Q4 2022 G1 Therapeutics Inc Earnings Call

March 1, 2023

Speaker 3: 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-one on your telephone. You will then hear an automated message advising that your hand has been raised.

Speaker 4: To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Vice President of Communications, Will Roberts.

Speaker 5: Thank you, Andrew. Good morning, everyone, and welcome to the G1 conference call to discuss our fourth quarter and full year of 2022 financial results and business update. 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.

Speaker 6: On this morning's call, the team will provide a business overview of the fourth quarter of 2022, including an update on our clinical programs and our commercial progress in that period with CoCELA, which is approved and commercially available to decrease the incidence of chemotherapy-induced myelosuppression in adult patients who had administered prior to a platinum etoposide-containing regimen.

Speaker 7: or to a particular containing regimen for sensitive states to most of lung cancer.

Speaker 8: A Q&A session will follow the prepared remarks. Before we begin, I would like to remind you that the dance webcast contains forward-looking statements within the meaning of the Private Security's Litigation Reform Act of 1995.

Speaker 9: Such statements represent management's judgment as of today and may involve risk and uncertainty that could cause actual results to differ materially from those expressed in or implied by these statements.

Speaker 10: 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.

Speaker 11: Any forward-looking statements represent our views as of today, March 1, 2023.

Speaker 12: Joining me on the call today are Jack Bailey, our Chief Executive Officer, Raj Malik, our Chief Medical Officer, Andrew Perry, our Chief Commercial Officer, and Jen Moses, our Chief Financial Officer.

Speaker 13: And with that, I'll turn the call over to Jack. Thanks, Will. Good morning, everyone, and thank you for joining us on the call today. We spoke with you just a couple of weeks ago on the Preserve One results. Since that time, we've continued to move forward with urgency on the rest of the business, focusing on three core goals.

Speaker 14: First, regarding sales and small cell lung cancer, we remain confident in the sales trajectory for Cosela in our first lung cancer indication. As you will hear from Andrew, our sales and marketing teams have executed well since the start of the fourth quarter of 2022.

Speaker 15: and bile volume growth returned after experiencing a flat third quarter. This has continued into the first quarter of 2023, with a record month of sales in January and our highest week ever of sales in February . Based on what we are seeing today, we expect our 2023 net post-cellus sales to be a lot higher than the previous year.

Speaker 16: to be in the range of $50 to $60 million, an increase of up to 92% over 2022.

Speaker 17: Second, as Raj will describe, we are focused on executing on our ongoing clinical trials to achieve near-term data readouts, in particular our ADC and MOA phase IIs and our phase III and triple negative breast cancer. Regarding the two phase IIs, initial data were compelling.

Speaker 18: We observed clinically meaningful on-target effects of Trilocyclib to reduce the rates of multiple adverse events when administered prior to the ABC salsutuzumab, including myelosuppression and diarrhea. And the initial results from our mechanism of action trial in neoadjuvant TMBC showed favorable alterations in the tumor microenvironment from just a single dose of Trilocyclib monotherapy.

Speaker 19: And third, we have moved quickly to make the necessary organizational changes to preserve capital, including reducing the workforce by nearly 30 percent, though the sales team remains intact, and also other prudent decisions to reduce spend and extend our cash runway through each of our clinical readouts, including the TMBC pivotal trial.

Speaker 20: Jen will provide more color on these topics.

Speaker 21: We will take these three goals in order. Andrew will first cover our recent commercial efforts since the start of the fourth quarter of 2022. Ross will then provide an update on our clinical program, including a brief overview of the results of Preserve 1 and our efforts to understand those results.

Speaker 22: Finally, Jen will provide financial results for the quarter and as mentioned discuss the actions we have taken to extend our cash runway. Then I'll be back for some concluding comments. With that, I'll turn the call over to Andrew. Thank you Jack. I'm glad to be with you today to provide an update on our fourth quarter 2022 sales performance. The actions we took to drive growth in the fourth quarter.

Speaker 23: and how those actions have continued to deliver growth into Q1223. Our goals in the fourth quarter were to restore volume growth after a flat third quarter, and to build a broader platform for future growth based on more customer organizations driving significant volume each quarter.

Speaker 24: We delivered on both of those goals in Q4 and I will discuss some of the factors underlying our performance today. Beginning with sales results, we ended the clerk with $8.9 million in net sales of Q7, representing 8% file volume growth compared with Q3.

Speaker 25: Volume growth compared with fourth quarter in 2021 was 103%, demonstrating the continued progress we have made with sales execution.

Speaker 26: Volumes grew month over month throughout Q4 and have continued to grow in January and February 2023. In fact, January was our highest volume month launched today with volume strength continuing throughout February . Two months into Q1, our quarterly growth is tracking well above the 8% growth we are reporting today for Q4. The fall 2020-MEAA will slow down from the 8% growth only to the 15%, which could possibly

Speaker 27: As we stated on our last call, in the extensive small cell lung cancer market, our quarterly growth is highly reliant on gaining new patients either from new accounts or from existing accounts in order to compensate for patients who complete their chemotherapy regimen and drop-off therapy.

Speaker 28: I'm happy to report that we significantly increased the number of new accounts ordering Costella in Q4. We brought on board almost 100 new accounts in Q4 compared with around 70 in Q3.

Speaker 29: Moving into 2023, we have continued to add new accounts at the rate of around 1 per day. Many of these new accounts are affiliated with larger parent organizations, and we added 8 new top 100 organizations in Q4, and 2 so far in Q1, giving us a total of 71 of the top 100 which have ordered CoCELO launch today. The most recent of these from just last week was one of the largest academic centers in the US.

Speaker 30: and demonstrates the continued interest in the unique benefits of Cosela. Within Q4, 54 of those organizations had orders which supports our continued high overall reorder rate of around 80%. Our estimate of Cosela patient share continues to grow and in Q4 increased to approximately 9% in the first line market, which represents the majority of our use.

