Q2 2022 G1 Therapeutics Inc Earnings Call

Okay.

Operator: Good day and thank you for standing by.

Operator: Welcome to the G1 Therapeutics Second Quarter 2022 Financial Results Call.

Good day, and thank you for standing by welcome to the G. One therapeutics second quarter 2022 financial results call.

Operator: At this time, all participants are in the listen-only mode.

Operator: After the speaker's presentation, there will be a question and answer session.

Operator: To ask a question during the session, you will need to press star 11 on your telephone.

Operator: You will then hear an automated message advising that your hand is raised.

At this time all participants are in a listen only mode.

Rajesh Malik: As a result, the time until a patient could become eligible for our trial has pushed out, which appears to be one of the factors that has contributed to slower enrollment. We're in the process of mitigating this in a variety of ways, including adding additional, sites.

Rajesh Malik: The ADC combination study is solely a U.S.-based study, and since CTRUDA's approval at the end of 2020 – or 2021, I guess it was, that is really – it's only impacting the U.S. sites in terms of a bit more watch and wait and these patients taking longer to get to a time where they would be eligible for our study.

Troy Langford: Okay, great.

After the speaker's presentation, there will be question and answer session.

Ask a question during the session you will need to press star one on your telephone you will then hear in automated message advising that you're having this race.

Operator: Please be advised that today's conference is being recorded.

Please be advised that today's conference is being recorded I.

Operator: I would now like to hand the conference over to your first speaker for today, Mr. William Roberts.

I would now like to hand, the conference over to your first speaker for today, Mr. William Roberts. Please go ahead.

William Roberts: Please go ahead.

Rajesh Malik: As a result, we'll have preliminary safety data late this year from as many patients, as possible, and the bulk of the data, including efficacy, next year.

Rajesh Malik: So no on the first line Phase III study, no impact.

Troy Langford: Thanks for all the color.

Thank you Mike Good morning, everyone and welcome to the G. One conference call to discuss our second quarter 'twenty, two financial results and business update.

The press release on these financial results was issued this morning.

We found in the news section of our corporate website, you want therapeutics Dot com.

I'm going to call. The team will provide a business overview of the second quarter of 'twenty, two including an update on our clinical programs and our commercial progress in that period with the seller, which was approved and commercially available to decrease the incidence of chemotherapy induced mild depression and adult patients when administered prior to apply.

Containing regimen or jumping chicken containing regimen.

That's such a small cell lung cancer or E. S. CLC.

A question and answer session will follow the prepared remarks.

Before I begin I want to remind you that today's webcast contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

Statements represent managements judgment as of today and May involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements.

For more information on such risks and uncertainties. Please refer to our filings with the Securities and Exchange Commission, which are available from the SEC or on our corporate website.

Any forward looking statements represent our views as of today August 3rd 2022.

Joining me on the call today are Jeff Bailey, our Chief Executive Officer.

Andrew carry our Chief commercial Officer, Raj Malik Chief Medical Officer, and Jen Moses, our Chief Financial Officer.

With that I'll turn the call over to Jack.

Mikey: Thank you, Mikey.

Rajesh Malik: It's worth noting that this landscape evolution is a U.S. effect only.

Kari Polman: For TNBC Trudelvy, do you expect the use of Keytruda in the new adjuvant-adjuvant setting, to impact trialocyclic efficacy in the first-line setting, I mean, in patients who previously received and progressed on this immunotherapy?

Troy Langford: Thank you, Troy.

William Roberts: Good morning, everyone, and welcome to the G1 Conference Call to discuss our Second Quarter 2022 Financial Results and Business Update.

Rajesh Malik: We are not seeing these enrollment hurdles in the global pivotal TMBC trial.

Rajesh Malik: Hey, Kaveri, this is Raj.

Operator: No further questions at this time.

Thanks will.

Everyone. Thanks for joining us on the call.

William 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.

Rajesh Malik: Finally, there is significant strategic importance to expediting the evaluation of the combination, of trabecyclin with a checkpoint inhibitor and chemotherapy in first-line non-small-cell lung cancer.

Rajesh Malik: I can take that one.

Jack Bailey: I would now like to turn the conference back to Mr. Jack Bailey for closing remarks.

Headline is that we have achieved a variety of important foundational milestones that we set for ourselves for the first half of 2022.

Jack Bailey: Great.

William Roberts: On this morning's call, the team will provide a business overview of the second quarter of 2022, including an update on our clinical programs and our commercial progress in that period with Cocella, which is approved and commercially available to decrease the incidence of chemotherapy-induced myelodysuppression in adult patients when administered prior to a platinum adipocyte-containing regimen or nopatican-containing regimen for extensive-stage small cell lung cancer, or ESSCLC.

Rajesh Malik: As such, rather than supporting an investigator-initiated study, we're exploring other means of evaluation, such as sponsoring it ourselves or with a partner.

Jack Bailey: Thank you, Operator.

Briefly touch on three of them.

First I'm proud of the decisiveness with strategic execution shown by the <unk> team over the past few quarters regarding the commercialization of <unk> we.

<unk> issue is leading to better access top target prescribers of accounts, we made the right decisions quickly and execute them decisively to correct course, including building our own to sell a focused sales team.

As a result during the quarter, we saw an inflection in sales.

Momentum we experienced in the quarter is evident as our team worked to bring this innovative drug to more patients with small cell lung cancer than ever before.

Costar is an important and unique drug it is proactively administered and covers multiple lineages, enabling oncologist for the first time to reduce or prevent the serious hematologic side effects of chemotherapy preemptively rather than waiting for treating them reactively.

With a variety of single lineage interventions, which of course carry their own unintended and potentially dangerous consequences.

William Roberts: A question and answer session will follow the prepared remarks.

As Youll hear from Andrew we experienced good growth during the quarter, including growing vinyl volume by almost 60% period over period.

Second the team has executed the majority of our clinical programs extremely well during a period of significant headwinds, including COVID-19, and the ongoing crisis in Ukraine, which impacted many clinical trials of different products.

Most importantly, we achieved an important milestone in the second quarter of completing enrollment in our phase III line extension trial, a trial is cyclic and 326 participants with metastatic colorectal cancer.

We expect the initial results, including those from the primary endpoint in the first quarter of 2023.

And as you read in this morning's press release, we recently also had key enrollment milestones in both our phase III bladder.

Our phase II trial assessing the mechanism of action for travelers cycling.

Further as you will hear from Raj, we expect to provide the initial results from each of our five ongoing phase two and phase III clinical trials over the coming 18 months starting in the fourth quarter of this year.

Third from a corporate perspective, we were recently very pleased to share that the China National Medical products Administration had conditionally approved a marketing authorization for Casella, which was jointly developed for use in greater China and partnership with some <unk>.

As a result, <unk> will receive a $13 million milestone payment from sincere part of a total milestone consideration of up to $156 million.

We also expect to receive double digit royalties on future annual net sales of <unk> in China, which John will describe later in the call.

William Roberts: Before we begin, I want to remind you that today's webcast contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Rajesh Malik: We will provide an update on this as soon as possible and also keep you abreast of our, ongoing ISS program as those trials initiate.

Rajesh Malik: You know, we do not, you know, based on the mechanism of action of trialocyclic and its, impact on various aspects of that cancer immunity cycle, we think that there is a potential that we could work even in patients who have previously received an immune checkpoint inhibitor.

Jack Bailey: As always, we look forward to keeping you updated as we progress.

This morning, I will first ask Andrew to cover our recent commercial progress, including an update on our efforts of our new field sales team during the second quarter of 2022.

<unk> will then provide a snapshot of our clinical momentum, including timelines and data expectations.

Finally, John will provide the financial results for the quarter, including an update on financial ramifications of this and <unk> approval and a reminder, that our cash runway takes us into 2024 and I'll be back for some concluding comments with that I'll turn the call over to Andrew Thank.

William Roberts: Such statements represent management's 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.

Rajesh Malik: With that, I'll turn the call over to Jen for a review of the financial results for, the second quarter of 2022.

Rajesh Malik: Great.

Jack Bailey: Thank you for joining us today and certainly hope you all stay well.

William Roberts: Any forward-looking statements represent our views as of today, August 3, 2022. Joining me on the call today are Jack Bailey, our Chief Executive Officer, Andrew Perry, our Chief Commercial Officer, Raj Malik, our Chief Medical Officer, and Jen Moses, our Chief Financial Officer.

