G1 Therapeutics (NASDAQ:GTHX) has announced a significant increase in its fourth-quarter revenue for 2023, driven by a 29% rise in COSELA sales and a 19% uptick in vial volume.
The company provided a positive outlook for 2024, projecting net product sales to reach between $60 million and $70 million. With its clinical programs, G1 Therapeutics is aiming to become a leader in the treatment of triple-negative breast cancer (TNBC).
The firm expects critical data from their Phase 3 PRESERVE 2 trial in Q3 2024 and is optimistic about the potential of trilaciclib in improving survival rates for TNBC and small cell lung cancer patients.
Key Takeaways
- G1 Therapeutics reported a 45% increase in total revenue in Q4 2023 compared to the previous year, with COSELA sales reaching $13.9 million.
- Full-year 2023 revenue was $82.5 million, and the company forecasts COSELA revenue of $60-$70 million for 2024.
- Operating expenses saw a 35% reduction in 2023.
- Positive interim results from trilaciclib's Phase 2 trial in TNBC patients, with updated survival data expected midyear.
- The company is not currently facing any incremental headwinds from the platinum shortage regarding its 2024 guidance.
- G1 Therapeutics is considering a Phase 3 trial for an ADC combination, pending midyear results, and is open to collaborations.
- Adjustments to the sales force and investment in commercial activities are ongoing, with no updates on activities in China.
Company Outlook
- G1 Therapeutics provided net product sales guidance for 2024, expecting COSELA revenue to be in the range of $60 million to $70 million.
- The company is focused on achieving category leadership in TNBC and expects final results from the Phase 3 PRESERVE 2 trial in Q3 2024.
- A year-end cash balance of $50 million to $60 million is anticipated.
Bearish Highlights
- There were no specific bearish highlights discussed during the earnings call.
Bullish Highlights
- The company reported strong growth in COSELA revenue and vial volume.
- Trilaciclib has shown meaningful improvements in median overall survival in TNBC patients.
Misses
- No misses were reported during the earnings call.
Q&A Highlights
- The company does not anticipate any significant impact from the platinum shortage on their 2024 guidance.
- Costs associated with the launch for TNBC are included in the financial projections, but not for a potential Phase 3 ADC trial.
- G1 Therapeutics is considering adjustments to the sales force and continues to invest in commercial activities to optimize cost structure.
In summary, G1 Therapeutics (ticker: GTHX) is demonstrating solid financial performance and strategic focus on becoming a key player in the TNBC treatment market. With promising clinical trial results and a clear financial roadmap, the company is well-positioned for the upcoming year. The management team remains vigilant about market conditions, such as the platinum shortage, and is actively seeking collaboration opportunities to further its clinical programs.
InvestingPro Insights
G1 Therapeutics, with its ticker GTHX, has shown a robust performance in the last quarter of 2023, and the outlook for 2024 appears promising based on its revenue guidance. To provide a more nuanced perspective on the company's financial health and stock performance, here are some curated insights from InvestingPro:
InvestingPro Data:
- The company's market capitalization stands at $173.3 million, reflecting its size within the biotechnology sector.
- G1 Therapeutics has an impressive gross profit margin of 91.1% for the last twelve months as of Q3 2023, indicating strong control over its cost of goods sold and a solid business model in terms of its core operations.
- Despite the positive gross profit margin, the company's operating income margin for the same period was -78.94%, showing that it is currently not generating profit from its operations.
InvestingPro Tips:
- G1 Therapeutics holds more cash than debt on its balance sheet, which is a positive sign for investors concerned about the company's solvency and financial resilience.
- Analysts have recently revised their earnings downwards for the upcoming period, suggesting that investors should keep an eye on the company's future earnings projections and manage their expectations accordingly.
For a deeper dive into G1 Therapeutics' financials and to access additional insights, investors can explore InvestingPro, which offers a comprehensive set of tools and metrics. There are currently 13 more InvestingPro Tips available for GTHX at https://www.investing.com/pro/GTHX. Readers can also take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing even more valuable information to inform their investment decisions.