Speaker 31: One of our goals as we grow our business is to create a broader platform of organizations with deep adoption.

Speaker 32: For most quarter since launch, three customer organizations have driven around 20% of volume in each quarter. In Q4, we saw five organizations driving 20% of volume. In fact, the highest volume organization in the fourth quarter will have 400% from Q3 to Q4. Q4.

An irrelevably rare tumor type, such as small-to-lum cancer, having more customers with deep adoption should provide more stability in our quarterly volumes. We saw a 77% of volume in the quarter come through community clinics and hospitals and 23% of volume for academic centers.

This reflects some of the high growth we saw in the quarter from large community clinic networks. 98% of our volume in the quarter was in commercial supply, with 2% provided through our patient assistance program. Our payer mix remains stable with the majority covered by Medicare, and third-party payer reimbursement has remained strong. Turning into Q1 2023.

With several new top 100 organizations and many new accounts other than the prior quarter, we have for Q1 an investor position in the last quarter, and have been encouraged by January and February the month. Our focus going forward is continuing to build a broader base of people as open customers with emphasis on community clinic networks. We now have three volume-based agreements with large community oncology provider networks and are progressing additional contract opportunities.

While these contracts can take a little time to fill the gap up to speed, we've already seen Q1 quark for today increases in demand in these contract organizations of over 30% so far.

We have also continued to make operational efficiencies where it made sense, including some consolidation of territories, and a redeployment of one sales representative to a virtual hybrid role, we can augment our digital marketing and provide support for unstaffed territories. Overall, this was a quarter where we focused our execution on building a broader base of customers with high growth potential and were able to create sustained volume growth.

while also driving some efficiencies in our commercial model. Our performance in Q4, 2022 and Medway NTQ-12023 confirms that there remains significant growth potential in small cell for Cousela. That, I'll turn the call over to Raj. Thanks, Andrew, and good morning, everyone.

As Jack mentioned, we've had a number of important data readouts since the end of the third quarter, although the most important of them, the phase three readout from the pivotal preserve one trial, did not work out as we had hoped. I'll touch on each of them, starting with colorectal cancer, so I won't go into the same level of detail as I did on the call two weeks ago.

All of the results were confounded by less favorable preliminary antitumor efficacy results, including early indicators of survival.

Preserve one yet again confirmed that LILA protection benefit of trial acyclet. For example, the inclusion of trial acyclet to four-fox theory and Bavocysamab reduced the rates of many measures of malicepression compared to placebo, including achieving the co-primary endpoints with statistical significance.

However, we decided to discontinue the trial given the low likelihood of achieving the PFS and OS endpoints based on the preliminary anti-tumor efficacy data to date.

This adverse effect on atotumor efficacy.

appears to be limited to this chemotherapy regimen used in colorectal cancer.

As other clinical trials of trilocyclib, in combination with different chemotherapies in patients with extensive state small cell lung cancer,

And triple negative breast cancer did not demonstrate this adverse antitumor efficacy signal.

In fact, in the phase II triple negative breast cancer study, we saw the opposite, a statistically significant improvement in overall survival in patients receiving trilocyclic compared to placebo.

We are conducting a variety of analyses to understand the results. For example, we are looking into the possibility that Trilocyclib may have had an unanticipated negative interaction with 5-FU, which would not have been identified as a risk in any of the preclinical assessments we performed. And also there is the possibility that some of us in the holisticLLP patient have not

We look to communicate the results of these and other analyses over the coming few months.

At the start of the fourth quarter, we also had readouts from each of our ongoing Phase 2 trials. Starting with the ADC trial in combination with Sestitusa Mab, initial results on the first 18 patients showed a clinically meaningful on-target effect of trial and cyclid.

to reduce the rates of multiple adverse events compared to Sassatuzumab single agent data from the Ascent trial.

including any grade and grade 3 for Neutropenia and any grade and grade 3 for diarrhea. We expect to complete enrollment in this trial this week.

We expect to present a more comprehensive data set including safety and initial efficacy results, including outcome by tumor PDL-1 status at a medical meeting in the second quarter of this year.

In December , we presented initial results from our Mechanism of Action trial in neo-adjuvant triple negative breast cancer at the San Antonio Breast Cancer Symposium.

We noted favorable alterations in the tumor microenvironment following a single dose of trial cycle and monotherapy.

with a trend towards an increased CDA T cell.

to T-regular Result Ratio, which is consistent with prior data.

We expect to present initial tumor pathological complete response results.

again including outcome by Human PDL1 status in the second quarter of this year.

And in January , we provided an initial update on Preserve 3 in bladder cancer, showing similar but numerically lower response rate in the trilocyclobond.

We anticipate additional safety and efficacy data, including preliminary progression free survival data in the middle of this year.

Finally, our Phase 3 trial in triple negative breast cancer is based on the foundational data from our Phase 2 trial that showed a statistically significant survival advantage.

for patients enrolled in both trials cycle of arms compared to placebo. We have previously said that the interim overall survival analysis was expected in the second half of 2023.

following occurrence of 70% of the events required for the final analysis.

The interminalysis is dependent on having the protocol defined number of events.

We track the occurrence of events in a blinded way at a regular interval.

Based on recent evaluations, the number of actual events appear to be occurring more slowly than protected.

Therefore, we now expect the interim OS analysis to be conducted in the first half of 2024.

As events accumulate, we'll be able to refine this estimate further.

So a lot of data coming over the next several months. With that, I'll turn the call over to Jen for a review of the financial results, Jen.

Thanks, Raj, and good morning, everyone. As Will mentioned, full financial results for the fourth quarter and full year 2022 are available in this morning's press release and will be in the 10K, which we intend to file today after market closes. Our total revenue for the fourth quarter of 2022 was 10.3 million.

comprised net costello revenue of 8.9 million and license revenue of 1.4 million. The license revenue from the current quarter is primarily related to clinical trial reimbursements from our partners, sincere and each Ira Q4 the same period in 2021, total revenue was 5.7 million, including 4.4 million of net product revenue.

