, our Chief Commercial Officer,
Will Roberts: Raj Mallick, our Chief Medical Officer,
I'll now turn the call over to Jack.
Will Roberts: and Jack Moses, our Chief Financial Officer.
Thanks.
Will Roberts: I'll now turn the call over to Jack.
Anupam Rama: Thanks so much for taking the question.
Good morning, everyone and thank you for joining us on the call today.
Anupam Rama: What portion of Cosella detailing is in-person versus virtual, and how is this dynamic sort of trended over the first four months of the year with the Salesforce expansion? And have you seen any difference in uptake if the primary detailing is in-person versus virtual?
Today's headline is that as of the beginning of March we have successfully deployed our <unk> sales team.
Anupam Rama: Thanks so much.
Andrew Perry: Thanks Anupam.
Fully transitioned out of our sales relationship with Boehringer Ingelheim.
And so have entered a new phase of cost solid promotion.
We are in full control of the commercial opportunity for this important role.
Consolidates, a unique and innovative drugs that can fundamentally change the paradigm by which small cell lung cancers are treated.
It's proactively administered and covers multiple lineages.
What practitioners have been doing for the last 30 years, namely treating hematologic events caused by chemo reactively.
With a variety of single lineage interventions, which carry their own unintended consequences.
Our goal overtime is to replace these reactive treatment modalities with co sell a simple 30 minute infusion prior to chemo.
Reduce and in some cases eliminate the cytotoxic events that put chemo patients in the hospital and prevent them from completing their regimens.
We are excited about this as are the people, we hear routinely from including patients who have been through chemotherapy with co sell up.
<unk> centre nurses on the frontline of patient care.
And the treating oncologists.
As you will hear from Andrew our newly deployed sales team made good progress during the back half of the first quarter and improving Costello access and uptake.
Tend to use remaining time and reimbursement remains as strong as it has been since launch.
Importantly, ordering by our top 100 organizations increased quarter over quarter.
More broadly we continue to shift the proportion of our business toward those top 100 organizations. So not only did overall volume increase and increase in the accounts that have the ability to maximize the future potential of <unk>.
Turning to our clinical operations, we continue to make good progress in enrollment in our ongoing phase II and phase III trials and as of today. We are on plan to provide additional results on schedule.
Andrew Perry: We now see pretty much 50% of our details are in person, which is great, and that has progressed in Q1 over previous quarters.
This morning, I will ask Andrew to cover our recent commercial progress, including an update on the first quarter of 2022 and month over month progress during the quarter. The first opportunity in which we were in full control of the commercialization effort.
Ross will then provide an update on some of our medical and clinical momentum, including the real World data. We recently presented at the 2022 and <unk>.
Finally, Jim will provide the financial results for the quarter, including a reminder, that our cash runway takes us into 2024.
I'll be back for some concluding comments with that I will turn the call over to Andrew.
Will Roberts: Jack?
Andrew Perry: Now obviously there's the background trend of COVID there, we've got the changeover of our sales team going on as well.
Thank you Jonathan.
Data spend some time on a variety of commercial opex, including first part our sales activity leading indicators of growth.
Jack Bailey: Thanks, Will.
Jack Bailey: Good morning, everyone, and thank you for joining us on the call today. Today's headline is that as of the beginning of March, we have successfully deployed our G1 sales team, fully transitioned out of our sales relationship with Barringer Engelheim, and in doing so have entered a new phase of Cocella promotion in which we are in full control of the commercial opportunity for this important drug.
It has been a quarter of significant commercial transition. So we're also providing a special snapshot of monthly sales growth during the first quarter to provide additional insight into this transition.
Jack Bailey: Cocella is a unique and innovative drug, that can fundamentally change the paradigm by which small cell lung cancers are treated.
Jack Bailey: It's proactively administered and covers multiple lineages, unlike what practitioners have been doing for the last 30 years, namely treating hematologic events caused by chemo reactively with a variety of single lineage interventions, which carry their own unintended consequences.
Jack Bailey: Our goal over time is to replace, these reactive treatment modalities with Cocella, a simple 30-minute infusion prior to chemo to reduce, and in some cases, eliminate the cytotoxic events that put chemo patients in the hospital and prevent them from completing their regimen. We are excited about this, as are the people we hear routinely from, including patients, who have been through chemotherapy with Cocella, infusion center nurses on the front line of patient care, and treating oncologists.
Andrew Perry: And as I outlined on the call, it's not just those in-person face-to-face contacts, it's also programs, in-service opportunities to make sure that folks are educated on how to administer the product, as well as exhibits that customers are now attending as well.
We began the first quarter of 2022 with wholesale still being promoted by our co promotion partner since launch.
Andrew Perry: Any difference between live and virtual?
Skinner of RG, one oncology sales account managers are all comes in the field.
Andrew Perry: We haven't really analyzed the difference in impact between live and virtual, so I don't really have data to back that up.
Andrew Perry: But I would say that the efficiency of a live interaction is certainly much higher, because when you're in the office, you do get the opportunity just to see multiple stakeholders at the exact same time, and potentially have them in the room together.
By mid February we have deployed our complete team of <unk> and <unk>.
Second the <unk> arrangements have been concluded so in March wholesale was solely promoted by the <unk> sales team for the first time.
Andrew Perry: So although I don't have data to back up the effectiveness, I'm pretty sure it's a much more efficient method.
Anupam Rama: Thanks so much for taking our question.
Andrew Perry: As you will hear from Andrew, our newly deployed sales team made good progress during the back, half of the first quarter in improving Cocella access and uptake. Demand to use remains high, and reimbursement remains as strong as it has been since launch.
Anupam Rama: Thank you.
We continue to be encouraged by the market reception for kosawa across payers providers and health care organizations.
Operator: Our next question comes from the line of Tony Butler with Roth Capital.
Operator: Your line is open.
Our coverage brand awareness and intention to prescribe all remained strong and we're seeing that translate into physician in Boston.
I will file an uptake with our largest customers.
Tony Butler: Good morning.
Coming out of the first quarter. We believe we now have our commercial platform, which will allow us to generate growth.
Tony Butler: This is Tashkeedan for Tony.
Both breadth and depth.
Starting with first quarter sales activity, we ended the quarter with $5 $5 million on net sales of casella, representing just over 20% oil volume growth period over period.
As previously mentioned the first quarter was one of significant transition as we enter the next phase of wholesale our commercialization and our goal. During this transition period was to maintain growth at a similar level to the growth we saw in Florida last year, when <unk> were still promoting the broad.
We were successful in doing so the first quarter, approximately 20% versus Q4, comparative with approximately 22% growth in the prior quarter.
Tony Butler: My question is on small to long cancer patients.
Tony Butler: I wonder if you can shed some light on the proportion of patients completing all of their chemo doses, and then perhaps it would be also great to know if you could tell us the average number of COSLA doses that each patient get at front line, second line, third line settings.
When we look at the snapshot of Q1 gross data on a monthly basis, we can start to see the progress of best transition impact all of our sales team.
Tony Butler: Thank you.
Andrew Perry: Yeah, thanks for the question.
In January 2020, we saw a vial volumes nationally declined 2% compared with December 2021.
Seven territories with the <unk> <unk>.
Oil volumes doubled.
In February we had <unk> <unk> in the field until our full deployment mid month, and we saw a month over month volume growth of 5%.
After March 2nd we no longer have support from the <unk> team. We saw four consecutive weeks of all time high oil volumes, culminating and 38% monthly volume growth over February .