Full transcript - G1 Therapeutics Inc (GTHX) Q4 2023:
Operator: Good day, and thank you for standing by. Welcome to the G1 Therapeutics Fourth Quarter 2023 Financial Reference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Will Roberts, Corporate Communications. Please go ahead.
Will Roberts: Thank you, Rica. Good morning, everyone, and welcome to the G1 conference call to discuss our fourth quarter and full year 2023 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 2023 fourth quarter and full year, including an update on our clinical programs and our commercial progress in that period with COSELA, which is approved and commercially available to decrease the incidence of chemotherapy-induced myelosuppression in adult patients who were administered prior to a platinum etoposide containing regimen or topotecan containing regimen for extensive stage small cell lung cancer. As Rica commented, the Q&A session will follow the prepared remarks. 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. Such statements represent management's 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, February 28, 2024. 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 John Olmsted, our Chief Financial Officer. With that, I'll turn the call over to Jack.
Jack Bailey: Thanks, Will. Good morning, everyone, and thank you for joining us on the call today. From a commercial perspective, as you'll hear from John and Andrew, we experienced strong COSELA growth in the fourth quarter of 2023, including revenue and vial volume growth of 29% and 19%, respectively. Thanks to this progress and at which we expect in 2024, we have provided full year 2024 net product sales guidance of between $60 million and $70 million. That said, as we discussed the milestones we have achieved during the fourth quarter, it's essential we continue to look forward to and prepare for the opportunities ahead, namely that of category leadership in triple-negative breast cancer if we are successful in our clinical programs. First, as you'll hear from Raj, the final results from our ongoing Phase 3 PRESERVE 2 trial of trilaciclib in the metastatic setting are expected in the third quarter of this year. Given our statistical boundaries, if our trial is successful in generating results similar to that of our Phase 2 trial, they would be among the most important data generated in the first-line metastatic setting in both PDL-1 positive and negative tumors to date. Beyond that, the use of antibody drug conjugates, or ADCs, is appropriately becoming commonplace in the second line and later TNBC treatment settings in addition to other tumor types. We have shown promising benefits thus far in our ongoing Phase 2 trial when trilaciclib is combined with a TROP2 ADC, including improvements in tolerability and more recently, in initial overall survival. We expect updated results from that trial midyear. With these and other recent results, we believe that continued clinical success in these trials could position G1 for category leadership across the spectrum of TNBC, in addition to our work in extensive stage small cell lung cancer. Now on today's call, Andrew will cover our recent commercial results, Raj will provide an update on our clinical pipeline, including our progress toward final results with our Phase 3 RESERVE 2 trial. John will then discuss the financial results for the quarter as well as our 2024 guidance. Finally, I'll be back for some concluding comments. With that, I'll turn the call over to Andrew.
Andrew Perry: Thank you, Jack. I'm glad to be with you today to provide an update on our fourth quarter 2023 sales performance and the significant progress we've made in our commercial execution over recent months, having navigated a period of slower growth during the national platinum chemotherapy shortage last year. Our goal in Q4 was to restore the momentum we have built early in the year, which has been interrupted by supply disruptions of carboplatin and cisplatin during Q2 and Q3. We were able to achieve this goal and to continue to demonstrate a broader platform of deeply adopting customer organizations. Beginning with sales results, we ended the quarter with 19% overall vial volume growth compared with Q3 2023. All 3 of our sales regions generated double-digit volume growth in the fourth quarter. Focusing on the top 100 customer organizations, which represent around half the volume opportunity in the market, our growth was higher at 24% in the segment, and we added 2 new top 100 customers during Q4, meaning 75 of the top 100 of order COSELA launched today. The quarter, our efforts to grow in top 100s were supported by our new strategic accounts team were reflected with our latest real-world evidence data and are focused on creating systematic growth in our largest customers. And as a result, top 100 customers composed 58% of our total volume in the quarter. Community clinics and hospitals grew over 20% during Q4 and represented just over 80% of sales with the remainder being in academic centers. Our fastest-growing segment during the quarter was in customers covered by volume-based contract agreements. Contracted customers grew 28% during the quarter and made up around 1/3 of our overall volume. We continue to see a broader base of adoption with 55 new accounts and almost 30 customers ordering 100 or more vials in Q4. Our estimate of COSELA patient share continues to grow, and although claims data for Q4 are not fully available, we estimate patient share of over 13% in the first-line market, demonstrating that there remains significant opportunity for growth. 97% of our volume in the quarter was in commercial supply with 3% 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. Moving into Q1 2024. We have embedded our new strategic accounts capabilities. We continue to pursue new contract customer opportunities, and we've already seen our highest month ever for both volume and ex-factory sales in January, giving us confidence of continued growth going forward. I'll now pass the call over to Raj.