Jen Moses: Thanks, Raj.

Jack Bailey: Thank you.

William Roberts: And with that, I'll turn the call over to Jack.

Jen Moses: And good morning, everyone.

Kari Polman: Okay.

Operator: This concludes, today's conference call.

Thank you Jonathan Collins to be with you today to provide an update on a number of commercial opex, including second quarter sales performance and leading indicators of growth.

Jack Bailey: Thanks, Will, and good morning, everyone.

Kari Polman: Then, congrats on the progress.

Operator: Thank you all for participating.

Jack Bailey: Thanks for joining us on the call.

Kari Polman: Thank you, Kaveri.

Operator: You may now disconnect.

Operator: The conference will begin shortly.

The second quarter was our first complete Julien Julien <unk> promoted solely by our own team of GE, one oncology sales account managers or <unk> following their field deployment in mid February on the termination of our co promotion agreement with Boehringer Ingelheim in early March.

Operator: To raise your hand during Q&A, you can dial star 1-1.

Operator: Our next question is from Tony Butler of Ross Capital.

Tony Butler: Your line is open.

Tony Butler: Yes.

Jack Bailey: Today's headline is that we have achieved a variety of important foundational milestones that we set for ourselves for the first half of 2022.

Tony Butler: Good morning.

Our goal in the second quarter.

<unk> made significant volume growth with a focus on the top 100 organizations, who see around 50% of patients with extensive stage small cell lung cancer.

Jack Bailey: I'll briefly touch on three of them. First, I'm proud of the decisiveness and strategic execution shown by the G1 team over the past few quarters regarding the commercialization of Coacela. We identified the issue of needing to better access top target prescribers and accounts. We made the right decisions quickly and executed decisively to correct course, including building our own Coacela-focused sales team. And as a result, during the quarter, we saw an inflection in sales.

Jack Bailey: The momentum we experienced in the quarter is evident as our team worked to bring this innovative drug to more patients with S small cell lung cancer than ever before.

We also wanted to build a platform for future growth by demonstrating both breadth and depth of utilization across the U S.

Jack Bailey: Coacela is an important and unique drug. It is proactively administered and covers multiple lineages, enabling oncologists for the first time to reduce or prevent the serious hematologic side effects of chemotherapy preemptively, rather than waiting for treating them reactively with a variety of single lineage interventions, which, of course, carry their own unintended and potentially dangerous consequences.

Tony Butler: Andrew, you made a comment about July, and then you made a statement about some sales, initiatives, and I didn't quite get what those sales initiatives might be.

Beginning with sales activity we have.

Jen Moses: As Will mentioned, full financial results for the second 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 second quarter of 2022 was $10.6 million, comprised of net, Cosella revenue of $8.7 million and license revenue of $1.9 million, compared to $6.6 million of total revenue for the same period in 2021.

Jen Moses: Cost of goods sold for the three months ended June 30, 2022, was $1 million, compared to, $0.8 million for the same period in 2021.

Jen Moses: As a reminder, a portion of the manufacturing costs related to Cosella sales were incurred, prior to FDA approval and, therefore, were recorded as R&D expense in prior periods. The majority of prelaunch inventory has been depleted, and the treatment of these costs, will now have a nominal impact on cost of goods sold going forward.

Ended the quarter with $8 $7 million in net sales on massawa, representing nearly 60% final volume growth quarter over quarter.

Jen Moses: Our research and development expenses for the second quarter of 2022 were $20.8 million, compared to $18.8 million for the second quarter of 2021. The increase in R&D expense was primarily due to an increase in clinical trial spend, offset by a decrease in cost for manufacturing of active pharmaceutical ingredients and drug products for clinical trials. As we mentioned on the last call, we expect annual 2022 R&D spend to come in above 2021, levels, with the first quarter of 2022 as the outlier, and the third and fourth quarter more in line with what we saw in the second quarter of this year.

Jen Moses: Our selling, general, and administrative expenses for the second quarter of 2022 were $25.7, million, compared to $25.2 million for the second quarter of 2021. The increase in SG&A expenses quarter over quarter was largely due to an increase in, personnel costs related to headcount, offset by a decrease in medical affairs costs, commercialization activities, professional and legal fees, and IT-related costs.

Jen Moses: We continue to monitor our expenses in a disciplined manner. While we are investing in customer-facing commercial activities and prioritizing spend, that allows us to meet enrollment and data readout timelines for our trials, we are continuing to monitor other ancillary expenses.

Jack Bailey: As you'll hear from Andrew, we experienced good growth during the quarter, including, growing vial volume by almost 60% period over period.

Jen Moses: We have reduced or delayed spend in many areas while we allow time to grow our, product revenue line. Regarding our cash position, as described in the press release this morning, we ended the second quarter with cash and cash equivalents of $144 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 a future draw of an additional $25 million, on our debt facility with Hercules, which is currently available to us at our discretion.

Jack Bailey: Second, the team has executed the majority of our clinical programs extremely well during, a period of significant headwinds, including COVID-19 and the ongoing crisis in Ukraine, which impacted many clinical trials of different products.

This was our highest quarterly growth rate since the initial launch period and has almost tripled the growth rates. We saw in Q4 of last year and in Q1 of this year.

Compared to the same quarter in 2021, which was our first full quarter after launch and growth in bottle volume was 268%.

Each month in the second quarter.

Tony Butler: I wondered if you could make a statement about, if you could, about what those new sales initiatives, would be.

It is month over month growth in volumes.

The small cell lung cancer market cancel variability from month to month due to patient flow and pressure on staffing and health care organizations at different times of the year.

Similar to last year, our rate of growth in July did not reflect the pattern we saw in prior months.

However, we do anticipate continued quarter over quarter growth and we've taken the opportunity to initiate a number of sales and marketing initiatives designed to further improve our execution and restore stronger growth.

Tony Butler: And then two additional questions.

We saw 70% 77% of volume in the quarter comes through our community clinics and hospitals and 23% of volume come from academic centers.

98% of our volume in the quarter was in commercial supply with 2% coming through our patient assistance program.

And our Paramax remained broadly unchanged with 65% covered by Medicare <unk>, 97% covered by commercial and the remainder in Medicaid our government programs.

As I mentioned earlier, our goal is to not only deliver higher growth also to deliver a platform for future growth by broadening our base of utilization and driving depth in key accounts I am pleased to report that all four of our sales regions in the U S contributed to our national quarterly growth with regional growth rates during the quarter.

Ranging from 22% to 85%.

In fact, 13 of our 34 territories demonstrated growth of over 100% in the quarter.

We also wanted to expand our reach and uptake in the important top 100 organizations, which treats are around 50% of patients with extensive stage small cell lung cancer and we have added seven top 100 organizations since the end of Q1, giving us a total of 61.

<unk> hundred trials Casella.

Approximately 80% of those organizations have repeat orders during the second quarter.

The proportion of our Q2 business and top 100 organizations was 53% and our quarterly growth and those top 100 was 52%.

Moving to some measures of overall commercial execution.

Hello brand awareness remains high.

With over 90% of physicians, who are aware of Costello, intending to prescribe within 12 months and over 50% intending to prescribed within three months.

Message effectiveness for the majority of course, our key messages are all oncology brand industry averages.

Third party payer reimbursement has remained strong and we have had very few payer rejections to eight.

We've also seen an increase in opportunities for face to face engagement with customers with the majority of our calls in person and we were excited to have our commercial and medical teams, representing <unk> therapeutics and setup at major conferences, such as <unk> and ask for this quarter.

Overall, we're pleased with our progress in Q2, we delivered significantly stronger growth and build a broader base of business across the key customer organizations, which can continue to support growth going forward.

Our key lead measures of success also even more potential for <unk> future.

As a result, we remain ambitious for the potential of cost out with a benefit many more patients with extensive stage small cell lung cancer, and we're committed to ensuring their health care providers of the necessary information and resources to include Lasalle and the regiments.

Tony Butler: Raj, on the Preserve 2, while you're enrolling PD-L1 positive and negative patients, is there, a net number of PD-L1 versus, PD-L1 positive versus negative patients that are most desired from the 170?

I will turn the call over to Raj for a medical and clinical update.

Tony Butler: Because I just, even though you had seen some positive data in both cohorts, it's not exactly, equivalent.

Thanks, Andrew and good morning, everyone as Jack mentioned I can report that as of today, we expect to provide the initial results of our five ongoing clinical trials and the timelines we have previously disclosed.