For the full year of 2022, Chobo revenue was 51.3 million, comprised of 31.3 million in net costella revenue and licensed revenue of 20 million.

Cost of goods sold for the three months ended December 31, 2022 with $1 million, compared to $0.4 million for the same period in 2021.

Kraft a good soul for the full year 2022 with 3.7 million compared to 2 million for the prior year.

Our research and development expenses for the fourth quarter of 2022 were $16.6 million, compared to $19.8 million for the fourth quarter of 2021. The period-over-period decrease in R&D expenses was primarily due to reduced clinical trial costs. R&D expenses for the full year 2022 were $16.6 million.

for $83.3 million compared to $76.2 million for the prior year.

Our selling general and administrative expenses for the fourth quarter of 2022, or 23.6 million, relatively flat with the 23.2 million for the fourth quarter of 2021. Comparing the two periods, increases in personnel cost due to increased headcount and sales were offset by a decrease in fee-as-paid to BI and decreased professional...

$245.1 million, compared to $221.2 million as of December 31, 2021. This includes $52 million in net proceeds from our fourth quarter 2022 underwritten public offering.

Finally, regarding revenue, expense, and cash runway guidance for 2023, as Jack mentioned, our net product revenue guidance for 2023 is a range between 50 and 60 million. This guidance reflects an adjustment to our anticipated growth to net percentage. Our growth to net adjustment in 2022 was in the mid to high teens. Going forward, we expect it to be in the low to mid 20s, primarily due to the potential impact of the wastage provision of the 2021 infrastructure bill.

When forecasting our license revenue, we anticipate receiving a $5 million milestone payment from EQRx in the first half of 2023, due upon dosing of their first patient in their pivotal trial for larynx cyclic.

Regarding expense guidance, we've completed a reduction in force of approximately 30 percent and have also reduced anticipated spend throughout the organization. We currently expect our 2023 operating expenses to be 20 to 30 percent lower than that of 2022. While we won't see an impact in the first quarter due to severance and crisis, we will continue to see an increase in the number of people who are in the workforce.

the UN cash equivalent marketable security balance of approximately 70 to 80 million.

With that, I'll turn the call back over to Jack from closing comments. Jack? Thank you, Jen. Raj, Andrew, and Will.

As always, I also want to thank people living with cancer for your inspiration. You drive us toward our goals every day.

Now as I mentioned at the start we have three core goals for the remainder of the year.

First, we remain confident in the potential of Cousella in lung cancer. And as you heard from Andrew, we made good progress since the end of the third quarter, including returning to bile volume growth in the fourth quarter of 2022 with month over month growth throughout the fourth quarter, January being our highest bile volume months since launch, and volume strain has continued through February .

Given our progress, we have provided formal guidance this morning of between $50 and $60 million in net co-sell revenue in 2023.

We have provided formal guidance this morning of between $50 and $60 million in net co-seller revenue in 2023.

Second, clinical trial execution. Our initial phase two readouts over the past several months have been compelling, in particular from the ADC and MOA trials. As you heard from Raj, we expect to present more comprehensive data from both of those in the second quarter, followed by additional data from the bladder cancer trial mid-year.

We believe that positive data from any of them should be important value drivers for us that they will clarify the next indications and combinations we will pursue.

And given that the number of events occurring more slowly than anticipated, the interim OS analysis for the pivotal TMC trial is now expected in the first half of 2024. And third, capital preservation. Although it's difficult to make these decisions, there is a lot of work to be done to make

We are as of yesterday, smaller than we were on our February 13th call, and we are making prudent reductions to our spend to extend our cash runway throughout each of our clinical radials.

of yesterday, smaller than we were on our February 13th call, and we are making prudent reductions to our spend to extend our cash runway throughout each of our clinical radials.

Finally, as you saw in this morning's press release, this will be Jen's last call with us as Chief Financial Officer. As part of our succession planning, Jen has resigned from G1 effective on the 15th of this month, but will remain on as a senior advisor for one year. On behalf of the entire executive team,

I want to express my gratitude to her for everything she brought to the CFO role and for her dedication to the cancer patients we seek to treat. At the same time, I'm pleased to announce that our controller, John Umstead, will be appointed to the role of CFO .

John has been with G1 since 2018, after five years with PricewaterhouseCoopers before that. And we look forward to introducing him on our next call. Thank you for your time this morning. We will speak again in this format on the first quarter of the 2023 call, and we'll have a variety of opportunities to communicate the upcoming data from our Phase II trials throughout the year.

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? Certainly. As a reminder, to ask a question, please press star 1 1 on your telephone.

and turn it over to the Q&A operator, would you please remind our listeners how to ask a question? Certainly. As a reminder, to ask a question, please press star 11 on your telephone

So with your question, please press star 1 1 again. Please stand by while we compile the Q&A roster.

Please press star one one again. Please stand by while we compile the Q&A roster. H not another of course we can share and approach really well.

And our first question comes from the line of Gil Blum with Needham and Company. Good morning and thanks for taking our question. Just to make sure I got this sort of correct, so the...

Pivotal breast cancer study will be reading its interim next year due to a slow accumulation of events or difficulty enrolling.

Hey, Dale, I can address that one. No, it's a slower accumulation of events. The trial is fully enrolled with 187 patients.

Okay, that's important to the extent.

The other question that I have is, we discussed some post-mortem analysis on the preserved one study. Any potential timeline guidance on when we might be able to see that data?

Yeah, those are active analyses now. And so I'd say over the upcoming month we should have more information. Our leading hypothesis, as I mentioned, is really five of you. And we're looking at how patients did both on the abduction part of the study and the maintenance part of the study.

broadening the number of accounts in order to increase the slow of patients and given relatively fast turnover, because of the way the treat is provided. How are you planning to drive more growth here? Is there more of white space to be had? No.

