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G1 Therapeutics, Inc. (GTHX) Q1 2019 Earnings Call Transcript

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G1 Therapeutics, Inc. (NASDAQ: GTHX)
Q1 2019 Earnings Call
May 9, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and welcome to G1 first quarter 2019 corporate and financial update conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instruction will follow at that time. If anyone should require assistance during the conference, please press * then 0 on your touch-tone telephone. As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Mr. Jeff Macdonald, Head of Investor Relations. The floor is yours.

Jeff Macdonald -- Head of Investor Relations

Thank you, Operator. Good afternoon, everyone. Welcome to the G1 Therapeutics first quarter 2019 update. Joining me are Mark Velleca, Chief Executive Officer and Raj Malik, Chief Medical Officer and Senior Vice President, R&D. I am also pleased to introduce Jen Moses, our Chief Financial Officer. John Demaree, our Chief Commercial Officer, will be available during the Q&A session.

Before we begin, I would like to remind you that today's call will include forward-looking statements based on current expectations. Such statements represent management's judgement as of today and may involve risks and uncertainties that could cause actual results to differ materially from expected results. Please refer to our filings with the SEC, which are available from the SEC or on our corporate website. For information concerning risk factors that may affect this company.

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I'll now turn the call over to Mark.

Mark Velleca -- Chief Executive Officer

Thanks, Jeff. Good afternoon, everyone. Thank you for joining us today. G1 is at an important inflection point in our transition from an early stage clinical development company to a pre-commercial biotech preparing for potential approval and launch of our first product candidate, trilaciclib and advancing two others lerociclin and G1T48. Later in the call, Raj will provide a detailed update on trilaciclib and specifically the regulatory pathway to approval as we plan to file an NDA and MAA for myelopreservation in small cell lung cancer in 2020. We expect these will be the first of multiple such filings per this important agent.

First, I would like to focus on the overall value proposition that our company represents to investors and outline what we think is an opportunity to build substantial value in the near and long-term. Trilaciclib sits in a unique place in the oncology landscape. It is not an anti-tumor therapy measured by the usual oncology endpoints of survival or PFS nor is it a traditional reactive supportive care intervention.

Trilaciclib is a first in class myelopreservation agent that protects the bone marrow from damage by chemotherapy. Based on our market research with oncologists and payers, we believe that trilaciclib will provide an opportunity to proactively protect patients from some of the most dangerous side effects of chemotherapy, keeping patients healthier both during and after cytotoxic treatments.

The treatment of cancer has seen significant strides in the past decade, including targeted therapies and immuno-oncology products. What we sometimes forget is that despite these advances, the gold standard treatment for many cancers still involves chemotherapy. We believe that will be the case into the foreseeable future.

Every day, thousands of patients receive lifesaving and life extending chemotherapy. However, chemotherapy does not differentiate between healthy cells and cancer cells, killing both, including important stem cells in the bone marrow that produce white blood cells, red blood cells, and platelets. This chemotherapy-induced bone marrow damage is known as myelosuppression. When white cells, red cells, and platelets become depleted, chemotherapy patients are at an increased risk of infection, experience anemia and fatigue, and are at an increased risk of bleeding.

Myelosuppression can impair a patient's ability to complete the full course of treatment on schedule and often requires the administration of rescue interventions, such as growth factors and blood transfusions. Moreover, chemotherapy-induced bone barrow damage can be long-lasting, and patients may have compromised bone marrow function for many years.

Trilaciclib has the potential to make chemotherapy safer, reducing side effects and improving the patient experience. If approved, our market research tells us that physicians will want to use trilaciclib to protect their patients. Thus far, feedback from regulatory authorities and payers also indicates that they do appreciate the value trilaciclib brings to patients in the healthcare system.

In some settings such as metastatic triple negative breast cancer, where chemotherapy is given until disease progression, there may also be anti-tumor efficacy benefits of adding trilaciclib. We continue to explore those potential tumor efficacy benefits as we move forward aggressively to develop trilaciclib as a myelopreservation agent.