Jen Moses: As Jack mentioned, we will receive a $13 million milestone payment in the third, quarter from Sincere as a result of their recent approval of Cosella in China. We also expect to receive double-digit royalties on annual net sales of Purcell in China.

Tony Butler: That could play into the futility next year.

Jen Moses: Although we may earn some royalties this year, for our internal modeling purposes, our assumptions, are that these royalties will begin in 2023.

Jen Moses: With that, I'll turn the call back over to Jack for some closing comments.

Tony Butler: And then, finally, when you mention you'll make comments about myelopreservation, for, example, in CRC in Q1, exactly what will you say about myelopreservation, or what can you say about myelopreservation, given the trials continuing?

Jack Bailey: Jack?

Tony Butler: Thank you very much.

As context for the studies.

Assessment of antitumor efficacy as the primary objective it is important to understand the phase II triple negative breast cancer data that were published in 2019 in lancet oncology as we think about the initial and final data that will be reported in the fourth quarter of this year and through 2023.

Jack Bailey: Thank you, Jen, Raj, Andrew, and Will.

Andrew Perry: Thanks, Tony.

Jack Bailey: And as always, I want to thank people living with cancer for your inspiration.

Jack Bailey: You drive us toward our goals each and every day.

As you may recall from the <unk> phase II data, we observed robust statistically significant improvements in the most clinically meaningful endpoint of overall survival in patients receiving <unk> compared to patients in the control group with hazard ratios of 0.31, and <unk> four and the two trial a cyclic.

Groups.

The effect on progression free survival was strong, but not as robust as overall survival and at least difference between the China cyclic arms and control wasn't response rate.

Our hypothesis or expecting to see a greater effect on us at all as compared to response rate is that the immune modulating mechanism of action of China cyclin could improve survival more so than response rate.

This is consistent with consistent with data from therapies that modulate the immune system, such as immune checkpoint inhibitors.

Specifically, we believe that the durability of effect may occur through increased formation of memories CDA positive T cells.

Which could improve long term immune surveillance.

Therefore for our phase II studies focused on assessing antitumor efficacy.

We expect to see a greater effect on shallow cycle upon progression free or overall survival and the least on response rate.

I remind you of our expected timeline for data over the coming 18 months, starting with our phase III pivotal trials and then moving on to our Phase III program.

Jack Bailey: Most importantly, we achieved the important milestone in the second quarter of completing, enrollment in our Phase III line extension trial of Trilocyclib in 326 participants with metastatic colorectal cancer.

Jack Bailey: Now, before we move to Q&A, let me just recap some of the points that you have heard today. The second quarter was our first full period during which Cocella was promoted solely by, our own team of G1 OSAMs following their deployment in mid-February. We ended the quarter with nearly 60% biovolume growth quarter over quarter. This was our highest quarterly growth rate since the initial launch period.

Andrew Perry: I'll take the first one.

First and foremost we recently achieved an important milestone as we completed enrollment in our 326 patient trial of <unk> in first line metastatic colorectal cancer called deserve one.

Jack Bailey: Third-party payer reimbursement has remained strong, and we have had very few payer rejections, to date.

Andrew Perry: Yeah, you know, obviously, in oncology, patient flow in the summer months can vary a little, bit. And it does appear to have been affected by some trends in patient flow, and perhaps healthcare, staff availability as well, for various reasons.

Andrew Perry: I did mention a couple of the initiatives that are underway. And so the first is just focusing on those high-growth opportunity accounts at the national, regional, and territory level, and creating some accountability around progress there.

Jack Bailey: During the quarter, we completed enrollment in our Phase III Registrational Trial in colorectal, cancer and, more recently, completed enrollment in our Phase II Mechanism of Action Trial and hit our enrollment target in our Phase II Bladder Cancer Study.

Andrew Perry: We're also developing an early warning system, which will highlight accounts to us when they, drop in utilization, because quite often, that's not because of a lack of confidence or excitement of the product. It's often just due to a process issue, which we can actually intercept much earlier if, we flag it earlier.

Andrew Perry: We're also following through more effectively, where we see a patient come on board to make, sure the providers have all the information they need about how to use the product appropriately.

Andrew Perry: We've shifted some digital advertising to focus on our key accounts, and we have some, new marketing materials and resources coming out in Q3 as well, to keep our messages front of mind. So we've taken the opportunity to sharpen execution across a number of elements of our, commercial model.

Andrew Perry: Thank you.

Full Fox theory is the most effective and also the most myelotoxic regimen for metastatic colorectal cancer.

Rajesh Malik: Hey, Tony.

Improving model of toxicity could result in a greater exposure to chemotherapy and potentially offset improved antitumor efficacy.

Jack Bailey: We expect the initial results, including those from the primary endpoint, in the first quarter, of 2023. And as you read in this morning's press release, we recently also hit key enrollment milestones, in both our Phase II bladders and our Phase II trial assessing the mechanism of action for Trilocyclib.

Jack Bailey: And finally, as Raj described, we expect to provide initial results from our two ongoing, pivotal trials in CRC and triple-negative breast cancer next year, starting with the CRC data in the first quarter of 2023 and data from our three Phase II trials later, this year, the Bladder Study, the MOA Study, and the ADC Combination Studies.

We expect to release initial results from this trial, including those from the primary endpoint of model protection and from the secondary endpoint of overall response rate in the first quarter of 2023.

Jack Bailey: Now, regarding Cocella guidance, as we have previously communicated, we intend to provide, formal guidance as soon as we have enough data on performance and impact of our G1 sales team to do so. However, given the month-over-month tempering of sales in July, we need a better understanding, of these market dynamics before we can do so.

Jack Bailey: As such, as of today, we remain comfortable with analyst consensus for CocellaNet sales, in 2022, currently sitting just under $40 million.

Jack Bailey: With a strong quarter of sales under our belts and a data-rich period through the end, of 2023 ahead of us, I could not be more excited about where we are heading and the potential for Trilocyclin to impact the lives of many patients living with various cancers.

The secondary survival endpoints of PFS and OS will come later.

The amount of protection data are positive we will meet with the regulatory authorities to discuss filing for approval in this indication.

Second regarding presents to our first <unk> pivotal trial.

Approximately 170 patients with PD lone positive and negative tumors.

We expect the interim overall survival analysis to be conducted by our data monitoring committee in the second half of next year.

As a child leads the interim analysis stopping rule it will terminate and we will report the topline results.

If it does not the trial will continue to the final analysis.

Jack Bailey: Further, as you will hear from Raj, we expect to provide the initial results from each of, our five ongoing Phase II and Phase III clinical trials over the coming 18 months, starting in the fourth quarter of this year.

Next regarding our phase II trials.

Currently expect initial data from the following three in the fourth quarter of this year.

Starting with preserved III, our study of <unk> with chemotherapy and immune checkpoint inhibitor value map and patients with bladder cancer, receiving first line treatment.

As Jack mentioned, we announced this morning that we have achieved our target around enrollment in this approximately 90 patient trial.

The last few patients who have consented to enroll should do so shortly so we should achieve last patient in the upcoming days.

As such we can confirm that we expect to provide initial top line response rate and model protection data in the fourth quarter of this year.

Followed by data on the primary endpoint of PFS in 2023.

Second we've also completed enrollment in our 24 patient trial.

Aurify the mechanism of action of China, Cyclin participants with Neo adjuvant triple negative breast cancer.

We expect to provide initial immune endpoint results from this trial, including <unk> impact on CDA positive T cells, and regulatory T cells or T. Rex in the tumor microenvironment in the fourth quarter of this year.

With pathological complete response and other immune profiling data in 2023.

Jack Bailey: Third, from a corporate perspective, we were recently very pleased to share that the China, National Medical Products Administration had conditionally approved the marketing authorization for Cocella, which was jointly developed for use in greater China in partnership with Sincere.

And third we expect to present preliminary safety data from our phase two trial in triple negative breast cancer designed to evaluate the additive combination potential of trial cyclists, but the antibody drug conjugate <unk>.

The treatment landscape has continued to change in the U S with greater usage of parallelism app in the neo adjuvant and adjuvant setting, resulting in slower progression of disease.

Which is great news for patients.

As a result, the time until the patient could become eligible for our trial has pushed out.

Which appears to be one of the factors that has contributed to slower enrollment.

We are in the process of mitigating this in a variety of ways, including adding additional sites.

As a result, we will have preliminary safety data late this year from as many patients as possible.

And the bulk of the data, including efficacy next year.