Andrew Perry: I can give you some of the information I have, which is that over 90% of our patients are first line, so the vast majority are first line.
Just over 70% of our first quarter demand came from community hospitals or clinics with the remainder being academic institutions.
Andrew Perry: I do think that as we collect more real-world information and we see the real-world information start to reflect what we saw in the clinical trials, it will be interesting to form more of a picture there.
Moving to our performance as a reminder, one of the reasons for <unk> our own sales team was the Brent and extensive knowledge of provider relationships with the top 100 health care organizations, which treat around 50% of eligible patients with extensive stage small cell lung cancer.
Andrew Perry: Importantly, ordering by our top 100 organizations increased quarter over quarter, and more broadly, we continue to shift the proportion of our business toward those top 100 organizations. So not only did overall volume increase, it increased in the accounts that have the ability, to maximize the future potential of Cocella.
Andrew Perry: Thank you, Andrew.
Jack Bailey: Turning to our clinical operations, we continue to make good progress in enrollment in our, ongoing phase two and phase three trials, and as of today, we are on plan to provide initial results on schedule.
Andrew Perry: Thanks.
We were pleased to sequel cell trial, and I'll take and nine new top 100 organizations during the first quarter to bring the total number of pulp 100 organizations with satellite utilization.
Three by end of Q1, and we see an overall reorder rate of around 80% and those 53 organizations.
Jack Bailey: This morning, I will ask Andrew to cover our recent commercial progress, including an update, on the first quarter of 2022, and month over month progress during the quarter. This was the first opportunity in which we were in full control of the commercialization effort.
Since the end of the quarter, we were informed at MD Anderson Cancer Center in Houston had other wholesale to formulary and we've seen therefore, Florida come through as well, taking us to <unk> before of our top 100.
I've taken a document from a large organization like MD Anderson has the ability to all part of our sales trajectory. However, getting on formulary itself can be a step in the process.
Physician level of education, and then service programs with nursing will follow to ensure success.
Several of these top 100 organizations have now not only incorporate that into their formularies and EMR. They have also specify that standard of care within their R&R sets, our extensive stage small cell lung cancer and in these examples sales growth is going to cover very rapidly.
As a result of us focused on the larger organizations with more patient potential we have not only added breadth with more top 100 organizations orbiting, but we've been able to shift our priorities to more driving depth of uptake across the many clinics on accounts, which form part of those larger organizations.
In fact, our median vial volume and our pulp 100 organizations ordering has increased by 140% compared with Q4 compared to Q4 of 'twenty to 'twenty, one with Q1.
Last year, the proportion of our total Douglas from pulp 100 organizations hovered between 40% and 50% and in the most recent months not proportionate by almost 60%.
So not only have we been adding volume since bringing our new sales team on board. We have done so by accessing more top 100 organizations and by driving additional uptake within those organizations. As a result, we now believe we have more of a platform, which can sustain our future growth ambitions.
But the next phase of cost out what commercialization underway, we remain confident in the appeal of cost out in the marketplace.
Our new <unk> sales team are fully deployed and are benefiting from an increase of <unk> personal engagements as more clinics open up to appointments programs and exhibits.
Brian the awareness remains over 80% on among oncologists are aware of <unk> intention to use is over 85% of those respondents saying they anticipate using wholesale in the next two months.
We also know the Arco sell our messaging is resonating with customers.
In Q1, our key messages outperformed the industry average for oncology brand message effectiveness.
Of course reimbursement coverage remains excellent as a reminder, approximately 60% goes through Medicare and 30% through commercial paper with terrific coverage from the work go with very few payer rejections.
Operator: As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad.
Operator: Our next question comes from the line of Troy Langford with Cohen.
Troy Langford: Your line is open.
Overall I am pleased with the progress we made during Q1 and transitioning to the next commercial phase.
Troy Langford: Hi, thanks for taking our questions and congrats on all the progress, this is Troy Langford-Joe.
And our key customers expanded our base of prescribers and created a platform for strong growth.
Troy Langford: I just have a couple of quick questions around the Costello launch.
We continue to see examples of rapid growth in individual accounts and we have a number of physician advocates who are ready to champion settlement our colleagues.
Troy Langford: So, first of all, you all mentioned a couple of metrics to measure depth of uptake among the several key accounts on the call.
Excellent payer coverage and a strong health economic value proposition.
Troy Langford: So, do you all have a target number that you hope to achieve in this regard, and I guess how much more room do you think you'll have to grow these numbers?
And of course, we believe there is significant unmet even potential remaining for zillow or.
Troy Langford: And then I have a follow-up.
Our sales and marketing teams are focused on promoting the unique benefits of casella uninsured in the relevant customer systems and processes our updated electric.
Andrew Perry: Yeah, so, you know, right now in our top 100 organizations I would estimate, and this is really an estimate because it relies on a lot of kind of calculation, I'd estimate our depth is about 15%.
In addition, recent scientific presentations using real world data have begun to demonstrate the extent of the unmet need faced by our customers on the benefits that are seen with the wholesale.
Going forward, we anticipate more of this real world data and messaging with support for <unk> and we look forward to working with health care providers to ensure that experience to be communicated.
Andrew Perry: And so there's clearly significant growth there.
With that I'll now turn the call over to Raj for medical and clinical update.
Andrew Perry: Raj will then provide an update on some of our medical and clinical momentum, including, the real world data we recently presented at the 2022 NCCN meeting.
Andrew Perry: Now, you know, why is it only 15%?
Thanks, Andrew and good morning, everyone.
Andrew Perry: Well, in some of those top 100 organizations where we have been put in an advantageous place in the order sets, we're actually seeing depth of utilization that has to be, you know, two-thirds to almost 100%, I would guess.
Want to first discuss some compelling real world data that we recently presented at the National comprehensive cancer network or <unk> conference on the benefit that <unk> provides patients and then remind listeners of our current expectations. Our data from our ongoing phase II and phase III trials of power cycling.
Andrew Perry: It would really be the exception that a patient would not be given Costello in those organizations.
Andrew Perry: And when that happens, we see very, very rapid adoption.
The MCM data described the substantial burden of Milo suppression and its impact on healthcare resource utilization and the impact of pretreatment Machado cyclist can have on patients with small cell lung cancer receiving chemotherapy.
In this study the researchers conducted an analysis of 3277 patients who received chemotherapy alone and 21 patients who receive Tyler cyclic private chemotherapy, including 17, we received commercial tower site live in the real world setting.
Utilizing data from the Integra connect database.
Researchers quantified the frequency of grade three or greater Milo suppressive, hematological adverse events or aes, including neutropenia anemia or thrombocytopenia.
And associated healthcare resource utilization, including supportive care and all cause hospitalizations.
The results were consistent with those from our clinical trials showing that the use of <unk>. Prior to chemotherapy was associated with an approximately 50% reduction in patients with one grade three or greater IHA.
And a 74% reduction in the percent of all cause hospitalizations up to 21 days after treatment compared to patients who received chemotherapy alone.
Among patients with grade three or greater IHA ease in one blood cell lineage the use of China cyclists prior to chemotherapy was associated with an 86% reduction in thrombocytopenia, a 58% reduction in anemia.
On a 57% reduction in neutropenia compared to patients who did not receive trial cyclin.