Let's turn to our other investigation therapies, lerociclib and G1T48 and the updates that we expect to provide in the second half of this year. For lerociclib, we plan to present new data on both of our ongoing combination trials. We believe that identifying a dose that reduces the need for neutropenia monitoring would be an important differentiating feature compared to current CDK4/6 inhibitors on the market.

We expect to present updated Phase 1b data on lerociclib on ER+ breast cancer in the fourth quarter. In addition, we plan to report preliminary safety and tolerability from our Phase 1 trial of lerociclib in combination with Tagrisso in non-small cell lung cancer.

Moving to an update on G1T48, emerging clinical data is increasing our excitement about this program. As a reminder, G1T48 is our oral selective estrogen receptor degrader or CERD for patients with ER+ HER2- breast cancer. G1T48 is continuing through an open label Phase 1 dose escalation trial and based on encouraging preliminary results, we have accelerated our development activities and expect to present data in the third quarter, ahead of our previous projection of reporting data in the fourth quarter.

Fulvestrant, the only CERD currently available to patients validates this approach to treating ER+ breast cancer, either as monotherapy or in combination with CDK4/6 inhibitors. While fulvestrant has shown clinical efficacy, its intramuscular administrations are painful and limit patient compliance.

An orally available well-tolerated CERD has the potential to overcome those limitations and advance into earlier lines of treatments as either monotherapy or in combination. If early safety and efficacy data continue to show promise, G1T48 will become a far more important and valuable component of the G1 pipeline.

Overall, we believe G1 offers a compelling value proposition to investors. We are a well-financed enterprise with three clinical stage drug candidates, all of which have meaningful near-term regulatory and clinical milestones address very large markets and are attractive to partners either individually or collectively.

With that broad overview, I'll turn the call over to Raj to discuss our recent regulatory update on trilaciclib and provide a snapshot for the plans to broaden the use of trilaciclib to multiple tumor types and chemotherapy regimens. Raj?

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

Thanks, Mark. Our meetings with the FDA and European regulatory authorities have been very collaborative and we were pleased that they recognized the potential benefits that trilaciclib provides to improve the chemotherapy experience for patients. In April, we received written minutes for our end of Phase 2 meeting with the FDA. The minutes confirmed our takeaways from the meeting and indicated that our existing data on trilaciclib would support a filing for myelopreservation in small cell lung cancer.

We also met with several European health authorities earlier in the year and their feedback was consistent with that of the FDA. Our next step is to have a pre-NDA meeting, which is a standard part of the regulatory process in the US. I would put the objectives of this meeting into two main categories.

First, it is used as a means to align on the content of the NDA, including integrated analyses of the clinical data. Because our trials involve multiple myelopreservation endpoints across three trials that have different patient populations and chemotherapy regimens, the integrated analyses are a bit different than a typical oncology Phase 3 trial that has a single endpoint such as OS or PFS. We have all the data we need for these analyses. This meeting is an opportunity to receive FDA feedback and alignment on how the agency would like to see the data in the filing.

Second, we will discuss label expansion studies so we can refine our development plan to expand trilaciclib's use beyond small cell lung cancer. We'll need subsequent meetings to finalize trial designs and endpoints and this is an important part of the process.

With regard to our filing in Europe, there are some differences in the requirements from the US submission, but much of the work for the NDA is relevant to the MAA submission. We are working on the two filings in parallel and will be requesting a pre-MAA meeting with the European Medicines Agency following our pre-NDA meeting with the FDA. We anticipate submitting an MAA after we submit our NDA.

As I mentioned earlier, we were meeting with regulators to further discuss clinical development of trilaciclib in multiple tumor types and chemotherapy regimens. Our objective in these trials is to look at broadly used chemotherapy agents in order to expand our indication beyond small cell lung cancer and to do so in the most efficient manner possible.

Our initial targets are likely to be evaluating trilaciclib's myelopreservation benefits when used with fluoropyrimidine-based regimens in colorectal cancer and taxane-based regimens in breast cancer. These two classes are chemotherapy are used broadly in multiple tumor types and are classes where we do not yet have data on trilaciclib. We anticipate starting these trials in 2020.