Thanks, Skell, yes. So many of those new accounts, and we talked about roughly 100 new accounts coming onboard in Q4 and extending it around one per day going into Q1. Many of those accounts are actually affiliated with a large parent organization, one of the top 100s or beyond the top 100.

So really it becomes a measure of depth when a new account comes on board in the vast majority of cases and that can be driven by standardization in the EMR which we've seen can very quickly drive Cosela uptake when the EMR has Cosela as a standard option for patients coming in receiving chemotherapy or in some cases it can be driven by internal marketing from the large organization that

organizational goals and they cascade the use of CoCELA through the organization and then new accounts become aware of it as the parent organization cascades that information.

All right, thank you for taking our questions and good luck.

All right, thank you for taking our questions, and have good luck. Thank you, Joe.

Thank you. And our next question comes from the line of Joseph Thumb with Cowan.

Hi there, good morning. Thank you for taking our questions. Maybe the first one to something combination with Tridelvi. What sort of PSF improvement are you looking for? Well, we see that data update. Then it's the correct comp sort of five months here. And then when you think about the decision to go forward, it may be advances to next steps. Would you be waiting for overall survival?

or PDL-1 status, so it will be a fatality of the data that we'll see. And those will be the key drivers for the next step. Yeah, we know we wouldn't wait for overall survival. It would really be what the Visually indicators of efficacy show.

Great. And then maybe just a commercial question, what's sort of the average length of time a patient is on Cicella in the real world? And as some of these new accounts are coming on in the fourth quarter, are you seeing them being used in different patients that that sort of overall usage timeline could potentially expand in the years to come? How do you think about average? Yeah, thanks. So as you know, in the first line thing you would expect around four cycles.

cycles and of course our analysis doesn't always pick up on that. So when people use Coachella and not spathing they do tend to use it for every cycle.

Great. Thank you very much. Thanks, John .

Great. Thank you very much. I'm strong. Thank you.

And our next question comes from the line of Dane Leon with Raymond James. Thanks for taking the questions and congratulations on the progress. So your commentary around the start of the year for Catella uptake was obviously highly encouraging with the explicit financial guidance. Thank you.

Can you just take us through what you think has catalyzed the expanded use and adoption of Casella? Obviously, you know, for the fire 3 quarters in 2022 sales were relatively flat. But it seems like you've been able to invigorate some growth there. So.

Anything you can elucidate in terms of what's driving that, I think would be super helpful. Thank you. Yeah, thanks. So obviously we had great success in Q2 and we saw 60% volume growth within the quarter of Q2. Much of that was driven by the addition of new accounts and new patients. We were not as successful in driving new accounts and new patients in Q3. We only added 17 QC compared with over 100 in Q2.

Q4, we were back to strength adding new accounts for Q4 and new patients in Q4 and that's really been the driver because those new accounts come aboard, some of those new accounts, some of that new account business then goes into Q1 of 2023 so it gave us a much better exit path into the next quarter. You know, the reason for that, so we've focused very much on pull-through in the community.

ever since launch, which is very appealing in the community setting. And some of those community organizations as they come on board, they can range from, you know, five, six, ten individual accounts to sometimes eighty to a hundred individual accounts within one organization. And as you see, trial and then the physicians prescribing the product, seeing the benefits of the product.

Once it's communicated not to appear to peer, you can see a very rough adoption about the rest of our community oncology network. So that's definitely been our sweet spot for execution in Q4 with double data in there and we've seen that success continue in Q1. Great, thank you. Maybe another follow-up question.

Can you just contextualize what the scale and scope of the data from the phase 2 study with sepsis and Mavgov and T-Can will be in the second quarter? I guess number of patients and median duration of follow-up would be super helpful for people to set expectations. Thank you. Thank you.

Yeah, hey Dane. So we'll, you know, this is Raj, we'll provide of course updated safety data and, you know, data on all the patients. As I said, we'll be completing enrollment. We expect approximately 30 patients' worth of data at the time.

You know, enrollment's been going on for longer than a year, about a year and two or three months. So, you know, I couldn't tell you what the median duration of follow-up would be at the time of the presentation, but obviously it would be long enough for us to make a call on these preliminary PFS.

also currently evaluating and then presenting.

Thank you. I'm sorry, one last one for me. The question, I think we're getting in and it relates to some of that earlier questions. But is preserved to actually have a futility analysis on OS designed into the study that could be evaluated before?

read out in the first half of 24. I think people are asking that question within the context of understanding what the actual hazard ratio needs to be on OS. As an end point in whether it would be prudent to maybe look at an inter-owned and see if you know there could be futility and.

readout in the first half of 24. I think people are asking that question within the context of understanding what the actual hazard ratio needs to be on OS as an end point and whether it would be prudent to maybe look at it and then around that see if, there could be futility and continuing the study. Thank you.

Yeah, we did not include a futility analysis. It was really an interim for improvement in efficacy, and primarily because of the signal we saw from our phase two study. Obviously, the other comment that make is the data monitoring committee reviews the data regularly. So if they feel like they need to run a futility analysis, take it of course, do that on their own.

I think we did not include a futility analysis. It was really an interim for improvement in efficacy and primarily because of the signal we saw from our phase two study. So obviously the other comment that make is the data monitoring committee reviews the data regularly. So if they feel like they need to run a futility analysis, take it of course do that on their own as well.

Okay, thank you. Sure. Thank you. And as a reminder, to ask a question, please press star 1 1 on your telephone. One moment, please. Our next question comes from the line of Priyanka Grover with J. P. Morgan.

Hi everyone, this is Priyanka on Prawna Pum Rama. We just have a quick question. What exactly, or could you provide some color, was driving the Delta between the 2020-23 guidance of 50 to 60 million on metrics, is it just penetration or is there some seasonality like in the third quarter in SCLC? Thank you.