It's worth noting that this landscape evolution as a U S effect only we are not seeing these enrollment hurdles in the global pivotal <unk> trial.

Finally, there are significant strategic importance to expediting the evaluation of the combination of Charles <unk> with a checkpoint inhibitor and chemotherapy in first line non small cell lung cancer.

As such rather than supporting an investigator initiated study we are exploring other means of evaluation such as sponsoring it ourselves or with a partner.

We will provide an update on this as soon as possible and also keep you abreast of our ongoing ISS program as those trials initiated.

With that I'll turn the call over to Jan for a review of the financial results for the second quarter of 2022.

Jack Bailey: Thank you for your time this morning.

Rajesh Malik: This is Raj.

Jack Bailey: We will speak again in this format in November on the third quarter 2022 call.

Rajesh Malik: So, initially, for the first, for PRESERVE-2, you're right, we're enrolling all comers, so PD-L1 positive and negative.

Rajesh Malik: If you look at the data, approximately 40% of patients have PD-L1 positive tumors.

Rajesh Malik: We are stratifying by PD-L1 status, so, you know, we anticipate that the approximate distribution, of PD-L1 in this tumor population is what will be represented in the trial, so in that, 40-50%.

Thanks, Raj and good morning, everyone as will mentioned all financial results for the second quarter of 2020 are available in this morning's press release and will be in the 10-Q, which we intend to file today after market close.

Rajesh Malik: And because we're stratifying, we think it's going to be a, you know, it's the appropriate, way to evaluate the effect in both.

Rajesh Malik: And even in the PD-L1 negative, if you recall, the hazard ratio was still less than 0.5, so there was definitely a meaningful effect there.

Rajesh Malik: And then to PRESERVE-1, the data that we'll be analyzing and reporting will be the primary, and key secondary endpoint data, so duration of severe neutropenia, severe neutropenia and patient-reported outcomes.

Rajesh Malik: We will be blinded to any event-driven outcomes, so the trial will continue for those PFS and, OS readouts. But we will be able to report the myeloprotection data as well as the response rate data.

Rajesh Malik: Very helpful.

Rajesh Malik: Thanks so much.

Our total revenue for the second quarter of 2020 to $10 6 million comprised of net Costello revenue of $8 7 million and license revenue of $1 9 million compared to $6 6 million of total revenue for the same purion H 'twenty one.

Rajesh Malik: Sure.

Cost of goods sold for the three months ended June 32022 was 1 million compared to <unk> 8 million for the same period in 2021.

As a reminder, a portion of the manufacturing costs related to the telesales or incurred prior to FDA approval and therefore were recorded as R&D expense in prior periods.

The majority of prelaunch inventory has been depleted in the treatment of these costs will now have a nominal impact on cost of goods sold going for Martin.

Our research and development expenses for the second quarter of 2022, or $20 8 million compared to $18 8 million for the second quarter of 2021.

The increase in R&D expense was primarily due to an increase in clinical trial spend offset by a decrease in cost for manufacturing of active pharmaceutical ingredient and drive product for clinical trials.

As we mentioned on the last call. We expect annual 2022, R&D spend to come in above 2021 level with the first quarter of 2022 is the outlier in the third and fourth quarter more in line with what we saw in the second quarter of this year.

Our selling general and administrative expenses for the second quarter of 2022, or $25 7 million compared to $25 2 million for the second quarter of 2021, the increase in SG&A expenses quarter over quarter was largely due to an increase in personnel costs related to head count.

By a decrease in medical affairs costs commercialization activities for <unk>.

On legal fees and related costs.

We continue to monitor our expenses in a disciplined manner, while we are investing in customer facing commercial activities and prioritizing spend that allows us to meet enrollment and data readout timelines for our trial. We are continuing to monitor other ancillary expenses, we have reduced or delayed spend in many areas. While we allow time to grow.

Tony Butler: Thank you, Tony.

Product revenue line.

Regarding our cash position as described in the press release. This morning, we ended the second quarter with cash and cash equivalents of $144 million compared to $221 2 million as of December 31, 2021, we.

Operator: Your next question is from Ed White of HC Wainwright.

Ed White: Please ask your question.

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.

Ed White: Good morning.

Jack Bailey: As a result, G1 will receive a $13 million milestone payment from Sincere, part of a, total milestone consideration of up to $156 million.

Ed White: Thanks for taking my questions.

As Jack mentioned, we will receive a $13 million milestone payment in the third quarter from <unk> as a result of their recent approval of <unk> in China.

We also expect to receive double digit royalties on annual net sales of Crystal in China.

Although we may earn some royalties this year for <unk>.

<unk> modeling purposes, our assumptions are that these royalties will begin in 2023.

With that I will turn the call back over to Jack for some closing comments Jack.

Thank you Jen Raj, Andrew and we'll as always I want to thank people living with cancer for your inspiration.

Drive us toward our goals each and every day.

Now before we move to Q&A, let me just recap some of the points that you have heard today.

Jack Bailey: We also expect to receive double-digit royalties on future annual net sales of Cocella in China, which Jen will describe later in the call.

Ed White: I'm just curious if you have any data on potential off-label use of Cocella.

The second quarter was our first full period during which <unk> was promoted solely by our own team of G. One O Sam's following their deployment in mid February .

Jack Bailey: This morning, I will first ask Andrew to cover our recent commercial progress, including, an update on our efforts of our news field sales team during the second quarter of 2022.

Andrew Perry: Yeah, thanks, Ed.

Andrew Perry: You know, we get information that has quite a significant lag on it because it has to, come through claim sources, so I don't have a lot of information that pertains to the second quarter.

Andrew Perry: But I would estimate it's single-digit percentages of off-label use.

We ended the quarter with nearly 60% oil volume growth quarter over quarter. This was our highest quarterly growth rate since the initial launch period.

Ed White: Okay, thanks.

Third party payer reimbursement has remained strong and we have had very few payer rejections to date.

During the quarter, we completed enrollment in our phase III Registrational trial in colorectal cancer and more recently completed enrollment in our phase two mechanism of action trial and hit our enrollment target in our phase III bladder cancer study.

Jack Bailey: Raj will then provide a snapshot of our clinical momentum, including timelines and data expectations.

And finally as Raj described we expect to provide initial results from our two ongoing pivotal trials in CRC and triple negative breast cancer next year, starting with the CRC David in the first quarter of 2023.

Data from our three phase III trials later this year the bladder study the <unk> study and the ADC combination studies.

Jack Bailey: Finally, Jen will provide the financial results for the quarter, including an update on financial, ramifications of the Sincere approval and a reminder that our cash runway takes us into 2024.

Ed White: And then, Andrew, you had mentioned earlier that the majority of – you now see a majority, of live versus virtual sales calls.

Ah regarding kastelic guidance as we have previously communicated we intend to provide formal guidance as soon as we have enough data on performance and impact of our <unk> sales team to do so however, given the month to month over month tempering of sales in July we need a better understanding of these market dynamics before we can do so.

Jack Bailey: Then I'll be back for some concluding comments.

Ed White: Maybe you could just review with us the importance of that and do you expect this to continue, going forward?

Jack Bailey: With that, I'll turn the call over to Andrew.

Andrew Perry: Yeah, thanks.

Andrew Perry: I do anticipate it will continue going forward, actually.

Andrew Perry: And the big advantage, I think – and, you know, maybe I'm a little old school in this, but when an oncology salesperson who is competent and capable and is engaged with the product goes into an office, they're not only calling on a prescriber. They're calling on the nursing staff.

Andrew Perry: They're calling on whoever channels reimbursement.

Andrew Perry: They're calling on the front office staff.

Andrew Perry: And they've built – they're calling on pharmacy.

Andrew Perry: And they build up a whole picture of activities across the account, which can vastly accelerate, adoption of a product.

As such as of today, we remain comfortable with analyst consensus for <unk> net sales in 2022 currently sitting just under $40 million.

With a strong quarter of sales under our belts and a data rich period through the end of 2023 ahead of us I could not be more excited about where we are heading and the potential for <unk> to impact the lives of many patients living with various cancers.

Thank you for your time. This morning, we will speak again in this format in November on the third quarter 2022 call. However, you will hear from its next at our upcoming virtual R&D day on September 15th.

Andrew Perry: Thank you, Jack.