Raj Malik: Thanks, Andrew, and good morning, everyone. I'll start with a reminder of recent progress that our Phase 3 PRESERVE 2 reserve II trial in metastatic triple-negative breast cancer. Earlier this month, we announced that the independent data monitoring committee for the trial reviewed data from the interim analysis of overall survival and recommended that the trial continue to the final analysis, which would be conducted on the intent to treat or ITT (NYSE:ITT) population. Importantly, the DMC did not express any concerns with the trial. And as a reminder, G1 remains blinded to all data. We continue to be confident in the ability of trilaciclib to achieve a positive outcome for a variety of reasons. First, there is a greater likelihood of achieving a positive outcome at a final analysis at an interim because there are a larger number of events and a higher alpha allocation at the final analysis. This results in the ability to detect a larger critical hazard ratio at the final analysis compared to the interim. We discussed on the last call that the critical hazard ratio was 0.61 at the interim. And the final analysis, we'll be able to pick up a larger hazard ratio of 0.67. And of course, second, the strength of the data that precedes this trial provides additional confidence. We frequently described the Phase 2 trial in which we saw statistically significant improvements in median overall survival in patients receiving trilaciclib prior to gemcitabine carboplatin compared to those receiving chemotherapy alone. Importantly, the capital Kaplan-Meier survival curves of trial participants receiving trilaciclib, plus gemcitabine carboplatin continue to separate over time compared to participants receiving placebo prior to their chemotherapy, particularly for patients with PD-L1 negative tumors. The curve separation didn't occur until approximately 15 months. This is particularly relevant as the enrollment period for PRESERVE 2 from June 2021 until October 2022, and the interim analysis in February 2024 was conducted approximately 15 months after the last patient was enrolled. Therefore, the additional months of follow-up between the interim and final analysis could be important for the curves to continue to meaningfully separate. Equally compelling with the results that we presented in December last year at the San Antonio Breast Cancer Symposium regarding subsequent anticancer therapy use among patients that participated in the Phase 2 TNBC trial. Participants who receive trilaciclib with gemcitabine carboplatin and then receive subsequent anticancer therapy after trilaciclib discontinuation exhibited clinically meaningful improvements in overall survival with median of 32.7 months versus 12.8 months. These results were statistically significant with a p-value of 0.001. Further, median overall survival for patients who received trilaciclib was 14 months from the time they started their first subsequent therapy compared to 5.8 months for patients who did not receive prior trilaciclib. The p-value for this analysis was also 0.001. These results show that trilaciclib can provide benefits during the administration with chemotherapy in the short term, and additional benefits after trilaciclib discontinuation by improving long-term immune surveillance. Given that pembrolizumab achieved a hazard ratio of 0.89 in the ITT population in the KEYNOTE-355 trial, achieving our boundary hazard ratio of 0.67 would mark the biggest improvement in overall survival seen in first-line metastatic triple-negative breast cancer to-date. We look forward to the final results, which are estimated to be in the third quarter of this year. Regarding our Phase 2 trial of trilaciclib in combination with the TROP2 ADC sacituzumab govitecan. In January, we described promising initial efficacy results including meaningful improvements in median overall survival among patients receiving trilaciclib compared to historical results for the ADC alone. We expect to provide updated overall survival results midyear. Assuming the updated results remain strong, we anticipate continued partnership interest in developing trilaciclib with TROP2 ADCs that are in various stages of clinical development in TNBC and beyond. Additional clinical trials are ongoing, along with tracking real-world data to evaluate where the trilaciclib may also improve survival in extensive stage small cell lung cancer. The potential overall survival benefit is demonstrated would supplement the already known trilaciclib benefits of myeloprotection and reductions in hospitalizations and associated costs. These ongoing survival studies and analyses in small cell lung cancer include the post-marketing study of trilaciclib prior to topotecan in approximately 300 patients. The real-world evidence we continue to generate, the most recent cut of which was presented in October at the ASCO Quality Care Symposium and a Phase 2 investigator-initiated trial at UNC Lineberger in combination with lurbinectedin, which according to the study investigator continues to look promising from the perspective of both mono protection and tumor responses. However, our near-term clinical focus over the next 6 months to remain on advancing the science in triple-negative breast cancer as we deliver the TNBC ADC Phase 2 results midyear and the Phase 3 final results in the third quarter. With that, I'll turn the call over to John for the financial results.