Yeah, so what's driving it is the rate of increase that we have seen in our success mainly in these community clinics and the rate of continued adoption in new accounts and our estimate of how that will extend through the year based on what we've learned so far A musical sell up a building

with that strategy. We're doubling down on that strategy going into this year and our forecast is really based on that dynamic. And I think it's important to remember this is a several hundred million dollar market, seven hundred million dollar market. We are scratching the surface of the potential here. There is plenty of room for us to grow in a cheap East Parcance.

Thank you. And you're still. Thank you so much. Thank you. And I'm showing no further questions. So with that, I'll hand the call back over to CEO Jack Bailey for any closing remarks.

Great, thank you operator. As always, we look forward to keeping everybody updated on our progress. But for now, that concludes this call. Thank you for joining us today. We'll look forward to being in touch. Ladies and gentlemen, this does conclude today's program.

As always, we look forward to keeping everybody updated on our progress. But for now, that concludes this call. Thank you for joining us today. We look forward to being in touch. Ladies and gentlemen, this will conclude today's program.

The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 11.

The conference will begin shortly. To raise and lower your hand during Q&A you can dial star 11. D a lesify to get more information on how to? faster, while testingashi.

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and welcome to the G1 Therapeutics 4th quarter 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 1-1 on your telephone. You will then hear an automated message advising that your hand has been raised.

To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Vice President of Communications, Will Roberts.

Thank you, Andrew. Good morning, everyone, and welcome to the G1 conference call to discuss our fourth quarter and full year of 2022 financial results and business update. 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.

On this morning's call, the team will provide a business overview of the fourth quarter of 2022, including an update on our clinical programs and our commercial progress in that period with Cousela, which is approved and commercially available to decrease the incidence of chemotherapy and due smile of suppression and adult patients would administer prior to a platinum at toposite containing regimen or topotekin containing regimen for sensitive to a small cell lung cancer.

On this morning's call, the team will provide a business overview of the fourth quarter of 2022, including an update on our clinical programs and our commercial progress in that period with COSEL-UP, which is approved and commercially available to decrease the incidence of chemotherapy and due smile of suppression and adult patients would administer prior to a platinum at toposite containing regimen or topotekin containing regimen for extensive stage small cell lung cancer. A Q&A session will follow the prepared remarks.

Before we begin, I would like to remind you that the data webcast contains forward-looking statements within the meaning of the Private Security's litigation reform act of 1995. Such statements represent management's judgment as of today and may involve risk and uncertainty 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 findings with the Security and Exchange Commission, which were available from the SEC or on our corporate website.

Any forward-looking statements represent our views as of today, March 1, 2023. Joining me on the call today are Jack Bailey, our Chief Executive Officer, Rhinism Hallock, our Chief Medical Officer, Andrew Perry, our Chief Commercial Officer, and Jen Moses, our Chief Financial Officer.

And with that, I'll turn the call over to Jack. Thanks, well, good morning everyone, and thank you for joining us on the call today. We spoke with you just a couple of weeks ago on the Preserved One results. Since that time, we continue to move forward with urgency on the rest of the business, focusing on three core goals.

First, regarding sales and small cell lung cancer, we remain confident in the sales trajectory for COSELET in our first lung cancer indication. As you will hear from Andrew, our sales and marketing teams have executed well since the start of the fourth quarter of 2022 and by-all-bomb growth returned after experiencing a flat third quarter. The test continued into the first quarter of 2023.

with a record month of sales in January and our highest week ever of sales in February . Based on what we are seeing today, we expect our 2023 net costella sales to be in the range of $50 to $60 million dollars and increase of up to 92% over 2022. Second, as Raj will describe, we are focused on executing on our ongoing clinical trials to achieve near-term data readouts. In particular, our ADC and MOA phase 2s and our phase 3 and triple negative to press cancer.

Regarding the two phase twos, initial data work compelling. We observed clinically meaningful on-target effects of trial and cycle to reduce the rate of multiple adverse events when administered prior to the ADC South Stoosomab, including mildly suppression and diarrhea. And the initial results from our mechanism of action trial in VO Agument TMBC.

show favorable alterations in the two-way micro-environment from just a single dose of trial aside with monotherapy. And third, we have moved quickly to make the necessary organizational changes to preserve capital, including reducing the workforce by nearly 30 percent, though the sales team remains intact. And also other prudent decisions to reduce spend and extend our cash runway through each of our clinical readouts, including the TMBC Pivotal Trial.

General provide more color on these topics. We will take these three goals in order. Andrew will first cover our recent commercial efforts since the start of the fourth quarter of 2022. Ross will then provide an update on our clinical program, including a brief overview of the results of Preserve 1 and our efforts to understand those results. Finally, General provide financial results for the quarter, and as mentioned, discuss the actions we have taken to extend our past runway. Then I'll be back for some concluding comments. With that, I'll turn the call over to Andrew. Thank you, Jack. I'm glad to be with you today to provide an update on our fourth quarter of 2022's sales performance.

The actions we took to drive growth in the fourth quarter and how those actions have continued to deliver growth into Q1 2023. Our goals in the fourth quarter were to restore volume growth after a flat third quarter and to build a broader platform for future growth based on more customer organizations driving significant volume each quarter. We delivered on both of those goals in Q4 and I will discuss some of the factors underlying our performance today.

Beginning with sales results, we ended the quarter with $8.9 million in net sales of CO7, representing 8% file volume growth compared with Q3. Volume growth compared with fourth quarter in 2021 was 103%, demonstrating the continued progress we have made with sales execution.

Volumes grew month over month throughout Q4 and have continued to grow in January and February 2023. In fact, January was our highest volume month launched today with volume strength continuing throughout February . Two months into Q1, our quarterly growth is tracking well above the 8% growth we are reporting today for Q4.