Regarding patients with grade three or greater ease in two blood cell lineages. The useful China cycle was associated with a 100% reduction from 20% to zero in patients experiencing anemia, and thrombocytopenia and 76% reduction in both neutropenia and anemia.
At a 79% reduction in both neutropenia, and thrombocytopenia compared to patients receiving chemo alone.
The use of <unk> prior to chemotherapy eliminated grade three or greater haes, an all suite lineages in this evaluation.
No patient receiving China cycling experience Cytopenia in all three languages compared to 15% of patients who did not receive trailer cycle.
Importantly use a ton of cycle have also had a remarkable impact of all cause hospitalization.
Patients receiving charter cyclin prior to chemo was hospitalized between days eight and 16 after initiation of chemotherapy compared to just over 7% of patients receiving chemo alone.
And only one patient a four 8% <unk> was hospitalized between days one in 'twenty, one compared to 19% of patients who received chemo only.
These data are very compelling and we look forward to presenting more real world data as they become available.
Regarding our clinical program I can report that as of today, we remain on track to provide initial results from our ongoing clinical trials in the timelines we have previously disclosed.
Andrew Perry: But there are other circumstances, obviously, where they've just started to come on board.
First we currently expect initial data from our three ongoing phase II trials in the fourth quarter of this year.
These include the following.
Overall response rate in mono protection endpoints from preserved III.
<unk> with chemotherapy and immune checkpoint inhibitor <unk> in patients with bladder cancer, receiving first line treatment.
Although our response rate a mono protection endpoints from our trial 45 triple negative breast cancer patients designed to evaluate the additive combination potential of <unk> with <unk>, an antibody drug conjugate or ADC.
And initial data evaluating immune changes in the tumor microenvironment across the cancer immunity cycle from our mechanism of action study designed to confirm our understanding of the immune based mechanism of action of <unk> cyclin.
And its ability to modulate the tumor immune microenvironment.
Regarding our ongoing phase III trials. This has been a challenging time for all companies, including ours, who conduct clinical trials in Ukraine.
Our mitigation efforts have included working closely with our CRO partners on business continuity and assistance and relocating some Ukrainian trial patients, thereby allowing them to remain on schedule with these trials.
First we expect to release initial data, including results from model protection and overall response rate endpoint from preserve one.
Our ongoing line extension trial, a trial of <unk> in first line colorectal cancer in the first quarter of next year.
We experienced significant acceleration on patient enrollment in this trial during the first quarter.
Allowing us to complete enrollment of the protocol specified number of patients.
Yes.
However, we are now enrolling additional patients to make up for those from whom we may not be able to collect follow up data.
Due to the geopolitical situation in Ukraine.
Second we expect initial data, including interim results for overall survival from preserved III. Our first line triple negative breast cancer, a pivotal trial in 170 patients with PDL, one positive or negative tumors in the second half of next year.
This trial is designed to follow up on the exciting statistically significant improvements in survival, we observed in our phase II.
West Coast trial.
Raj Mallick: Finally, Jen will provide the financial results for the quarter, including a reminder that, our cash runway takes us into 2024.
Andrew Perry: So I just talked about MD Anderson.
With that I'll turn the call over to Jen for a review of our financial results for the first quarter of 2020 to churn.
Jen: Then I'll be back for some concluding comments.
Andrew Perry: We received their first order.
Thanks, Raj and good morning, everyone as will mentioned full financial results for the first quarter of 2022 are available in this morning's press release, and we will be in the 10-Q, which we intend to file today after market close.
Jack Bailey: With that, I will turn the call over to Andrew.
Andrew Perry: We're on formulary.
Andrew Perry: Thank you, Jack, and I'm glad to be with you today to spend some time on a variety of commercial, topics, including first quarter sales activity and leading indicators of growth.
Andrew Perry: And obviously their depth right now is low because they're right at the beginning of the curve of uptake.
Andrew Perry: This has been a quarter of significant commercial transition, and so we're also providing a, special snapshot of monthly sales growth during the first quarter to provide additional insight into this transition.
Andrew Perry: So that kind of average depth of 15% really represents a kind of skewed distribution.
Andrew Perry: We began the first quarter of 2022 with Costella still being promoted by BI, our co-promotion, partner since launch, and with the first few of our G1 Oncology sales account managers, or OSAMs, in the field. By mid-February, we had deployed our complete team of 34 G1 OSAMs, and by March 2nd, the, BI arrangement had been concluded. So in March, Costella was solely promoted by the G1 sales team for the first time.
Andrew Perry: But clearly there is potential when an organization uses Costello, sees the benefits of Costello for them to put it in a position where it is the expectation that it is used with every eligible extensive stage small cell lung cancer patient.
Andrew Perry: We continue to be encouraged by the market reception for Costella across payers, providers, and healthcare organizations. Payer coverage, brand awareness, and intention to prescribe all remain strong, and we're, seeing that translate into physician endorsement and account level trial and uptake with our largest customers.
Our total revenue for the first quarter of 2022 was $6 9 million comprised of net <unk> revenue of $5 $5 billion in license revenue.
Andrew Perry: Coming out of the first quarter, we believe we now have a commercial platform which will, allow us to generate growth through both breadth and depth, the prior quarter. When we look at the snapshot of Q1 growth data on a monthly basis, we can start to see the progress of this transition and the impact of our sales team.
Andrew Perry: So our goal there would be to make it the exception where Costello was not used.
Andrew Perry: In January 2022, we saw vial volumes nationally decline 2% compared with December 2021, but in those, seven territories with the G1 OSAM, vial volumes doubled.
$4 million.
Troy Langford: Okay, great.
License revenue for the quarter was primarily related to clinical trial reimbursements from thank you.
Troy Langford: That's really helpful.
Andrew Perry: And then just on the Costello sales floor, so now that it's launched, what additional levers do you all think you have that you can pull to increase Costello adoption?
Andrew Perry: Okay, great.
Andrew Perry: Yeah, so right now, you know, what I'm really excited about actually is the potential for peer-to-peer exchange because as we've developed more Costello advocates, and I've got to say I've had physicians actually call me through the switchboard to campaign for more Costello uptake in their accounts, and I've had to tell them that we're doing everything we can and that we appreciate their support doing it.
Dr.
Andrew Perry: But as our representatives, as our OSAMs get out there, they see that.
Cost of goods sold for the three months ended March 31, $2022 7 million as a reminder, the majority of the manufacturing costs related to fulfill our sales were incurred prior to FDA approval and therefore were recorded as R&D expense in prior periods.
Andrew Perry: They develop those physician champions, and those physicians decide to communicate their experience to the other physicians in the account.
Andrew Perry: And as we see nurses have the same experience and pharmacists have the same experience, making sure that that peer-to-peer exchange is happening becomes really a critical lever for us going forward.
Troy Langford: That really helps.
These costs will continue to impact the presentation of cost of adult in future periods until initial prelaunch inventory.
<unk>.
Troy Langford: Our next question comes from the line of Tony Butler with Roth Capital.
Our research and development expenses for the first quarter of 2022, or $26 3 million compared to $16 5 million for the first quarter of 2021.
Operator: Your line is open.
Tony Butler: Hi, this is Sasha again, and this one's for Jennifer.
The increase in R&D expense was primarily due to an increase in clinical trials that.
Accelerated enrollment in our CRC trial and ramping enrollment in our other phase III and phase II trial drives a large increase in R&D cost this quarter got it.
Its ramp and related costs were anticipated.