John Umstead: Thanks, Raj, and good morning, everyone. As Will mentioned, full financial results for the fourth quarter and full year 2023 are available in this morning's press release and will be in the 10-K, which we expect to file at the market close. Net sales of COSELA grew 29% in the fourth quarter of 2023 to $13.9 million compared to 19% quarterly vial volume growth. This disparity is largely related to the timing of the sales. As mentioned on our November call, we recognized revenue upon delivery to distributors. We experienced an increase in patient vial demand towards the end of the third quarter of 2023, which was recognized as revenue in the fourth quarter in addition to that, which we recognized due to strong quarter-over-quarter growth. Our total revenue for the fourth quarter of 2023 grew 45% over the fourth quarter of 2022 to $14.9 million comprised of the $13.9 million I just described in net COSELA revenue and $1 million in license revenue. This compares favorably to the $10.3 million in total revenue, including $8.9 million in product revenue in the fourth quarter of 2022. Total revenues for the full year 2023 were $82.5 million, including a net revenue of $46.3 million and license revenue of $36.2 million. For the full year 2022, total revenues were $51.3 million, including net product revenue of $31.3 million. Cost of goods sold for the fourth quarter of 2023 was $1.3 million compared to $1 million for the same period in 2022. Cost of goods sold for the full year 2023 was $7.2 million compared to $3.7 million for the prior year. As we guided in November, our operating expenses of $122 million in 2023 were 35% lower than the $187.5 million in OpEx in 2022. Research and development expenses for the fourth quarter of 2023 were $7.4 million compared to $16.6 million for the same period in 2022. The decrease was primarily due to lower clinical program costs. R&D expenses for the full year 2023 were $43.7 million compared to $83.3 million for 2022. Our selling, general and administrative expenses for the fourth quarter of 2023 were $15.2 million compared to $23.6 million for the fourth quarter of 2022. The decrease in SG&A expenses was primarily due to decreases in personnel costs and medical affairs and further optimization of our commercialization activities. SG&A expenses for the full year 2023 were $71.1 million compared to $100.4 million for the prior year. Regarding our cash position, we ended the fourth quarter with cash, cash equivalents and marketable securities of $82.2 million compared to $145.1 million as of December 31, 2022. Finally, regarding revenue and cash runway guidance for the full year 2024. As Jack mentioned, we expect net COSELA revenue to be between $60 million and $70 million for 2024. There is no change to our 2024 gross to net expense percentage estimates. We expect the 2024 year-end cash, cash equivalents and marketable securities balance of between $50 million to $60 million. Additionally, we will continue to look for ways to optimize our cost structure in the near term with targeted headcount reductions outside of the commercial organization and identifying other potential efficiency improvements where appropriate. And based on the foregoing, we expect that our cash runway will take us into 2025. With that, I'll turn the call back over to Jack for some closing comments. Jack?