As we stated on our last call, in the extensive state small cell lung cancer market, our quarterly growth is highly reliant on gaining new patients either from new accounts or from existing accounts in order to compensate for patients who complete their chemotherapy regimen and drop-off therapy. I'm happy to report that we significantly increased the number of new accounts ordering number angle cell at NQ-4.

we added eight new top 100 organizations in Q4 and two so far in Q1, giving us a total of 71 of the top 100 which of ordered Cousela launch today. The most recent release from just last week was one of the largest academic centers in the US and demonstrates the continued interest in the unique benefits of Cousela. Within Q4, 54 of those organizations had orders. The most recent release was one of the most recent release of Cousela launch.

which supports our continued high overall re-order rate of around 80%. Cosella patient share continues to grow in Q4 increase to the approximately 9% in the first line market, which represents the majority of our use. One of our goals is to grow our businesses to create a broader platform of organizations with deep adoption. For most quarter-sense launch, three customer organizations have driven around 20% of volume in each quarter. In Q4, we saw five organizations driving 20% of volume.

In fact, the highest volume organization in the fourth quarter grew over 400% from Q3 to Q4. An irrelevably rare tumor type, such as small-to-lunk cancer, having more customers with deep adoption, should provide more stability in our fourth-ily volumes. We saw a 77% of volume in the quarter come through community clinics and hospitals and 23% of volume from academic centers. This reflects some of the eye growth we saw in the quarter from large community clinic networks.

with 2% provided through our patient assistance program. Our pair of mix remains stable with the majority covered by Medicare, and third-party pay-over reimbursement has remained strong. Looking into Q1 2023, with several new top 100 organizations and many new accounts added in the prior quarter, we entered Q1 in a better position in the last quarter and have been encouraged by January and February demand. Our focus going forward is continuing to build a broader base of deeply-adulting customers with emphasis on community clinic networks.

We now have three volume-based agreements with large community oncology provider networks and are progressing additional contract opportunities. While these contracts can take a little time to fill it up to speed, we've already seen Q1-Q4 for today increases in demand in these contract organizations of over 30% so far. We've also continued to make operational efficiencies where it made sense, including some consolidation of territories and a redeployment of one sales representative to a virtual hybrid role, which can augment our digital marketing and provide support for unstathed territories.

Overall, this was a quarter of where we focused our execution on building a broader base of customers with high growth potential and were able to create sustained volume growth while also driving some efficiencies in our commercial model. Our performance in Q4, 2022 and Medway NTQ-12023 confirms that there remains significant growth potential in small cell or Cousela. With that, I'll turn the call over to Raj.

Thanks, Andrew, and good morning, everyone. As Jack mentioned, we've had a number of important data readouts since the end of the third quarter. Although the most important of them, the Phase III readout from the pivotal preserve one trial did not work out as we had hoped. I'll touch on each of them, starting with colorectal cancer.

So I won't go into the same level of detail as I did on the call two weeks ago. All of the results were confounded by less favorable preliminary antitumor efficacy results, including early indicators of survival, preserved one yet again confirmed the wilder protection benefit of trial acyclic. For example, the inclusion of trial acyclic to full-foxillary and bavocysamab reduced the rates of many measures of modest oppression compared to placebo, including achieving the co-prime and points with statistical significance.

However, we decided to discontinue the trial given the low likelihood of achieving the PFS and OSN points based on the preliminary anti-tumor efficacy data today.

This adverse effect on antitumal efficacy appears to be limited to this chemotherapy regimen used in colorectal cancer as other clinical trials of trial acyclic in combination with different chemotherapies in patients with extensive state-small cell lung cancer and triple negative breast cancer did not demonstrate this adverse antitumal efficacy signal.

In fact, in the phase II triple negative breast cancer study, we saw the opposite, a statistically significant improvement in overall survival in patients receiving trilocyclib compared to placebo.

We are conducting a variety of analyses to understand the results. For example, we are looking into the possibility that Trilis-Heightliff may have had an unanticipated negative interaction with five FU, which would not have been identified as a risk in any of the pre-clinical assessments we performed. We look to communicate the results of these and other analyses over the coming few months.

Since the start of the fourth quarter, we also had readouts from each of our ongoing Phase II trials. Starting with the ADC trial in combination with sesatusimab, initial results on the first 18 patients showed a clinically meaningful on-target effect of trilocyclid to reduce the rates of multiple adverse events compared to sesatusimab single-agent data from the JASANT trial, including any grade and grade three for neutropenia.

and any grade in grade 3-4 diarrhea. We expect to complete enrollment in this trial this week. We expect to present a more comprehensive data set including safety and initial efficacy results, including outcome by tumor PD-L1 status at a medical meeting in the second quarter of this year.

In December , we presented initial results from our mechanism of action trial in new adjuvant triple negative breast cancer at the San Antonio breast cancer symposium.

We noted favorable alterations in the tumor microenvironment following a single dose of trial cycle monotherapy, which accrued towards an increased CD8 T cell to T regulatory cell ratio, which is consistent with prior data.

We expect to present initial tumor pathological complete response results, again including outcome by Tumor PD-L1 status in the second quarter of this year.

And in January , we provided an initial update on Preserve 3 in bladder cancer, showing similar but numerically lower response rate in the trilocycl bond.

We anticipate additional safety and efficacy data, including preliminary progression fee survival data in the middle of this year. Finally, our Phase III trial in triple negative breast cancer is based on the foundational data from our Phase II trial that showed a statistically significant survival advantage for patients enrolled in both trial cycle arms compared to placebo.

We have previously said that the interim overall survival analysis was expected in the second half of 2023, falling occurrence of 70% of the events required for the final analysis. Since the interim analysis is dependent on having the protocol-defined number of events, we track the occurrence of events in a blinded way at a regular interval. Based on recent evaluations, the number of actual events appear to be occurring more slowly than protected.