And because of ongoing supply chain issues due to COVID-19 and the mounting concerns in Ukraine in the first quarter, we made the decision to accelerate shipments of supplies and comments to our European sites. During this period.
Tony Butler: If possible, I missed your point about the 2022 R&D experience being front-loaded.
As a result, our R&D line, but the 2022 year is front loaded in the first quarter should be the highest quarter of R&D expense in 2022.
Jen: Could you please clarify?
Jen: Thanks.
Expect R&D to remain above the 2021 level of decrease as the year goes on.
Jen: Sure.
Our selling general and administrative expenses for the first quarter of 2022, or $26 7 million compared to $23 million for the first quarter of 2021.
Jen: So our number for first quarter, this is our highest level of activity in our trials, as Raj mentioned, our CRC trials. We were fully enrolled for our initial number of patients. That happened earlier in the quarter than we anticipated.
The increase in SG&A expenses quarter over quarter was largely due to an increase in personnel costs related to the completion of the hiring and deployment of our <unk>.
Andrew Perry: In February, we had 13 G1 OSAMs in the field until our full deployment mid-month, and we saw month-over-month volume growth of 5%.
We expect our quarterly SG&A expenses to vary somewhat quarter to quarter, but stay in a range similar to that of Q1 and for the rest of 2022.
Regarding our cash position as described in the press release. This morning, we ended the first quarter with cash and cash equivalents of $193 million compared to $221 2 million as of December 30, <unk> 2021, we expect this to be sufficient to fund our operations and capital expenditures into 2024.
Projection of cash runway into the future drop.
An additional $25 million on our debt facility with Hercules, which is currently available to us at our discretion has not yet been drawn down.
While we may receive a $13 million milestone payment from our partner sincere later this year conditional upon approval of <unk> in China that payment along with any future royalties has not been considered in our current cash guidance.
With that I'll turn the call back over to Jack for complexity.
Jack.
Jen: We're also adding additional patients for Ukraine.
Thank you Jonathan Raj, Andrew will and as always I want to thank people living with cancer for their inspiration.
For people living with cancer is at the core of what we do and who we are in Q1.
We remain driven and focus to ensure that we reach our goals for you and your family.
Jen: But on top of that, we did anticipate supply chain issues just from COVID, and then also anticipating the Ukraine conflict.
Before I close the call to final topics to cover.
Jen: We wanted to go ahead and move supplies into the European sites. So we did front-load a lot of those costs in the first quarter as well.
Jen: So because of those two things, we really anticipate this first quarter to be the heaviest spend in R&D.
First regarding with the investment as you saw in this morning's press release after completing our evaluation of partner partnering options and data from recent clinical trials in the highly competitive oral search space G. One is new the strategic decision to discontinue the program, including all clinical and partnering.
Jen: We will still be above 2021 levels, obviously, for R&D because we have all of these trials ongoing, but we should see a decrease throughout the year.
Operator: I'm showing no further questions at this time.
Efforts in order to focus our full attention.
Development and commercialization of trauma cycling.
<unk> will responsibly winding down all remaining clinical efforts for <unk> by the end of this year and reversed the rights back to the originator of the University of Illinois.
For modeling purposes, there are no additional financial obligations due to the originator, resulting from the conversion and it will be no more spend of significance on this program.
Second in terms of guidance as we have previously communicated we intend to provide formal guidance as soon as we have enough data on the performance and impact of our <unk> sales team to do so.
Given that our <unk> salespeople, it's only been fully deployed since mid February we do not yet have the required data to do so at this point, but we intend to provide formal guidance on our August call for the second quarter of this year.
As of today, we remain comfortable with analysts' consensus with the solid net sales in 2022 currently sitting just under $42 million.
Before we move on to Q&A, Let me just recap some key points that you have heard today.
Andrew Perry: After March 2nd, we no longer had support from the BI team. We saw four consecutive weeks of all-time high vial volumes, culminating in 38% monthly volume growth over February.
Andrew Perry: Just over 70% of our first quarter demand came from community hospitals or clinics, with the remainder being academic institutions.
At the beginning of March our sales team in the field and driving usage and our partnership with <unk>.
Andrew Perry: Moving to our account-level performance, as a reminder, one of the reasons for recruiting our own sales team was to bring in extensive account knowledge and provider relationships with the top 100 healthcare organizations, which treat around 50% of eligible patients with extensive-stage small cell lung cancer.
We are already seeing evidence of the impact of the sales team on driving growth.
First full month in the field March volumes grew by 38% over February after two roughly flat loans.
We haven't seen that once an institution trials castello tend to adopt it.
Andrew Perry: We were pleased to see Coacella trial and uptake in nine new top 100 organizations during, the first quarter, to bring the total number of top 100 organizations with Coacella utilization to 53 by end of Q1, and we see an overall reorder rate of around 80% in those 53 organizations.
Andrew Perry: Since the end of the quarter, we were informed that MD Anderson Cancer Center in Houston, had added Coacella to formulary, and we've seen their first order come through as well, of care within their order set for extensive stage small cell lung cancer.
Reorder rate among the 53 top 100 organizations using the drug remains over 80% and we continued to successfully shift the proportion of our business toward those top 100 organizations.
Andrew Perry: And in these examples, sales growth can occur very rapidly.
Andrew Perry: As a result of this focus on the large organizations with more patient potential, we have not only, added breadth with more of the top 100 organizations ordering, but we've been able to shift our priorities toward driving depth of uptake across the many clinics and accounts which form part of those larger organizations. In fact, our median vial volume in our top 100 organizations ordering has increased by 140% compared with Q4 of 2021 with Q1.
Our medical team continues to present and publish important new data I'm trying to <unk>, including the first real world data presented last month at MCC.
These data showed that the use of trial the cycle prior to chemotherapy was associated with a variety of measures of improved outcome, including a 74% reduction in.
The percent of all cause hospitalizations up to 21 days after treatment.
<unk> to patients who received chemotherapy alone.
We expect to provide initial results from three phase III trials later this year, the ABC combination and hallway and fill out our combination studies and data from our two ongoing pivotal trials in CRC and TWC next year, starting with CRC, David in the first quarter of 2020.
Three.
This means that as of today over the next 10 months, we expect to announce the results of four clinical trials, including one pivotal phase III expansion trial. We are excited about the potential for <unk> in all of these settings and we're also well along in developing important preclinical data on the potential synergistic.
Effective trunk cyclical on a variety of other novel anti cancer modalities.
We look forward to hosting an R&D day with you later this year to discuss these data ahead of the data Readouts from these trials.
Jack Bailey: I'd like to turn the conference back to Jack Bailey, CEO.
Thank you for taking the time this morning.
Jack Bailey: Thank you, Abigail.
Jack Bailey: As always, we look forward to keeping you all updated on our progress as we go, forward.
Speak again in this format in August on the second quarter 2022 call 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 question.
Jack Bailey: Certainly, thank you for joining us today, and we just hope you all stay well.
Jack Bailey: We look forward to being in touch soon.
Operator: Thank you.
Operator: This concludes today's conference.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.
Operator: Thank you for participating.
Our first question comes from Gil Blum with Needham <unk> Company. Your line is open.
Operator: You may now disconnect.
Operator: [music]
Good morning, everyone and thanks for taking our questions.
Andrew Perry: Last year the proportion of our total business from top 100 organizations hovered between 40% and 50%, and in the most recent months that proportion is now almost 60%. So not only have we been adding volume since bringing our new sales team on board, we have done so by accessing more top 100 organizations and by driving additional uptake within those organizations. As a result, we now believe we have more of a platform which can sustain our future growth ambitions.