Jack Bailey: Thank you John, Raj, Andrew and Will. I also want to recognize the cancer community, we are thankful for the opportunity to be part of your journey. We are encouraged by the feedback we received daily from physicians who rely on COSELA to reduce the chemotherapy-related myelosuppressive side effects in their patients with extensive stage small cell lung cancer and by the demand trajectory in Q4 2023 and the beginning of Q1 2024. And while we have a strong commercial team driving COSELA penetration and demand and a clear path to profitability in this first indication, our focus is also on generating the clinical results required for TNBC category leadership. To that end, as you've heard today, we have important updated survival results from our Phase 2 study in combination with the TROP2 ADC expected midyear and final results from our ongoing Phase 3 trial in first-line metastatic triple-negative cancer expected in the third quarter of 2024. Thank you for your time this morning. We will speak again in this format on the first quarter of 2024 call in May and see many of you at the spring investor meetings. With that, I'll turn it over to Q&A. Operator, would you please remind our listeners, how to ask question.
Operator: [Operator Instructions] Our first question comes from the line of Joseph Thome of TD Cowen. Your line is now open.
Joseph Thome: Hi there. Good morning. Thank you for taking my question. Maybe just overall, I mean, initially, the frontline TNBC data were delayed from sort of your very initial expectations, which I guess, kind of suggests that the event rate is maybe occurring a little bit slower than initially anticipated, and hopefully, some of that is due to the addition of COSELA. But when you think about the comparator arm, I guess, is there anything over the past several years, in particular, that would have extended overall survival for the comparator? And what is sort of a good comparator for what the - that arm should do 355 the best. Obviously, we saw your Phase 2 data, but that includes a few patients in later lines. And then second, on the commercial side, the 13% penetration in frontline seems really strong. I guess, how high do you think penetration can go on the front line? And are these the same - are these accounts that have the most experience with COSELA? Do they start later line and go forward or kind of who's using it in the front line? Thank you.
Jack Bailey: Thanks, Joe. Why don't we have Raj take the first one, and then we'll have Andrew answer the second. Raj?
Raj Malik: Yes. Joe, yes, I mean, in terms of comparator, we still think that the KEYNOTE-355 gem/carbo arm is a reasonable 1 because there aren't really any other data beyond that. I mean, it's the most contemporary data we have. I mean, in terms of things that could potentially be confounding. The 1 change, of course, even since then is there's likely greater ADC use, particularly in later lines of therapy. But in a blinded trial, we would expect that, that would be relatively balanced between the 2 arms. And so we would expect that trial based on the prior data in terms of benefiting patients even with subsequent therapies will continue to show benefit when added to - or rather than the ADC is given after trial.
Jack Bailey: Andrew?
Andrew Perry: Thanks, Bill. So yes, thank you. The 13% in first line. So obviously, over 90% of our use is in that first line setting. And we're talking about an overall market here accessible to COSELA, which we estimate at over $700 million in potential gross revenue, so a very, very significant market opportunity for us. We've seen that market share go up very consistently even through that platinum shortage, and our market share continues to grow. There were just fewer patients taking eligible chemotherapies, which makes sense. So we're very ambitious for what we can continue to add and that market share going forward. And frankly, I won't be satisfied until every eligible patient of COSELA.
Joseph Thome: Perfect. Thank you very much.
Operator: [Operator Instructions] Our next question comes from the line of Gil Blum of Needham Company. Your line is now open.
Gil Blum: Good morning, and thanks for taking our question. Just a clarifying question. Did the IDMC look at the interim data, did decrement have a remit to discontinue the study for futility.
Raj Malik: Gil, so the interim analysis was an efficacy 1 only. Obviously, if they saw the data, they could, of course, do additional analyses at their discretion. But the only analysis that was sort of specified was 1 for efficacy.
Gil Blum: Okay. And maybe looking towards mid '24 for the ADC results, just set our expectations of what we could potentially see there? Thank you.
Raj Malik: Yes. So obviously, what we're interested in seeing is we presented the early cut at the JPM. And so we'll be looking to see how the data continue to track versus that. And if you recall, the - at 12 months, we had about a 20% improvement. Clearly, the rest of the curve could change, but we're looking to see how much improved the survival is relative to historical data and then make decisions on further development likely in a partnership scenario.