Jack Bailey: However, you will hear from us next at our upcoming virtual R&D day on September 15th. We expect to discuss a variety of topics, including a more robust discussion on the, Trilocyclin mechanism of action, readouts from our preclinical work assessing the potential synergies with other anti-cancer drugs, updates on our clinical program and data expectations, and the future potential of Trilocyclin, all ahead of the key readouts from our clinical trials.

We expect to discuss a variety of topics, including a more robust discussion on the trailer cycle of mechanism of action Readouts from our preclinical work assessing the potential synergies with other anti cancer drugs.

Based on our clinical program and data expectations and the future potential of travelers cyclical all ahead of the key readouts from our clinical trials. So please keep an eye out for invitations and dialing instructions over the coming weeks with that I will close the call and turn it over to Q&A. Operator would you. Please remind our listeners how to ask a question.

Jack Bailey: So please keep an eye out for invitations and dial-in instructions over the coming weeks.

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 star 11 on your telephone.

As a reminder to ask a question you will need to press star one one on your telephone please standby will be compile the Q&A roster.

Operator: Please stand by while we compile the Q&A roster.

Yes.

Your first question comes from the line of <unk> of Needham <unk> Company. Your line is open.

Andrew Perry: I'm glad to be with you today to provide an update on a number of commercial topics, including second quarter sales performance and leading indicators of growth.

Operator: Your first question comes from the line of Gil Blum of Needham & Company.

Andrew Perry: You know, the idea of just getting to a prescriber is, you know, a very one-dimensional view, of what it takes to sell any specialty product, never mind an oncology product.

All right good morning, everyone. Congrats on the progress.

So we kind of discussed a few potential items on the commercial side that show signs of improvement.

Andrew Perry: The second quarter was our first complete period during which Cocella was promoted solely, by our own team of G1 Oncology Sales Account Managers, or OSAMs, following their full deployment in mid-February and the termination of our co-promotion agreement with Boringer Ingelheim in early March.

Gil Blum: Your line is open.

Andrew Perry: And there's no substitute, to my mind, for getting into the office and having that total, call.

I'm just curious is that what is the company's view on the.

The most important factor and deriving.

Future growth.

Is it adding more top 100 facilities is that improving penetration in those fatalities. Whichever you think is the most important.

Andrew Perry: Our goal in the second quarter was to demonstrate significant volume growth with a focus on, the top 100 organizations who see around 50% of patients with extensive stage small cell lung cancer.

Gil Blum: Good morning, everyone.

Andrew Perry: Thanks, Andrew.

Andrew Perry: We also wanted to build a platform for future growth by demonstrating both breadth and depth, of utilization across the U.S., beginning with sales activity. We ended the quarter with $8.7 million in net sales of Cocella, representing nearly, 60% file volume growth quarter over quarter. This was our highest quarterly growth rate since the initial launch period and has almost, tripled the growth rates we saw in Q4 of last year and in Q1 of this year.

Ed White: And perhaps my last question for you is just, you know, you mentioned a, lot of positives going on during the launch.

Ed White: I'm wondering what sales headwinds that you're seeing and what potential solutions that you have to those headwinds.

Ed White: Thank you.

Andrew Perry: Yeah, thanks.

Andrew Perry: You know, I don't think they've really changed too much.

Hey, Bill happy to take that.

Yes, I mean, I think you nailed it but we've obviously got to a significant portion of those top 100 right now those those 60 organizations that we have seen an order from and of course, we've seen an 80% at <unk>.

The rate from those organizations, which we're really happy about but the overall depth of penetration has just a ton of potential there I mean, clearly there is a lot of runway even within the 60 organizations that have already ordered the product to actually see increased uptake.

Very often with these types of organizations.

A PDF, where they initially use the product they take a look at the results, but it might not be on all of their pathways are and all of their systems and those opinions about optimizing the placement of the product and then communicating how to use the product across all of the satellite locations and Thats. The process that we're in the middle of right now we've actually seen in Q2 some amazing.

Andrew Perry: However, we do anticipate continued quarter-over-quarter growth, and we've taken the opportunity to, initiate a number of sales and marketing initiatives designed to further improve our execution and restore stronger growth.

Andrew Perry: I think it's converting, the awareness of the product and the willingness to prescribe into identifying a patient.

Andrew Perry: We saw 77% of volume in the quarter come through community clinics and hospitals, and 23% of, volume come from academic centers.

Andrew Perry: And we've been really pleased, actually, to see some real-world data recently presented at NCCN where it really showed the burden of myelosuppression, which is much more profound, I think, maybe than any of us had thought.

Success, and some organizations through doing that process and so that's what our team is really focused on in Q3 and Q4.

Andrew Perry: Ninety-eight percent of our volume in the quarter was in commercial supply, with 2% coming through our patient assistance program.

Andrew Perry: And we're starting to evaluate how we can get that into promotion because that creates a conversation about how we can do better together with the healthcare provider.

Andrew Perry: And our pair mix remained broadly unchanged, with 65% covered by Medicare, 27% covered, by commercial, and the remainder in Medicaid or government programs.

Andrew Perry: And then the next part is really just shifting that kind of 20 years of habit of waiting for a problem to happen versus dealing with it proactively and getting the benefits of multilineage myeloprotection, which only Coacella can offer.

Andrew Perry: In the second quarter of the year, we saw a significant increase in lung cancer in the, first quarter of the year.

Andrew Perry: And then finally, there's the process component, which is, you know, many of these institutions, organizations, networks are deeply embedded with an EMR system or an IT system.

Andrew Perry: And they, you know, providers rely on that now for quality of care and for efficiency of care.

Okay. Thank you.

Andrew Perry: And so working out the optimal placement for Coacella in those systems, even when you have formula review, even when you have P&T review, even when you have enthusiastic physician support, you still need to make sure you're in those systems.

And considering that several of your.

Clinical studies have completed their enrollment.

We expect this alignment.

R&D operation expenses.

Moving forward or.

Just kind of remaining flat.

Andrew Perry: However, we do anticipate continued quarter-over-quarter growth, and we've taken the opportunity to, initiate a number of sales and marketing initiatives designed to further improve our execution and restore stronger growth.

Andrew Perry: And that takes a little bit of navigation behind the scenes.

Andrew Perry: In the second quarter of the year, we saw a significant increase in lung cancer in the, first quarter of the year.

Andrew Perry: As I mentioned earlier, our goal was to not only deliver higher growth, but also to deliver, a platform for future growth by broadening our base of utilization and driving depth in key accounts.

Your line is expected to remain what we have.

Andrew Perry: I'm pleased to report that all four of our sales regions in the U.S. contributed to our, national quarterly growth, with regional growth rates during the quarter ranging from 22% to 85%.

Andrew Perry: In fact, 13 of our 34 territories demonstrated growth of over 100% in the quarter.

Andrew Perry: We also wanted to expand our reach and uptake in the important top 100 organizations, which, treat around 50% of patients with extensive-stage small cell lung cancer, and we have added seven top 100 organizations since the end of Q1, giving us a total of 60 of the top, 100 which have trialed Coacela. Approximately 80% of those organizations had repeat orders during the second quarter.

The studies are enrolled but we are.

We will have data processing will have just a number of things to closeout studies that they'll continue to be I would estimate them to be around where they were for the second quarter.

And continue that going forward.

Andrew Perry: Great.

Okay. That's fine. Thank you for taking my question.

Ed White: Thanks, Andrew.

Thank you Joe.

Andrew Perry: The proportion of our Q2 business and top 100 organizations was 53%, and our quarterly, growth in those top 100 was 52%.

Ed White: Thank you, Ed.

Andrew Perry: Moving to some measures of overall commercial execution, Coacela brand awareness remains, high at around 80%, with over 90% of physicians who are aware of Coacela intending to prescribe within 12 months, and over 50% intending to prescribe within three months.

Your next question comes from the line of <unk> Pullman of BD AIG. Your line is open.

Operator: Your next question is from David Mearingartin of Wedbush Securities.

Yeah. Good morning, Thanks for taking my questions.

So Ricky NBC.

James Friedman landscape impacted enrollment in the first line.

Phase III trial.

Yes. Thanks for the question <unk> This is Jack.

It's not changed enrollment timeline on the first line phase III first line TBC. That's a global studies. So we've got an enormous number of sites outside of the U S. The ADC combination study is solely a U S based study and since contributors approval at the end of 2020.

For 2021, I guess it was.

That is really it's only impacting the U S sites in terms of a bit more watching wave in these patients taking longer to get to.

A time, where they would be eligible for our study so no on the first line phase III study no impact.