In summary, having achieved an important milestone in the regulatory process, we are excited about our path forward in both small cell lung cancer and additional indications and will provide further updates on our regulatory progress following our pre-NDA meeting.

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

Mark Velleca -- Chief Executive Officer

Thanks, Raj. I'm pleased to have the opportunity to introduce our new Chief Financial Officer Jen Moses. As you saw in today's press release, former CFO and SVP of Corporate Development Buck Philips departed the company to pursue other interests. We want to thank Buck for his contributions and wish him the best in his future endeavors. We are confident that the CFO transition will be seamless. Jen has played an integral leadership role at G1 in the finance group for more than seven years, first as a consultant and the last four years as Vice President of Finance.

Since joining the company full-time in 2015, among her other accomplishments, Jen played a clinical role in our IPO and subsequent financing, spearheaded the implementation of numerous financial controls and systems that are required by publicly traded companies and has built out the finance team that has done a phenomenal job supporting our entire organization. Jen will be joining the team at investor conferences and meetings in the coming weeks when we will provide updates on the clinical, operational, and financial plan for G1.

Partnerships remain a significant part of our company strategy as we move forward with regulatory, commercial, and label expansion activities for trilaciclib as well as further development of lerociclib and G1T48. We are leveraging internal and external resources to continue to advance our business development discussions and this remains a high priority for the company.

I would now like to turn the call over to Jen to summarize the first quarter financials. Jen?

Jennifer Moses -- Chief Financial Officer

Thanks for the introduction, Mark. It's great to be on the call today. This is an exciting time at G1. I look forward to continuing to work with you, Raj, and the entire G1 team as we deliver results and build value. Now, I'd like to provide a summary of the first quarter results. Full results are available in our press release and 10-Q.

We reported a net loss of $24 million for the first quarter of 2019 compared to $20.4 million for the first quarter of 2018. Operating expenses were $25.9 million for the first quarter of 2019 compared to $20.7 million for the prior period. Operating expenses include non-cash stock compensation expense of $3.8 million for the first quarter of 2019 compared to $1.6 million for the prior year period.

Research and development expenses for the first quarter of 2019 were $18.1 million compared to $17.3 million in the first quarter of 2018. The increase in expense was primarily due to an increase in clinical program costs and personnel-related costs due to additional headcount.

General and administrative expenses for the first quarter of 2019 were $7.8 million compared to $3.4 million for the prior year period. The increase in G&A expense was largely due to an increase in headcount, an increase in pre-commercialization activities, and an increase in professional fees and other administrative costs necessary to support our operations as a public company.

As of March 31st, 2019, we had $347.8 million in cash and cash equivalents on the balance sheet compared to $369.3 million as of December 31st, 2018. With regard to cash burn, we are reiterating our guidance of ending the second quarter with a cash balance of $315 million to $325 million.

We are updating our operating plans based on positive regulatory news on trilaciclib and encouraging early data on G1T48 and will provide full year 2019 cash burn guidance by the end of the second quarter. I'll now turn the call back over to Mark.

Mark Velleca -- Chief Executive Officer

Thanks, Jen. As a quick summary before we go to Q&A, our team is focused on preparing US and European regulatory submissions for trilaciclib with an anticipated initial indication of myelopreservation in small cell lung cancer. Our discussions with regulators have indicated that our existing data is sufficient to support filings and we do not anticipate running additional trials in small cell lung cancer. We plan to submit our NDA in 2020 following our pre-NDA meeting with the FDA later this year.

We believe that trilaciclib has the potential to benefit patients across multiple tumor types and chemotherapy regimens and are planning a robust clinical program to quickly expand the indication beyond small cell lung cancer. We plan to begin those trials in 2020 after we have received input from regulatory authorities.

We anticipate our first trials will evaluate the myelopreservation benefits of trilaciclib for patients receiving fluoropyrimidines and taxanes, two classes of chemotherapy used broadly in a number of tumor types. These chemotherapy classes are used to treat a much larger number of patients than the initial small cell lung cancer indication.