First of all congratulations on building out your sales force. So maybe a question relating to that.
Andrew Perry: With the next phase of Cosella commercialization underway, we remain confident in the appeal of Cosella in the marketplace. Our new G1 sales team are fully deployed and are benefiting from an increase of in-person engagements as more clinics open up to appointments, programs, and exhibits.
Looks like you had a pretty big bump in March.
Month over month.
A bolus or should we continue to expect acceleration throughout the year is there any way to think about this.
Yes, Mexico.
Andrew Perry: Brand awareness remains over 80%, and among oncologists who are aware of Cosella, intention to use is over 85%, the path of those respondents saying they anticipate using Cosella in the next two months.
Andrew Perry: We also know that our Cosella messaging is resonating with customers. In Q1, our key messages outperformed the industry average for oncology brand message effectiveness.
Here, we were very pleased to see that bump in March and I think it's.
It's a product of our sales team being able to access those pulp on under the organization was being able to bring them onboard, but also being able to access more debts that we have.
Have continued to see growth in April and we'll comment more on the second floor for growth as we move through the year, but we do believe as I said on the call that we've created the platform to generate.
That type of growth going forward.
Okay.
And maybe considering your recent.
Guideline updates and the data you presented can you tell us a little bit about the feedback you've been getting from prescribing physicians on this information.
Yes Roger.
Yeah. So so these data were just our real world data that were not did not result in an update on the guidelines. It was presented at the conference.
And the feedback we've gotten has been very positive because really it's the first real world evidence showing that that casella works as we expected it to work and similar to what we saw in our clinical trials.
And particularly we were pleased to show the multi lineage benefits.
Alright.
And maybe last one considering we're getting closer to pivotal readout for that.
Colorectal cancer study that is.
Larger.
Occasion.
How do you think about a potential launch there do you expect synergies with small cell or would there be required.
Mention of the sales force.
Should we think about.
Thanks Kelly.
We're still evaluating cycle to market strategy would be.
I do think that our existing sales team has room in the bag to be able to incorporate suddenly several of our future indications into and to their capability today, but we'll evaluate that as we get closer to a potential registration.
Alright, let me that last one.
Now with the discontinuation of <unk>.
So how should we think from a cost saving perspective.
Opex going forward.
Yeah, Hi, John I think as I described I think we are.
Really expecting this R&D level to be the highest of the year for this quarter.
Thank you should see a decrease of that over that over the year.
Yes, really the bulk of activity we're in the middle of that right now we're seeing a very high level currently.
And I think specifically to <unk>.
Really look at that its definitiveness with small amount was being spent on it we will.
We will start by the end of this year just so we can conclude.
Things that you have to do to windup.
Studies that were existing on this but it's de Minimis overall.
Okay that makes sense. Thank.
Thank you so much for taking our questions. This morning, and congrats on your progress.
Thank you.
Our next question comes from the line of Calgary Pullman with BP AIG. Your line is open.
Good morning, and thanks for taking my questions.
My quick question is what I'll call back with Panther, I believe you'll gather Milo protection benefit data faster.
Then the survival data does it make sense.
To submit an NDA based on that data and file later for anti tumor activity.
Hi, Kevin This is Raj I can answer that yeah, that's exactly our intention.
When the amount of protection data are available in the first quarter of next year, assuming they are positive we will have discussions with the agency about filing.
Great and then about regarding bladder cancer study.
Yes, I understand the readout this year will mostly focus on Oahu, but any thoughts on durability or survival of perhaps you could just help us understand what duration of response and survival.
The primary endpoint is clinically meaningful.
Yes, Raj here again, I think since the trial is currently ongoing as you know.
The durability and PFS data, particularly PFS as the primary readout will require a longer follow up.
So we will report that the early data that we have but expect more meaningful data on PFS and durability next year.
I appreciate it.
Our next question comes from the line of Ed White with H C. Wainwright. Your line is open.
Good morning, Thanks for taking my questions.
So the first one is just on.
Gross to net if you could let us know what that.
Number is and.
Andrew Perry: And of course, reimbursement coverage remains excellent.
You mentioned reimbursement and I'm just wondering more about.
Andrew Perry: As a reminder, approximately 60% goes through Medicare and 30% through commercial pay.
Reimbursement at these top 100 accounts, but once they havent penetrated yet is reimbursement an issue are there any issues with those other accounts that you haven't been able to penetrate yet.
Hi, Ed it's Jim on gross to net were in the range I've given previously mid to high teens, we're continuing to believe that that will hold going forward.
Reiterating that guidance that we gave on our previous call.
Andrew Perry: We've had terrific coverage from the word go with very few payer rejections.
Yes, I don't think is on the on the reimbursement.
Coffee payer reimbursement for Casella has really been excellent right for launch as I said on the call.
Andrew Perry: Overall, I'm pleased with the progress we made during Q1 and transitioning to the next commercial phase. We retained our key customers, expanded our base of prescribers, and created a platform for strong growth.
Andrew Perry: We continue to see examples of rapid growth in individual accounts, and we have a number of physician advocates who are ready to champion Cosella with their colleagues.
Whether it constitutes authority or the top 100 adults I would say that that is not a barrier and I think there is.
Andrew Perry: We have excellent payer coverage and a strong health economic value proposition.
There is an opportunity with many of those call. It 100 to obviously educate them on the health economic value propositions that are payers that gravitate to early in the adoption cycle.
Andrew Perry: Yet, of course, we believe there is significant unmet need and potential remaining for Cosella.
Argument has only got more compelling and I think with these real world data continues to be compelling. So we are.
Dissipate more of those couple of hundreds come.
Coming on board as we move forward, but we do continue to see felt 100 accounts come on board regularly adjust that language and the others.
Great. Thanks, Andrew.
One last question for you I'm just curious is the 34 sales reps that you. Currently have are you right sized now or will you be adding more.
Sure.
Later in the.
Yes right.
We are fully deployed with the start before we don't have an intention fixed.
Based on the current potential.
That we hub.
I got a favorable start to hit.
But before individuals are very very capable people and I think we have a lot of potential to deliver for the business.
Okay. Thanks, Andrew Thanks for everyone for taking my questions.
Thank you.
Andrew Perry: Our sales and marketing teams are focused on promoting the unique benefits of Cosella and ensuring the relevant customer systems and processes are updated to leverage use. In addition, recent scientific presentations using real-world data have begun to demonstrate the extent of the unmet need faced by our customers, and outline the benefits that are seen with Cosella.
Our next question comes from the line of <unk> Rama with Jpmorgan. Your line is open.
Hey, guys. Thanks, so much for taking the question what portion of Casella detailing it in person versus versus virtual and how is this dynamic sort of trended over the first four months of the year with the sales force expansion and.
Andrew Perry: Going forward, we anticipate more of this real-world data emerging with support for Cosella, and we look forward to working with healthcare providers to ensure their experience can be communicated.
The difference in uptake if the primary detailing as in person versus virtual thanks, so much.
Yes.
Yes, we do see pretty much 50% of our details.
Details are in person, which is which is great and the highest progress.
Q1 over previous quarter.
Theres the background trends of corporate there we've got the changeover of our sales team going on as well, so, but we do see access opening up as well many of our top accounts.
Closed down to everyone, including in many cases caregivers of patients or family members of patients.