Got it Thats helpful.

Flora CNBC.

Do you expect Q E.

<unk> exited the use of keytruda in the knee.

Are you an adjuvant setting to impact.

Glib efficacy in the first line setting.

In patients, who previously received and progress on this immunotherapy.

So Gary this is Raj I can take that one.

We do not.

Based on the mechanism of action of <unk>.

And its impact on various aspects of that cancer immunity cycle.

We think that there is a potential that we could work even in patients who have previously received an immune checkpoint inhibitor.

Gil Blum: Congrats on the progress.

Great. Thanks, Ben.

Gil Blum: So, we kind of discussed a few potential items on the commercial side that show signs of improvement.

And the progress.

Thank you.

Sure.

Next question is from Tony Butler of Roth Capital. Your line is open.

David Mearingartin: Your line is open.

Andrew Perry: Message effectiveness for the majority of Coacela key messages is at or above oncology, brand industry averages.

Gil Blum: I'm just curious as to what is the company's view on the most important factor in driving future growth?

David Mearingartin: Hey, thanks for taking the questions and congrats on all the progress here, especially on the, clinical side.

Andrew Perry: Third-party payer reimbursement has remained strong, and we have had very few payer rejections, to date.

Gil Blum: Is it adding more top 100 facilities?

David Mearingartin: Impressive.

Yes, good morning.

Okay.

Andrew you made a comment about July and then you made.

Gil Blum: Is it improving penetration in those facilities?

David Mearingartin: A couple of questions on the clinical side.

Statement about some sales initiatives Tonight and I didn't.

Might get what those sales initiatives might be the one.

Gil Blum: Whichever you think is the most important.

If you could make a statement about that.

If you could about what those new sales initiatives would be and then two additional.

David Mearingartin: For the ADC combination study and the bladder cancer study, I know the primary endpoint is PFS, but, you know, thinking about myelopreservation in those settings, are there, you know, anything we should know?

Questions Raj on the.

Preserved to well Youre enrolling PDL, one positive and negative patients is there a net number.

Of PD one versus PDL.

PD lone positive versus negative patients that are most desired from the 170, because even though you had seen some positive data in both cohorts not exactly equivalent that could play into this utility next year and then finally.

You mentioned Youll make comments about Milo preservation for example in CRC.

In Q1, exactly what what you say about myeloma, what can you say about bio preservation given the trial's continuing thank you very much.

David Mearingartin: Are there nuances to how, you know, that'll come out?

Andrew Perry: We've also seen an increase in opportunities for face-to-face engagement with customers, with the majority of our calls now in-person, and we were excited to have our commercial and medical teams representing G1 Therapeutics and Coacela at major conferences such as ONS and ASCO this quarter.

Gil Blum: Yeah.

Andrew Perry: Hey, Gil.

David Mearingartin: Or is it going to be a straight read on, you know, neutropenia rates or things like that?

Okay.

Thanks, Tony I will take the first one yes.

Obviously, an oncology patient pool in the summer months.

Andrew Perry: Happy to take that.

Andrew Perry: Yeah, I mean, I think you nailed it, but we've obviously got to a significant portion of those top 100 right now.

David Mearingartin: And maybe another way to ask the question is, you know, is there a significant background, you know, myelosuppression in those patients?

A little bit.

Andrew Perry: Those 60 organizations that we have now seen an order from, and of course, we've seen an 80% reorder rate from those organizations, which we're really happy about.

Those appear to have been affected by some trends in patient flow and perhaps health care staff availability as well for various reasons.

Hi.

I did mention a couple of the initiatives that are underway and so the first thing is just focusing on those high growth opportunity accounts at the national regional and territory level and creating some accountability around progress. There. We're also developing an early warning system, which will highlight to us when they drop in utilization because quite often.

Andrew Perry: Overall, we're pleased with our progress in Q2. We delivered significantly stronger growth and built a broader base of business across, the key customer organizations, which can continue to support growth going forward.

Andrew Perry: And that's the process that we're in the middle of right now.

Andrew Perry: Our key lead measures of success all show even more potential for Coacela in the future.

Andrew Perry: As a result, we remain ambitious for the potential of Cocella to benefit many more patients with, expansive stage 4 cell lung cancer, and we're committed to ensuring their healthcare providers have the necessary information and resources to include Cocella in their regimens.

Not because of a lack of confidence our excitement of the product. It's often just due to a process issue, which we can actually enter set much earlier, if we flagged earlier.

We're also following through more effectively where we see a patient come on board to make sure that providers have all the information they need about how to use the product appropriately.

Andrew Perry: We've actually seen in Q2 some amazing success in some organizations through doing that process.

Digital advertising to focus on our key accounts and we have some new marketing materials and resources coming out in Q3 as well to keep our message is front of mind. So we've taken the opportunity to sharpen execution across a number of elements of our commercial model.

Andrew Perry: And so that's what our team is really focused on in Q3 and Q4.

Gil Blum: Okay, thank you.

David Mearingartin: And is it currently, you know, generally treated with, you know, Neulaster or the other agents out there?

Andrew Perry: With that, I'll turn the call over to Rajesh for a medical and clinical update.

Rajesh Malik: Rajesh.

Gil Blum: And considering that several of your clinical studies have completed their enrollment, should we expect a slowing in R&D operation expenses moving forward or just kind of remaining flat?

David Mearingartin: Just, you know, trying to get a feel for what we could expect for, you know, kind of background rates and effects of Charlotte-Cyclovane myelopreservation there.

Thank you.

Hey, Tony This is Raj. So so initially for the first of a preserved too.

David Mearingartin: Thanks.

You are right we are enrolling all comers, so PD lone positive and negative if you look at.

Jack Bailey: I would expect it to remain flat.

Rajesh Malik: Yeah, hey David, this is Raj.

The data approximately 40% of patients have PD lone positive tumors.

Stratify by PDL one status so we.

We anticipate that the approximate distribution of PDL, one and this tumor population is what will be represented in the trials. So in that 40% to 50% and because of a satisfying we think it's going to be yet.

Rajesh Malik: Thanks, Andrew, and good morning, everyone.

It said this the appropriate way to evaluate the effect in bulk and even in the PDL one negative if you recall the hazard ratio was still less than five so there was definitely a meaningful effect there.

Rajesh Malik: As Jack mentioned, I can report that as of today, we expect to provide the initial results, from our five ongoing clinical trials in the timelines we have previously disclosed.

Jack Bailey: We have – the studies are enrolled, but we will have data processing.

Rajesh Malik: Yeah, so we will be looking at, you know, the outcomes of myelosuppression, so neutropenia, anemia, thrombocytopenia.

Rajesh Malik: As context for the studies, where assessment of antitumor efficacy is the primary objective, it is important to understand the phase 2 triple negative breast cancer data that were published in 2019 in Lancet Oncology as we think about the initial and final data that will be reported in the fourth quarter of this year and through 2023.

Jack Bailey: We'll have just a number of things to close out studies.

And then to preserve one.

The data that we'll be analyzing our reporting will be.

Rajesh Malik: As you may recall from the TMBC phase 2 data, we observed robust, statistically significant, improvements in the most clinically meaningful endpoint of overall survival in patients receiving trialocyclic compared to patients in the control group, with hazard ratios of 0.31 and 0.4 in the two trialocyclic groups.

Rajesh Malik: Starting with Tredelzi, that it does have actually quite significant rates of neutropenia. So we feel there's an opportunity there to show, you know, potential improvement, which could translate to better tolerability of the combination.

The primary.

Rajesh Malik: The effect on progression-free survival was strong, but not as robust as overall survival, and the least difference between the trialocyclic arms and control was in response rate. Our hypothesis for expecting to see a greater effect on EFS and OS compared to response, rate is that the immune-modulating mechanism of action of trialocyclic could improve survival more so than response rate. This is consistent with data from therapies that modulate the immune system, such as immune, checkpoint inhibitors. Specifically, we believe that the durability of effect may occur through increased formation, of memory CD8 positive T cells, which could improve long-term immune surveillance.

And key secondary end point data, so duration of severe neutropenia, if union pena and patient reported outcomes.

Rajesh Malik: Therefore, for our phase 2 studies focused on assessing antitumor efficacy, we expect, to see a greater effect of trialocyclic on progression-free or overall survival and the least on response rate.