Therefore, we now expect the interim OS analysis to be conducted in the first half of 2024. As events accumulate, we'll be able to refine this estimate further. So a lot of data coming over the next several months. With that, I'll turn the call over to Jen for a review of the financial results. Jen?

total revenue was $51.3 million, comprised of $31.3 million in net CoCELA revenue, and license revenue of $20 million.

Cost of goods sold for the three months ended December 31, 2022 was 1 million compared to 0.4 million for the same period in 2021. Cost of goods sold for the full year 2022 was 3.7 million compared to 2 million for the prior year. Our research and development expenses for the fourth quarter of 2022 were 16.6 million.

Compared to 19.8 million for the fourth quarter of 2021, the period over period decreased in R&D expenses was primarily due to reduced clinical trial costs. R&D expenses for the full year 2022 were 83.3 million compared to 76.2 million for the prior year. Our settling general and administrative expenses for the fourth quarter of 2022.

or $23.6 million, relatively flat with the $23.2 million for the fourth quarter of 2021. Comparing the two periods, increases in personnel costs due to increased head cap and sales were offset by a decrease in fees paid to BI and decreased professional and administrative expenses. SG&A for the full year 2022 was $100.4 million compared to $95.7 million for 2021. Regarding our cash position, we ended 2022 with cash, cash equivalents and liquid securities of $145.1 million.

compared to 221.2 million as of December 31st, 2021. This includes 52 million in net proceeds from our fourth quarter 2022 underwritten public offering. Finally, regarding revenue expense and cash runway guidance for 2023. As Jack mentioned, our net product revenue guidance for 2023 is a range between 50 and 60 million. This guidance reflects an adjustment to our anticipated growth to net percentage. Our growth to net adjustment in 2022 was in the mid to high teens. Going forward, we expect it to be in the low to mid 20s.

primarily due to the potential impact of the wastage provision of the 2021 infrastructure bill. Our license revenue, we anticipate receiving a $5 million miles jump payment from EQRX in the first half of 2023 due upon dosing of their first patient in their pivotal trial for Lero cyclops. Regarding expense guidance, we've completed a reduction in force of approximately 30 percent and have also reduced anticipated spend throughout the organization. We currently expect our 2023 operating expenses.

to be 20 to 30 percent lower than that of 2022. While we won't see an impact in the first quarter due to severance and cost-associated with reading out and winding down Preserve 1, we'll start to experience these savings in the second quarter with most of it occurring in the back half of the year. With these adjustments to OPEX, the top line guidance provided, and other assumptions around partner revenue, we anticipate the year end cash equivalent marketable security balance of approximately 70 to 80 million.

With that, I'll turn the call back over to Jack from closing comments. Jack? Thank you, Jen, Raj, and June Will. As always, I also want to thank people living with cancer for your inspiration. You drive us toward our goals every day. Now as I mentioned at the start, we have three core goals for the remainder of the year. First, we remain confident in the potential of Cosella in lung cancer. And if you heard from Andrew, we made good progress since the end of the third quarter, including returning to biovolume growth in the fourth quarter of 2022 with month over month growth throughout the fourth quarter, January being our highest biovolume months since launch. And volume strength has continued through February .

We've added nearly 100 new accounts in the fourth quarter, including eight new top 100 organizations with two more added since the start of Q1 to continue to build that broad platform for future growth. Given our progress, we have provided formal guidance this morning of between $50 and $60 million in net Cosello revenue in 2023. Second, clinical trial execution. Our initial phase two readouts over the past several months have been compelling, in particular from the ADC and MOA trials. As you heard from Raj, we expect to present more comprehensive data from...

make these decisions, we are as of yesterday smaller than we were on our February 13th call, and we are making prudent reductions to our spend to extend our cash runway throughout each of our clinical radials.

as of yesterday, smaller than we were on our February 13th call, and we are making prudent reductions to our spend to extend our cash runway throughout each of our clinical radows.

John has been with G1 since 2018, after five years with PricewaterhouseCoopers before that. And we look forward to introducing him on our next call. Thank you for your time this morning. We will speak again in this format on the first quarter of 2023 call, and we'll have a variety of opportunities to communicate the upcoming data from our phase two trials throughout the year. 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?

2018 after five years with Price Waterhouse scoopers before that and we look forward to introducing him on our next call. Thank you for your time this morning. We will speak again in this format on the first quarter of 2023 call and we'll have a variety of opportunities to communicate the upcoming data from our Phase 2 trials throughout the year. With that, I'll close the call and turn it over to the UNI operator. Would you please remind our listeners how to ask a question? Certainly.

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. So withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Your first question comes from the line of Gil Blum with Needham and Company. Good morning and thanks for taking our question. Just to make sure I got this sort of correct, so the pivotal breast cancer study will be reading its interim next year to a slow accumulation of events or difficulty in rolling. Hey, Jay, I can address that one. No, it's a slower accumulation of events. The trial is fully enrolled with 187 patients.

been broadening the number of accounts in order to increase the flow of patients and given relatively fast turnover because of the way the treatment is provided. How are you planning to drive more growth here? Is there more white space to be had? Thanks, Gil. Yes. So many of those new accounts that we talked about roughly, I think, were

standardization in the EMR, which we've seen can very quickly drive Cosella uptake when the EMR has Cosella as a standard option for patients coming in receiving chemotherapy. Or in some cases it can be driven by internal marketing from the large organization that has discovered that Cosella is aligned with their corporate interests and they want all of their...

the use of cocellet through the organization, and that new accounts become aware of that as they pair an organization cuss gates that information.

All right. Thank you for taking our questions and have a good luck. Thank you Joe. Thank you. And our next question comes from the line of Joseph Thumb with Cowan.