Or are they have set a calendar when they are opening up for those personal interactions as well. So I do think this will continue to get better.
Other things on the call it's not just those in person.
<unk> face complex it's also.
Programs and service opportunities to make sure that folks are educated on how to administer the product as well as our exhibit.
The customers are not having as well.
Thanks.
Between between live or virtually.
Yeah in terms of.
Really on the legs.
Empire between lines and virtual so I don't really have data to back, but I would say that the efficiency of live interaction is certainly much higher because when you are in the office you don't get the opportunity just to see multiple stakeholders at the exact same time essentially help them in the room together, so a lot of data to back up the effect.
But.
I'm pretty sure it's a much more efficient method.
Thanks, so much for taking my question.
Thank you Ron a pump.
Andrew Perry: With that, I'll now turn the call over to Raj for medical and clinical update.
Our next question comes from the line of Tony Butler with Roth Capital. Your line is open.
Raj Mallick: Raj?
Good morning, this is Steven so Tony.
Question is on small cell lung cancer patients I wonder if you can shed.
Some lights on.
Patients completing all of the chemo doses.
And perhaps it.
It would be also great to know it's good.
Could tell us.
The average number of customers that.
That each patient get frontline and second line settings. Thank.
Thank you.
Raj Mallick: Thanks, Andrew, and good morning, everyone.
Yes. Thanks for the question I can give you some of the information about half switches.
Over 90% of our patients are first line. So the vast majority of our first line.
On average we anticipate that they probably go through about claim files.
We'll spend a lot of still 24, what would be the labeled.
Dosing for first line patients about.
Rich I would estimate that we probably see about 20.
So hopefully that helps and can tell me.
More detailed information that Youre looking for.
Raj Mallick: I'd like to first discuss some compelling real-world data that we recently presented at the National Comprehensive Cancer Network, or NCCN, conference, on the benefit that Cosella provides patients and then remind listeners of our current expectations for data from our ongoing Phase II and Phase III trials of trialocycline.
About ready to hand that this bank.
Raj Mallick: The NCCN data describe the substantial burden of malusuppression and its impact on healthcare resource utilization, and the impact that pretreatment with trialocycline can have on patients with small-cell lung cancer receiving chemotherapy.
Raj Mallick: In the study, the researchers conducted an analysis of 3,277 patients who received chemotherapy alone, and 21 patients who received trialocycline prior to chemotherapy, including 17 who received commercial trialocycline in the real-world setting.
As we collect more real world information and we see the real world information start to reflect what we saw in the clinical trials will be.
Interesting to.
More of a picture of them.
Raj Mallick: Utilizing data from the Integra Connect database, the researchers quantified the frequency of, grade 3 or greater myelosuppressive hematological adverse events, or HAEs, including neutropenia, anemia, or thrombocytopenia, and associated healthcare resource utilization, including supportive care, and all-cause hospitalizations. The results were consistent with those from our clinical trials, showing that the use, of telacycline prior to chemotherapy was associated with an approximately 50% reduction in patients with one grade 3 or greater HAE, and a 74% reduction in the percent of all-cause hospitalizations up to 21 days after treatment, compared to patients who received chemotherapy alone.
Thank you Andrew.
Raj Mallick: Regarding patients with grade 3 or greater HAEs in one blood cell lineage, the use of, telacycline prior to chemotherapy was associated with an 86% reduction in thrombocytopenia, a 58% reduction in anemia, and a 57% reduction in neutropenia, compared to patients who did not receive telacycline.
As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad. Our next question comes from the line of Troy Lindbergh with Cowen Your line is open.
Raj Mallick: Regarding patients with grade 3 or greater HAEs in two blood cell lineages, the use of, telacycline was associated with a 100% reduction from 20% to 0 in patients experiencing anemia and thrombocytopenia, a 76% reduction in both neutropenia and anemia, and a 79% reduction in both neutropenia and thrombocytopenia, compared to patients receiving chemo alone.
Raj Mallick: The use of telacycline prior to chemotherapy eliminated grade 3 or greater HAEs in all, three lineages in this evaluation. No patient receiving telacycline experienced cytopenia in all three lineages, compared, to 15% of patients who did not receive telacycline.
Raj Mallick: Importantly, use of telacycline also had a remarkable impact on all-cause hospitalization. No patient receiving telacycline prior to chemo was hospitalized between days 8 and, 16 after initiation of chemotherapy, compared to just over 7% of patients receiving chemo alone. And only 1 patient, or 4.8%, who received telacycline was hospitalized between days, 1 and 21, compared to 19% of patients who received chemo only.
Raj Mallick: These data are very compelling and we look forward to presenting more real-world data, as they become available.
Hi, Thanks for taking our questions and congrats on all the progress. This is Jerry on for Joe I just have a quick couple of quick questions around the <unk> launch. So first of all you all mentioned a couple of metrics to measure depth of uptake among the several key accounts on the call. So do you have a target number that you hope to achieve in this regard and I guess, how much more room do you think.
Raj Mallick: Regarding our clinical program, I can report that as of today, we remain on track to provide, initial results from our ongoing clinical trials in the timelines we have previously disclosed.
Raj Mallick: First, we currently expect initial data from our three ongoing Phase II trials in the fourth, quarter of this year.
Raj Mallick: These include the following.
Raj Mallick: Overall response rate and model protection endpoints from PRESERVE-3, our study of telacycline, with chemotherapy and the immune checkpoint inhibitor Evalumab in patients with bladder cancer receiving first-line treatment.
Raj Mallick: Overall response rate and model protection endpoints from our trial in 45 triple-negative, breast cancer patients designed to evaluate the additive combination potential of telacycline with Tredelne, an antibody drug conjugate, or ADC, and Initial Data Evaluating Immune Changes in the Tumor Microenvironment Across the Cancer Immunity Cycle from our Mechanism of Action Study designed to confirm our understanding, of the immune-based mechanism of action of tricycline and its ability to modulate the tumor immune microenvironment.
Raj Mallick: Regarding our ongoing Phase III trials, this has been a challenging time for all companies, including ours, who conduct clinical trials in Ukraine. Our mitigation efforts have included working closely with our CRO partners on business, continuity and assistance in relocating some Ukrainian trial patients, thereby allowing them to remain on schedule with these trials.
Youll have to grow these numbers and then I have a follow up.
Canada.
Other than a couple of hundred organizations I would estimate and this is really an estimate because it relies on a lot of kind of.
Calculations I would estimate that thats about 15%.
And so there is clearly significant growth we are now.
He is the only 15% while in some of those top 100 organizations, where we have been.
On pages, placing the orders that we are actually seeing that up utilization that has to be.
Two thirds to almost 100% other guests that would really be the exception, but a patient with <unk> all of those organizations.
<unk>, we see very very.
Rapid adoption.
But there are other circumstances, obviously further jumpstart come onboard so I just talked about beyond listen we've received our first order world vulnerability.
And obviously their best right.
Is low because they are right at the beginning of the uptake.
<unk> kind of operators that the 15% really represents.
Our kind of skewed distribution.
But clearly there is potential but an organization users <unk> the benefits of cross sell or for them to put us in a position.
Is the expectation that excuse, but a great eligible extensive stage small cell lung cancer patient.
Goal, there would be too to make it the exception vertical sale it was adult use.
Okay, Great. That's very helpful. And then just on the consoles salesforce, so now that the mines.
Additional levers do you all think you have to that you can pull to increase cushal adoption.