Rajesh Malik: I remind you of our expected timeline for data over the coming 18 months, starting with, our phase 3 pivotal trials and then moving on to our phase 2 program. First and foremost, we recently achieved an important milestone as we completed enrollment, in our 326-patient trial of trialocyclic and first-line metastatic colorectal cancer called, PRESERVE-1.

Rajesh Malik: You know, one of the things that this was actually reported at ASCO this year, that efficacy of Tredelzi was associated with a greater AUC, and they did an exposure response analysis, looking at a POP-PK model.

Rajesh Malik: Fulfoxiri is the most effective and also the most myelotoxic regimen for metastatic colorectal, cancer. Improving myelotoxicity could result in a greater exposure to chemotherapy and potentially, also improve antitumor efficacy.

Rajesh Malik: We expect to release initial results from this trial, including those from the primary, endpoint of myeloprotection and from the secondary endpoint of overall response rate in the first quarter of 2023. The secondary survival endpoints of PFS and OS will come later.

We will be blinded to any event driven outcomes. So the trial will continue.

For those PFS and OS Readouts, so we will be able to report.

Rajesh Malik: If the myeloprotection data are positive, we will meet with regulatory authorities to, discuss filing for approval in this indication.

Rajesh Malik: Second, regarding PRESERV-2, our first-line TMBC pivotal trial in approximately 170 patients, with PD-L1 positive and negative tumors, we expect the interim overall survival analysis to be conducted by a data monitoring committee in the second half of next year. If the trial meets the interim analysis stopping rule, it will terminate, and we will report, the top-line results.

The bottle protection data as well as the response rate data.

Very helpful. Thanks.

Rajesh Malik: If it does not, the trial will continue to the final analysis.

Sure Andrew.

Rajesh Malik: Next, regarding our Phase II trials, we currently expect initial data from the following three, in the fourth quarter of this year. Starting with PRESERV-3, our study of trial-assisted live-with chemotherapy and the immune checkpoint, inhibitor, Avalumab, in patients with bladder cancer receiving first-line treatment.

Tony.

Your next.

Question is from Ed White of H C. Wainwright. Please ask your question.

Rajesh Malik: As Jack mentioned, we announced this morning that we have achieved our target enrollment, in this approximately 90-patient trial. The last few patients who have consented to enroll should do so shortly, so we should, achieve last patient in in the upcoming days. As such, we can confirm that we expect to provide initial top-line response rate and, model protection data in the fourth quarter of this year, followed by data on the primary endpoint of PFS in 2023.

Good morning, Thanks for taking my questions.

I'm just curious if you have any.

Data on potential off label use of course seller.

Yes, Thanks Ed.

We get information that has quite a significant lag on it because it has to come through claims sources. So I don't.

Jack Bailey: So they'll continue to be – I would estimate them to be around where they were for the second quarter and continue that going forward.

A lot of information that pertains to the second quarter, but I would estimate at single digit percentages.

Off label use.

Okay. Thanks, and then Andrew you had mentioned earlier that the majority of.

You would not see a majority of fly versus virtual sales calls.

Sure.

Maybe you could just review with us the importance of that and do you expect this to continue.

Going forward.

Yeah, Thanks, Hi, David I do anticipate that we'll go we'll continue going forward actually in the big advantage I think and maybe I'm, a little old school, but when an oncology sales person who is competent and capable.

<unk> is engaged with the product goes into an office there not only calling on a prescriber or a calling on the nursing staff are calling on all of our channels reimbursement or calling on the front office staff and the belt, the calling of pharmacy and the buildup of whole picture of activities across the account, which can vastly accelerate adoption of our product.

The idea of just getting to our prescriber is abating.

If any one dimensional view of what it takes to sell any specialty product never mind that oncology product and there is no substitute to my mind progressing into the office and having that total call.

Thanks, Andrew.

My last question for you discussed.

And a lot of positives going on during the launch.

Wondering what sales headwinds that youre seeing and what potential solutions that you have to those headwinds. Thank you.

Yes I.

I don't think they really change too much I think it's converting the awareness of the product and the willingness to prescribe and to identifying a patient.

We've been really pleased actually to see some real world data recently presented at <unk>.

CCN.

Where it really showed the burden of myeloid suppression, which is much more profound I think maybe than any of us had thought and we're starting to evaluate how we can get that entered promotion because that creates a conversation about how do we can do better together with the health care provider and then the.

The next part is really just shifting that kind of 20 years of habit of waiting for a problem to happen versus dealing with them proactively and getting the benefits of multi lineage Milo protection, which only <unk> can offer.

And then finally, there was a process component which is <unk>.

Many of these institutions organizations networks are deeply.

Embedded within EMR system or <unk> system.

Providers rely on not known for quality of care for efficiency of care and so working out the optimal placement for Castilla in those systems.

Even when you have formulary review, even when you have PNC reviewed even when you have enthusiastic physicians or you still need to make sure. We run those systems and that takes a little bit of navigation behind the scene.

Great. Thanks, Andrew.

Thank you Ed.

Gil Blum: Okay, excellent.

Your next question is from David Meara, and Garden of Wedbush Securities. Your line is open.

Gil Blum: Thank you for taking my question.

Hey, Thanks for taking my questions and congrats on all the progress here, especially on the clinical side impressive cut.

Gil Blum: Thank you, Gil.

Question on the clinical side.

For.

Operator: Your next question comes from the line of Kari Polman of BPIG.

The ADC combination study in the bladder cancer study I know the primary endpoint is PFS, but.

Yes, thinking about myeloid preservation in those settings.

Sure.

Anything we should know there are nuances to how that'll come out or is it going to be a straight read on neutropenia rates or things like that and maybe another way to ask the question is.

Is there a significant background.

<unk> suppression in those patients currently generally treated with.

Neulasta or the other agents out there.

Yes, I'm trying to get a feel for what we could expect for kind of background rates and effects of cycling on lateral preservation there. Thanks.

Kari Polman: Your line is open.

Yes, Hey, David This is Raj.

Yes, so we will be looking at.

The myeloid.

The outcomes of model suppression, so neutropenia anemia thrombocytopenia.

<unk> with <unk>.

<unk> that does have a quite significant rates of neutropenia.

So we feel that there is an opportunity to actually show.

Potential improvement, which could translate to better tolerability of the combination one of the things that.

This is actually reported at <unk> this year.

That efficacy of <unk> was associated with a greater AUC and they did an exposure response analysis.

Looking at our PK model.

Rajesh Malik: And so maintaining dose intensity could be important for Tredelzi.

So maintaining dose intensity could be important foot fidelity.

Rajesh Malik: So that is something that we'll be looking at in that study.

That is something that we will be looking at.

In that study.

The bladder.

The chemo regimens as you know is gem platinum. So this includes both CIS and carbo and it's given in a day one regimen schedule I should say, which is similar to our <unk> study.

Rajesh Malik: On the bladder, the chemoregimen, as you know, is gemplatinum. So this includes both cis and carbo, and it's given in a day 1-8 regimen schedule, I should say, which is similar to our TMBC study.

Rajesh Malik: And it's going to be the same readouts that we'll be looking at.

Rajesh Malik: You know, model suppression does occur with those combinations as well.

It's going to be the same readout, so we'll be looking at.

Modest fashion does occur.

With with those combinations as well.

David Mearingartin: And just to double check, it's a secondary endpoint that you'll be able to report a statistical, benefit?

And just to double check.

Secondary endpoint, but youll be able to.

Frankfurt and.

Rajesh Malik: Yes.

Statistics.

Benefit yes.

David Mearingartin: Thank you.

David Mearingartin: Yeah.

Okay.

David Mearingartin: Sorry, David.

Thank you Doug.

Rajesh Malik: Just to clarify, it is a secondary objective, and there's no alpha sign, so it will be, descriptive, but it'll be important additional data as we evaluate model protection across different regiments.

Doug.

Sorry, David just to clarify it as a secondary objective and there is no alpha science that will be descriptive, but it'll be important additional data as we evaluate model protection across different regimens.

Rajesh Malik: Thank you.

David Mearingartin: Thanks, David.

Thank you.

Operator: Once again, to ask a question, you may press star 11 on your telephone.

Okay.

Thanks, Steve.

Once again to ask a question you May press star one on your telephone.

Operator: Your next question is from Anupam Rama of J.P. Morgan.

Your next question is from <unk> Rama of Jpmorgan. Your line is open.

Anupam Rama: Your line is open.

Anupam Rama: Hey, guys.

Anupam Rama: Thanks so much for taking the question.

Hey, guys. Thanks, so much for taking the question.