Operator: Our next question comes from the line of Anupam Rama of JPMorgan. Your line is now open.
Priyanka Grover: This is Priyanka on for Anupam. We just have a quick question. how much of the incremental headwind via the platinum shortage is assumed in the 2024 guidance for COSELA? Thank you.
Jack Bailey: So Priyanka, can you repeat the question, please?.
Priyanka Grover: Yes, sure. So how much of the incremental headwind via the platinum shortage is assumed in the 2024 guidance for COSELA?
Jack Bailey: Yes. We don't assume if you're inflating any carryforward. We don't assume any. Given the limited duration therapy of these patients along with, unfortunately, the diagnosis to exploration that you tend to see with these - this very aggressive cancer. We don't see that any of this sort of pushes patients into 2024. What we are doing is certainly monitoring the FDA website to make sure that it doesn't - we don't see a repeat in '24, what we saw in '23. And certainly, at the clinic level, what we've heard from really late Q3 is that customers are not having issue, being able to access any of the carbo or cisplatinum.
Priyanka Grover: Understood. Thank you so much.
Operator: Our next question comes from the line of Laura Prendergast of Raymond James. Your line is now open.
Laura Prendergast: Hi, guys. Thanks for taking the question. I was wondering if you could elaborate a bit on CDC midyear, this ADC combo data still continuing to look strong on the timing of when you expect to initiate a randomized trial. And then additionally, on your cash runway, does that include baked in launch costs were preserved to if the final analysis is successful and the Phase 3 for the ADC combination?
Jack Bailey: So I'll have John pick the last 1 and then we can flip over to Raj.
John Umstead: Yes. For the cash runway part, from a TNBC launch cost, we do have those inclusive of it. Obviously, with the delay to interim, those costs get pushed out but we do have them baked in, in our runway. You mentioned, I believe, an ADC Phase 3 randomized trial. We do not have that in there. I think as Raj mentioned, we want to see our midyear results, and then hopefully have the ability to partner with some type of collaboration potentially where we would look at a Phase 3 trial.
Raj Malik: No, I was going to just - I think John covered it, unless you have an additional question.
Laura Prendergast: No, that's all for me. Thank you.
Raj Malik: Thank you, Laura.
Operator: [Operator Instructions] Our next question comes from the line of Ed White of H.C. Wainright. Your line is now open.
Unidentified Analyst: Hi, guys. Thanks for taking our question. This is Steve on for Ed. First question, do you think the sales force is rightsized now? Or would you need additional investments? And if so, how should we think about SG&A for next year or this year?
Jack Bailey: Why don't we go first with Andrew on the sales force and then John can touch on the SG&A going this year.
Andrew Perry: Yes. Thanks, Steve. We continue to make tweaks to our, I would say, our commercial footprint in the field. And 1 example is our new strategic accounts team that we deployed in Q4 and into Q1, and we've been delighted about the progress they've made so far. We think our commercial footprint in terms of sales professionals right now is about right. I think as we move forward into market expansion into new indications, we would reevaluate that. But I don't see it being like a real phase shift I see it being an evolution of the team that we have.
Jack Bailey: And from a SG&A cost - Steve from an SG&A cost perspective, I think you had asked about that. I mean, we continue to invest in commercial as we always have. As I mentioned earlier, we do continue to see efficiencies in optimizing that cost structure on the commercial front but we continue to invest in it.
Unidentified Analyst: Okay. And then is there any update on [indiscernible] in China?
Jack Bailey: No. I mean they obviously are continuing to sell COSELA for the initial indication in small cell there also, and there also running their own studies, and they've been a wonderful partner to us continue to be to that to this day. So no updates beyond that.
Unidentified Analyst: All right. Thank you.
Operator: I am showing no further questions at this time. I would now like to turn it back to Jack Bailey, Chief Executive Officer, for closing remarks.
Jack Bailey: Thank you, operator. As always, I look forward to keeping everyone updated on our progress going forward. Thank you for joining us today, and we'll be in touch. Thank you.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
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