Yes, so right now.
What I'm really excited about it actually has the potential for peer to peer exchange because as we develop more co sell advocates.
Office possession virtually call me through the switchboard to campaign for more cross sell uptake on the archives.
Tell them that we're doing everything we can.
And we appreciate their support doing it.
But as our.
Representatives of <unk>.
They see that.
They develop those physician champions on those physicians the site too.
Communicate their experience to bear to be honest.
Physicians on the account and as we see nurses same experience of bonuses at the same experience, making sure that about peer to peer exchanges happening. The company is really a critical lever for us going forward.
Okay, Great that's really helpful.
Our next question comes from the line of Tony Butler with Roth Capital. Your line is open.
Hi, This is caution again and this one's for Jennifer its possible I missed your point about the 2022 R&D expenses being front of it could you. Please clarify thanks.
Sure so.
Raj Mallick: First, we expect to release initial data, including results from model protection and, overall response rate endpoints from PRESERVE-1, our ongoing line extension trial of tricyclic, in first-line colorectal cancer in the first quarter of next year. We experienced significant acceleration in patient enrollment in this trial during the, first quarter, allowing us to complete enrollment of the protocol-specified number of patients.
For first quarter. This is our highest level of activity in our trials as Raj mentioned, our CRC trial.
Raj Mallick: However, we are now enrolling additional patients to make up for those from whom we may not, be able to collect follow-up data due to the geopolitical situation in Ukraine.
Raj Mallick: Second, we expect initial data, including interim results for overall survival from, PRESERVE-3, our first-line triple-negative breast cancer pivotal trial in 170 patients with PD-L1 positive and negative tumors in the second half of next year.
It fully enrolled for initial number of patients that happened earlier in the quarter than we anticipated. We're also.
Raj Mallick: This trial is designed to follow up on the exciting, statistically significant improvements, in survival we observed in our Phase II triple-negative breast cancer trial.
They are adding additional patients are ukraine, but on top of that we did anticipate supply chain issues.
From Covid and then also anticipating the Ukraine conflict. We wanted to go ahead and move supplied into the European sites. So we did frontload a lot of those costs in the first quarter as well so because of those two things we really anticipate this first quarter to be the heaviest spend in R&D, we would still be above 2021 levels, obviously for R&D.
We have all of the trials, but we should see a decrease throughout the year.
Raj Mallick: With that, I'll turn the call over to Jen for a review of the financial results for the first quarter of 2022.
Jen: Jen?
Okay. That's helpful.
Okay great.
Yes.
Okay.
I'm showing no further questions at this time I would like to turn the conference back to Jack Bailey CEO .
Jen: Thanks, Raj.
Thank you Abigail.
As always we look forward to keeping you all updated on our progress as we go forward certainly thank you for joining us today and we just hope you all stay well, we look forward to being in touch and thank you.
Jen: And good morning, everyone.
Jen: As Will mentioned, full financial results for the first quarter of 2022 are available, in this morning's press release and will be in the 10-Q, which we intend to file today after market close. Our total revenue for the first quarter of 2022 was $6.9 million, comprised of net COSELLO, revenue of $5.5 million and license revenue of $1.4 million. Our license revenue for the quarter was primarily related to clinical trial reimbursement from, EQRX and CENSEAR.
Jen: Cost of goods sold for the three months ended March 31, 2022, was $0.7 million. As a reminder, the majority of the manufacturing costs related to COSELLO sales were incurred, prior to FDA approval and, therefore, were recorded as R&D expense in prior periods. These costs will continue to impact the presentation of cost of goods sold in future periods until, initial pre-launch inventory is both depleted.
Jen: Our research and development expenses for the first quarter of 2022 were $26.3 million, compared to $16.5 million for the first quarter of 2021. The increase in R&D expense was primarily due to an increase in clinical trial spend. Accelerated enrollment in our CRC trials and ramping enrollment in our other phase three, and phase two trials drives a large increase in R&D costs this quarter.
Ed White: So, the first one is just on gross to net, if you could let us know what that number is.
Jen: This ramp and the related costs were anticipated. And because of ongoing supply chain issues due to COVID and the mounting concerns in, Ukraine in the first quarter, we made the decision to accelerate shipments of supplies and Comeds to our European sites during this period.
Ed White: And, you know, you mentioned reimbursement.
Jen: As a result, our R&D line for the 2022 year is front-loaded, and the first quarter should, be the highest quarter of R&D expense in 2022. We expect R&D to remain above 2021 levels but decrease as the year goes on. Our selling, general, and administrative expenses for the first quarter of 2022 were $26.7 million, compared to $23 million for the first quarter of 2021. The increase in SG&A expenses quarter-over-quarter was largely due to an increase in personnel, costs related to the completion of the hiring and deployment of our OSAMs.
Ed White: I'm just wondering more about reimbursement at these top 100 accounts.
Jen: We expect our quarterly SG&A expenses to vary somewhat quarter-to-quarter but stay in a, range similar to that of Q1 for the rest of 2022. Regarding our cash position, as described in the press release this morning, we ended, the first quarter with cash and cash equivalents of $183 million compared to $221.2 million as of December 31, 2021. We expect this to be sufficient to fund our operations and capital expenditures into 2024. This projection of cash runway includes the future draw of an additional $25 million on, our debt facility with Hercules, which is currently available to us at our discretion but has not yet been drawn down.
Ed White: So, for those accounts that haven't penetrated yet, has reimbursement been an issue, or are there any issues with those other accounts that you haven't been able to penetrate yet?
Jen: While we may receive a $13 million milestone payment from our partners this year, later, this year, conditional upon approval of trial and cycle of in China, that payment, along with any future royalties, has not been considered in our current cash guidance.
Jen: With that, I'll turn the call back over to Jack for a few closing comments.
This concludes today's conference. Thank you for participating you may now disconnect.
Jack Bailey: Jack?
Jack Bailey: Thank you, Jen, Raj, Andrew, and Will.
Jack Bailey: And as always, I want to thank people living with cancer for their inspiration.
Jack Bailey: Caring for people living with cancer is at the core of what we do and who we are at G1.
Jack Bailey: We remain driven and focused to ensure that we reach our goals for you and your family.
Jack Bailey: Before I close the call, I have two final topics to cover.
[music].
Jack Bailey: First, regarding Rita Vestrand, as you saw in this morning's press release, after completing, our evaluation of partnering options and data from recent clinical trials in the highly competitive oral CERN space, G1 has made a strategic decision to discontinue the program, including all clinical and partnering efforts, in order to focus our full attention on the development and commercialization of trial and cycle. G1 will responsibly wind down all remaining clinical efforts for Rinta Vestrand by the, end of this year and revert the rights back to the originator, the University of Illinois.
Jack Bailey: Importantly, for modeling purposes, there are no additional financial obligations due, to the originator resulting from the reversion and there will be no more spend of significance on this program.
Jack Bailey: Second, in terms of guidance, as we have previously communicated, we intend to provide formal, guidance as soon as we have enough data on the performance and impact of our G1 sales team to do so. Given that our G1 sales team has only been fully deployed since mid-February, we do not, yet have the required data to do so at this point, but we intend to provide formal guidance on our August call for the second quarter of the year.
Jack Bailey: As of today, we remain comfortable with analyst consensus for TressellaNet sales in 2022, currently sitting just under $42 million.
Jack Bailey: Before we move on to Q&A, let me just recap some key points that you have heard today.