Rajesh Malik: Second, we've also completed enrollment in our 24-patient trial to clarify the mechanism, of action of trialocycline in participants with neoadjuvant triple-negative breast cancer.

Anupam Rama: Just a question on the trilocyclic MOA study, the mechanism of action study, kind of what, is the win scenario there, in your opinion, and how might that change the view of, say, Preserve 1 versus some of the efficacy studies that have been cited on this call?

Just a question on the trial uptick Lib Moh study the mechanism of action study kind of what's the win scenario there in your opinion and how might that change that view.

Preserve one versus some of the efficacy study that had been cited on this call. Thanks, so much.

Anupam Rama: Thanks so much.

Rajesh Malik: Yeah.

Rajesh Malik: Hey, Anupam.

Rajesh Malik: Raj here.

Rajesh Malik: So, yes.

Yes, no problem Raj here, so yes so.

Rajesh Malik: So, it's, you know, what we've shown previously in preclinical studies as well as with peripheral, blood analysis from our clinical studies is that the impact of trilocyclic is in the T cell compartment largely.

What we have shown previously in preclinical studies as well as with peripheral blood analysis from our clinical studies is that the impact of <unk> in the T cell compartment, largely so we'll be looking at effects on CDA positive T cells T regulatory cells, but not just the <unk>.

Rajesh Malik: We expect to provide initial immune endpoint results from this trial, including trialocycline's, impact on CD8-positive T cells and regulatory T cells, or Tregs, in the tumor microenvironment in the fourth quarter of this year, with pathological complete response and other immune and profiling data in 2023.

Rajesh Malik: And third, we expect to present preliminary safety data from our Phase II trial in triple-negative, breast cancer designed to evaluate the additive combination potential of trialocycline with the antibody drug conjugate sasituzumab-CoV-T can.

Rajesh Malik: So, we'll be looking at effects on CD8 positive T cells, G regulatory cells, but not just, the numbers by immunohistochemistry, but also sort of more functional readouts.

<unk> by Immunohistochemistry, but also sort of a more functional readouts other cells activated which subsets are present.

Rajesh Malik: Are the cells activated?

Rajesh Malik: Which subsets are present?

Rajesh Malik: You know, one of the interesting things that I think we've discussed in the past is that, transient CDK4-6 inhibition can increase the formation of memory CD8 positive T cells.

One of the interesting things.

And I think we've discussed in the past is that.

Transient CDK <unk> inhibition can increase the formation of memory CDA positive T cells, so that could be some.

Rajesh Malik: So, that could be something that we're, you know, that we'll be interested in looking, at as well.

That where that will be interested in looking at as well so it's going to be.

Rajesh Malik: So, it's going to be a very holistic assessment of the immune mechanism.

Very holistic assessment of the immune mechanism.

Rajesh Malik: We're also going to look at peripheral blood from these patients so we can make correlations, with what's happening in the tumor with the peripheral blood.

<unk>.

We're also going to look at peripheral blood from these patients. So we can make correlations with what's happening in the tumor with the peripheral blood.

Rajesh Malik: And this would, of course, help us going forward because it's much easier to look at peripheral, blood going forward rather than looking within the tumor microenvironment.

And this will of course help us going forward because it's much easier to look at peripheral blood going forward rather than looking within the tumor microenvironment.

Rajesh Malik: So, a win scenario in your terminology would really be showing that trilocyclic can modulate, the tumor immune microenvironment in a variety of ways.

So if a wednesday aerial in your terminology would really be.

Showing that <unk> can modulate the tumor immune microenvironment and a variety of ways.

Anupam Rama: Thanks for taking our questions.

Anupam Rama: Sure.

Thanks for taking our question.

Anupam Rama: Thanks, Dr. Papp.

Sure. Thanks, Sean.

Operator: And your next question is from Troy Langford of Cowen.

And your next question is from Troy Langford of Cowen Your line is open.

Troy Langford: Your line is open.

Troy Langford: Hi, everyone.

Troy Langford: Thanks for taking our question, and congrats on all the great progress in the quarter.

Hi, everyone. Thanks for taking my question and congrats on another great progress in the quarter just.

Troy Langford: Just two quick ones on the Cocella launch from us.

Two quick ones on the Casella launch from us.

Troy Langford: First, on the new sales initiative, how long do you think it will take before you'll see, an effect on quarterly sales?

First on the new sales initiatives, how long do you think it'll take before you will see an effect on on quarterly sales. So do you think we could see an effect over a quarter or two do you think it will play out over a longer period of time, and then I have a follow up after that.

Troy Langford: So, do you think we could see an effect over a quarter or two, or do you think it'll play, out over a longer period of time?

Troy Langford: And then I have a follow-up after that.

Andrew Perry: You know, I think we're not in a position necessarily to provide too many predictions, there.

I think we're not in a position that salt lake to provide too many predictions there.

Andrew Perry: What I would say is that at the account-by-account level, we can see rapid improvement due to, execution improvement.

I would say is that the account by account level, we can see rapid improvement.

Andrew Perry: So, we'll be looking for that account-by-account.

Due to execution improvement so we'll be looking for that account by account as to have it lathers up quarter to quarter.

Andrew Perry: As to how it lathers up quarter-to-quarter, I don't want to second-guess that at this, point.

I don't want to.

Troy Langford: Okay, great.

I don't want to second guess at this point.

Okay great.

Definitely and then the next question I have is.

Does anything particular distinguish the last handful of top casella accounts that you all haven't reached yet.

Or do these represent bigger systems that are more difficult to break into or something else like that.

Yes, I mean, it can be a variety. So sometimes they are accounts are organizations that are completely nocebo access to commercial and they can be a mixture of academic and community in some cases in those ones. We always knew it would take longer because theres just many many fewer shots on goal.

<unk>.

In some cases its organizations that look to co sell up very very early in the launch period, maybe doesn't have all the information they needed.

And our job is really to get them to re evaluate the product and get more of our recent information out in front of them and of course. These organizations. They don't like to retread. So once they've made the decision that you'd like to go back so guessing on the docket for those decisions can take a little bit of time.

Happy we've got some plans in place across both academic and community organizations in that top 100, but I have not yet adopted.

We hope we'll continue to bear fruit and of course those organizations are looking at their peers.

Across the health care environment, and as they see more experienced Lasalle and more success with Casella I'm.

Im sure Theyre going to be excited to actually have those discussions with us.

Okay, great. Thanks for all the all the color.

Thank you Troy.

No further questions at this time I would now like to turn the conference back to Mr. Jack Bailey for closing remarks.

Great. Thank you operator.

We look forward to keeping you updated as we progress. Thank you for joining us today and certainly hope you all stay well. Thank you.

This concludes today's conference call. Thank you all for participating you may now disconnect.

Rajesh Malik: The treatment landscape has continued to change in the U.S., with greater usage of, pembrolizumab in the neoadjuvant and adjuvant setting, resulting in slower progression of disease, which is great news for patients.

Kari Polman: Yeah, good morning.

Troy Langford: That's to help, definitely.

Kari Polman: Thanks for taking my question.

Troy Langford: And then the next question I have is just, does anything in particular distinguish the last handful of top CoFella accounts that you all haven't reached yet?

Kari Polman: So for TNBC, has the change in treatment landscape impacted enrollment in the first line TNBC Phase III trial?

Troy Langford: Like, do these represent bigger systems that are more difficult to break into or something else like that?

Andrew Perry: Yeah, I mean, it can be a variety.

Andrew Perry: So sometimes they are accounts or organizations that are completely no-see, no-access to commercial, and they can be a mixture of academic and community in some cases.

Andrew Perry: And those ones we always knew would take longer because there's just many, many fewer shots on goal.

Andrew Perry: In some cases, it's organizations that looked at CoFella very, very early in the launch period, maybe didn't have all the information they needed, and our job there is really to get them to re-evaluate the product and get more of our recent information out in front of them.

Andrew Perry: And of course, these organizations, they don't like to retread. So once they've made a decision, they don't like to go back.

Andrew Perry: So getting on the docket for those decisions can take a little bit of time.

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

Andrew Perry: We're happy we've got some plans in place across both the academic and community organizations in that top 100 that have not yet adopted, that we hope will continue to bear fruit.

Andrew Perry: And of course, those organizations are looking at their peers across the healthcare environment.

Andrew Perry: And as they see more experience with CoFella and more success with CoFella, I'm sure they're going to be excited to actually have those discussions with us.

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