Hi there, good morning. Thank you for taking our questions. Maybe it's just one to something combination with Tredelvy. What sort of PSF improvement are you looking for? When we see that data update, then it's the correct comm sort of five months here. And then when you think about the decision to go forward, it may be advances to next steps. Would you be waiting for overall survival and could we see those data?

maybe closer to the end of this year. Thanks. Hey, Joe. Yeah, the comp, as you said, in the stands, it's around that five-month mark for PFS. But we'll be looking at all of the data, so response rate, duration of response. And as I mentioned, also the tumor PDL-1 status, so it'll be a fatality of the data that we'll see. And those will be the key drivers for the next step. Yeah, yeah, we wouldn't wait for overall survival. It would really be what the early indicators of efficacy show.

Great. And then maybe just a commercial question, what's sort of the average length of time a patient at Ancassella in the real world? And as some of these new accounts are coming on in the fourth quarter, are you seeing them being used in different patients with that sort of overall usage timeline could potentially expand in the years to come? How do you think about average?

Yeah, thanks. So as you know, in the first line setting, you would expect around four cycles on 21-day cycles. And on average, we see probably around the bow of 3.3 to 3.5 cycles. Sometimes that's due to patients starting in the second cycle or the third cycle. Sometimes it's also due to patients being initiated in an inpatient setting where you'll only receive one cycle and then being discharged to the community where they receive the subsequent cycles. And of course, our analysis doesn't always pick up on that. So when people use Coachella and not staffing, they do tend to use it for them.

Obviously, you know, for the prior three quarters in 2022, sales were relatively flat, but it seems like you've been able to invigorate the growth there. So, anything you can allude today in terms of what's driving that, I think would be super helpful. Thank you. Yeah, thanks, obviously, and we had great success in Q2, and we saw 60%.

adding new accounts to Q4 and new patients in Q4. And that's really been the driver because those new accounts come aboard, some of those new accounts, some of that new account business then goes into Q1 of 2023. So it gave us a much better exit path into the next quarter. The reasons for that, so we've focused very much on pull through in the community and on improving our ability to execute within community clinics.

We've discovered that the reasons for that are improved access, the opportunity for standardized EMRs that I referred to earlier. Obviously, the success so far of our contracts and the potential for more of that. And the economic value proposition that Kusela has had ever since launched, which is very appealing in the community setting. And some of those community organizations as they come on board, they can range from five, six, ten individual accounts. There's sometimes eight to a hundred individual accounts within one organization. And as you see, and...

trial and then the physicians prescribing the product seeing the benefits of the product wanting to communicate not to appear to peer. You can see a very rough adoption about the rest of our community oncology network. So that's definitely been our sweet spot for execution in Q4 with double data in there and we've seen that success continue in Q1. Great, thank you. Maybe another follow-up question for me. Can you contextualize what the scale scope of the data from the patient?

study with Sousa Tismap, got a T Ken, will be in the second quarter. I get a number of patients in the media duration of follow-up would be super helpful for people to set expectations. Thank you. Yeah, hey, Dane. So, we'll, you know, this is Raj. We'll provide, of course, updated safety data and, you know, data on all the patients, as I said, we'll be completing the enrollment. We expect to approximately 30 patients worth of data at the time. You know, enrollment's been going on for longer than a year, about a year and two or three months. So, you know, I couldn't tell you what the media duration of follow-up would be at the time of the presentation, but obviously it would be long enough for us to make a call and at least preliminary PFAS.

And I think the other point is, since two-merpedial one status is an important consideration, and we're also evaluating the immune hypothesis here for trial, that'll be another important aspect of the mechanism. We will be also currently evaluating and then presenting. Thank you. Sorry, one last one for me. The question, I think we're being in it, relates to some of that earlier questions. But is preserved to actually have a futility analysis on OS designed into the study that could be evaluated?

is since two more media wants data, so there's an important consideration. And we're also evaluating the immune hypothesis here for trial, that'll be another important aspect of the mechanism. And we will be also currently evaluating an end to zoning. Thank you. I think we're getting in. It relates to some of that earlier questions. But is preserved to actually have a few utility analysis on OS designed into the study that could be evaluated before?

read out in the first app, which is 24. I think people are asking that question within the context of understanding what the actual hazard ratio needs to be on OS as an end point and whether it would be prudent to maybe look at an interim that's used. You know, there could be futility and continue to study. Thank you. Yeah, we did not include a futility analysis. It was really an interim for improvement in efficacy and primarily because of the signal we saw from our phase two study. So, you know, obviously, the other comment that make is the data monitoring committee reviews the data regularly. So if they feel like they need to run a futility analysis, take it, of course, do that on their own as well. Okay, thank you. Thank you. And as a reminder, to ask a question, please press star 11 on your telephone.

One moment please. Our next question comes from the line of Priyanka Grover with J.B. Morgan. Hi everyone, this is Priyanka on Prawnapam Rama. We just have a quick question. What exactly, or could you provide some color, was driving the delta between the 20s, 23 guidance of 50 to 60 million on metrics. Is it just penetration or is there some seedinality like in the third quarter in SCLC? Thank you.

So, of course, driving it is the rate of increase that we have seen in our success mainly in the community clinics and the rate of continued adoption in new accounts. There are estimates of how that will extend through the year based on what we've learned so far about the Cousella pattern of adoption. Again, I would say that the single biggest thing that will drive our success in this market is when we move quickly from trial to adoption and the first patient to multiple patients to then multiple accounts within an organization with multiple patients.

We've seen great success over the last few months with that strategy. We're doubling down on that strategy going into this year and our forecast is really based on that dynamic. And I think it's important to remember, this is a several hundred million dollar market, seven hundred million dollar market. We are scratching the surface of the potential here. There is plenty of room for us to grow in a cheap East target. And you're still. Thank you so much. Thank you. And I'm showing no further questions. So with that, I'll hand the call back over to CEO Jack Bailey for any closing remarks. Great. Thank you, operator. As always, we look forward to keeping everybody updated on our progress.

But for now, that concludes this call. Thank you for joining us today. We look forward to being in touch. Ladies and gentlemen, this does conclude today's program. Thank you.

Q4 2022 G1 Therapeutics Inc Earnings Call

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