Jack Bailey: As of the beginning of March, our sales team is in the field in driving usage and our partnership with BI has ceased. We are already seeing evidence of the impact of the sales team on driving growth. In their first full month in the field, March volume grew by 38% over February after two roughly flat months. We have seen that once an institution tries Cocella, they tend to adopt it.
Jack Bailey: Our reorder rate among the 53 top 100 organizations using the drug remains over 80% and we continue to successfully shift the proportion of our business toward those top 100 organizations. Our medical team continues to present and publish important new data on Trilocycline, including the first real-world data presented last month at NCCM. These data show that the use of Trilocycline prior to chemotherapy was associated with a variety of measures of improved outcome, including a 74% reduction in the percent of all-cause hospitalizations up to 21 days after treatment, compared to patients who received chemotherapy alone.
Jack Bailey: We expect to provide initial results from three Phase II trials later this year, the ABC combination, MOA, and bladder combination studies, and data from our two ongoing pivotal trials in CRC and TMDC next year, starting with CRC data in the first quarter of 2023. This means that as of today, over the next 10 months, we expect to announce the results of four clinical trials, including one pivotal Phase III line extension trial.
Jack Bailey: We are excited about the potential for Trilocycline in all of these settings, and are also well along in developing important preclinical data on the potential synergistic effect of Trilocycline on a variety of other novel anti-cancer modalities.
Jack Bailey: We look forward to hosting an R&D day with you later this year, to discuss these data ahead of the data readouts from these trials.
Jack Bailey: Thank you for taking the time this morning.
Jack Bailey: We will speak again in this format in August on the second quarter 2022 call.
Jack Bailey: With that, I will close the call and turn it over to Q&A.
Operator: Operator, would you please remind our listeners how to ask a question?
Operator: As a reminder, to ask a question, you will need to press Jar 1 on your telephone, To withdraw your question, press the pound key.
Operator: Our first question comes from Gil Bloom with Needham & Company.
Gil Blum: Your line is open.
Gil Blum: Good morning, everyone, and thanks for taking our questions.
Gil Blum: First of all, congratulations on rolling out your Salesforce.
Gil Blum: So maybe a question relating to that.
Gil Blum: It looks like you had a pretty big bump in March, month over month.
Gil Blum: Do you think this is a bonus, or should we continue to expect acceleration, throughout the year?
Gil Blum: Is there any way to think about this?
Andrew Perry: Yeah, thanks, Gil.
Andrew Perry: It's Andrew here.
Andrew Perry: We were very pleased to see that bump in March, and I think it's a product, of our sales team being able to access those top 100 organizations, being able to bring them on board, and also being able to access more debts there.
Andrew Perry: We have continued to see growth in April, and we'll comment more, on second quarter growth as we move through the year.
Andrew Perry: But we do believe, as I said on the call, that we've created a platform, to generate this type of growth going forward.
Andrew Perry: Okay.
Jen: Hi, and it's Jen.
Gil Blum: Okay, and maybe considering your recent NCCN guideline updates and the data you presented, can you tell us a little bit about the feedback you've been getting from prescribing physicians on this information?
Jen: On gross to net, we're in the range I've given previously, mid to high teens. We're continuing to believe that that will hold going forward.
Gil Blum: Yeah, Raj, why don't you take that one?
Jen: So, I'm just reiterating that guidance that we gave on a previous call.
Raj Mallick: Yeah, so these data were just the real-world data.
Andrew Perry: Yeah, and I think, Ed, on the reimbursement, third-party payer reimbursement for Coasella has really been excellent right from launch, as I said on the call.
Raj Mallick: They did not result in an update in the guidelines. It was presented at the conference.
Andrew Perry: In terms of whether it constitutes a barrier at the top 100 that have not adopted, I would say that that is not a barrier.
Raj Mallick: And the feedback we've gotten has been very positive because really it's the first real-world evidence, showing that Cocella works as we expected it to work and similar to what we saw in our clinical trials. And particularly, we were pleased to show the multilineage benefits.
Andrew Perry: I think there's an opportunity with many of those top 100s to actually educate them on the health economic value propositions, that our payers gravitate to early in the adoption cycle.
Raj Mallick: All right.
Andrew Perry: And that argument has only got more compelling.
Gil Blum: And maybe a last one, considering we're getting closer to pivotal readout for the colorectal cancer study, and that is a much larger indication, how do you think about a potential launch there?
Andrew Perry: And I think with these real-world data, it continues to be compelling.
Gil Blum: Do you expect synergies with small cell, or would there be required a big expansion of the sales force?
Gil Blum: How should we think about it?
Okay.
Jack Bailey: Thanks, Gil.
Jack Bailey: At this point, we're still evaluating what that go-to-market strategy would be.
Yes.
Jack Bailey: I do think that our existing sales team has room in the bag to be able to incorporate certainly several of our, future indications into their capability today, but we'll evaluate that as we get closer to a potential registration.
Jack Bailey: All right.
Gil Blum: And maybe a last one.
Gil Blum: Now with the discontinuation of rental, how should we think from a cost-saving perspective on OPEX looking forward?
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Jen: Hi, Gil.
Jen: It's Jen.
Jen: I think, as I described, we're really expecting this R&D level to be the highest of the year for this quarter, so I think you should see a decrease of that over the year. And, yeah, really the bulk of activity, we're in the middle of it right now, so we're seeing a very high level currently.
Jack Bailey: And I think specifically to rental, Gil, you know, we really look at that as de minimis.
Jack Bailey: What small amount was being spent on it will stop by the end of this year, just so we can conclude all the normal things that you have to do to wind up the studies that were existing on this.
Jack Bailey: But it's de minimis overall.
Gil Blum: Okay.
Gil Blum: That makes sense.
Gil Blum: Thank you so much for taking our questions this morning, and congrats on your progress.
Gil Blum: Thank you, Gil.
Operator: Our next question comes from the line of Kaveri Pullman with BTIG.
Operator: Your line is open.
Yes.
Kaveri Pullman: Good morning, and thanks for taking my questions.
Kaveri Pullman: My first question is for colorectal cancer.
Kaveri Pullman: I believe you gather myeloprotection benefit data faster than the survival data.
Kaveri Pullman: Does it make sense to submit an NDA based on that data and file later for anti-tumor activity?
Raj Mallick: Hi, Kaveri.
Raj Mallick: This is Raj.
Raj Mallick: I can answer that.
Raj Mallick: Yeah, that's exactly our intention.
Raj Mallick: So when the myeloprotection data are available in the first quarter of next year, assuming they're positive, we will have discussions with the agency about filing.
Kaveri Pullman: Regarding bladder cancer study, I understand the readout this year will mostly focus on, ORR, but any thoughts on durability or survival?
Kaveri Pullman: Perhaps you could just help us understand what duration of response and or survival, which is the primary endpoint here, is clinically meaningful?
Raj Mallick: Yeah, Raj here again.
Raj Mallick: You know, I think since the trial is currently ongoing, as you know, the durability and PFS data, particularly PFS as the primary readout, will require a longer follow-up.
Raj Mallick: So, we'll report the early data that we have, but expect more meaningful data on PFS and durability next year.
Kaveri Pullman: Appreciate it.
Kaveri Pullman: Thanks.
Operator: Our next question comes from the line of Ed White with HC Wainwright.
Operator: Your line is open.
Ed White: Good morning.
Ed White: Thanks for taking my questions.
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