For lerociclib, we plan to present additional data on both of our ongoing combination trials later this year. Finally, we expect to present the first clinical data for G1T48 in the third quarter. We have observed promising early results in our ongoing trial in ER+ breast cancer and look forward to sharing those data. That concludes our prepared remarks.

Operator, please open the call for questions.

Questions and Answers:

Operator

Ladies and gentlemen, if you have a question at this time, please press * then the number 1 on your touch-tone telephone. Please limit your question into one and one follow-up question. If your question has been answered or you wish to remove yourself from the queue, please press the # key.

Your first question comes from the line of Dane Leone from Raymond James. Dane, you are now live.

Dane Leone -- Raymond James -- Analyst

Thank you very much. Congratulions on the update. Thanks for taking some questions for us. I guess the first one from me, it's been a conversation with the investment community since you updated all of us in terms of the end of Phase 2 meeting with trilaciclib -- a lot of us have been burned over the years by companies that have walked out of end of Phase 2 meetings with minutes that have suggested certain things regarding the future of a clinical program.

It sounds like you guys are extremely confident that you won't have to run more studies and that this will be the filing data package. I guess beyond the generalization of the minutes in themselves, is there something -- what for you out of those minutes made it very definitive that you would not be required to provide any more data? Just being ahead of actually having the pre-IND meeting.

Mark Velleca -- Chief Executive Officer

Raj? I'll let Raj respond.

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

So, I think two things, Dane -- one, the topic of additional studies did not come up in the meeting itself and is not reflected in the minutes. The second is the minutes clearly state that the pre-NDA is the next step toward filing. So, we feel very confident in that.

Dane Leone -- Raymond James -- Analyst

Okay. So, in the minutes, just stating the next step for everyone would be pre-NDAs and the takeaway is definitive that you wouldn't need any additional stuff for the data package.

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

Yes.

Dane Leone -- Raymond James -- Analyst

Okay. And then, I guess, the surprise on this call is moving up the presentation of the oral SERD program. It sounds like the team is quite excited by the data that you've seen to date. I guess like the first question is why move that presentation. I think a lot of us were expecting it to come out at SABCS, which is usually a good venue for it. Is there some trigger that once you have that data out there that you'll move into other studies or do something else that benefits you presenting that data earlier?

Mark Velleca -- Chief Executive Officer

Yes. I think when you have an agent that is showing promise in early stage trials, you certainly do want to get the data out there as we think about additional trials that we expect to initiate in 2020.

Dane Leone -- Raymond James -- Analyst

Those would be presumably combination studies?

Mark Velleca -- Chief Executive Officer

We are, as reflected in our previous presentations, both monotherapy and potential combination studies.

Dane Leone -- Raymond James -- Analyst

Great. I'll jump back in the queue. Thank you.

Operator

Your next question comes from the line of Chris Shibutani from Cowen and Company. Chris, you are now live.

CJ -- Cowen and Company -- Analyst

Hi, everybody. This is CJ on for Chris. So, interesting to hear about G1T48. I'm curious if you think it's going to be a proof of concept-type data. It must be pretty convincing for you. Can you give us a sense of the size of the data we'll be seeing, the duration of follow-up?

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

Yeah. So, to remind you, this is a first in human study, dose escalation, three plus three design. We will present preliminary safety and efficacy results. So, we expect to have a data set of approximately 30 patients at a medical meeting in the third quarter.

CJ -- Cowen and Company -- Analyst

And then in terms of the next steps, you mentioned acceleration, would these next trials potentially be registrational? In terms of the combination, are you still committed to lerociclib or are there other agents that could potentially accelerate even further?

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

We'll certainly present details of those studies as we present the data itself. But as Mark mentioned before and as we mentioned previously, we are considering developing G1T48 both as a monotherapy and in combination with 4/6 inhibitors because that makes sense. There's proof of concept of that as well.

CJ -- Cowen and Company -- Analyst

So, that might include things beyond lerociclib in terms of the CDK4/6 class?

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

Yes.

CJ -- Cowen and Company -- Analyst

Okay. Thank you.

Operator

Again, if you have a question at this time, please press * then the number 1 key on your touch-tone telephone. Please limit your question into one and one follow-up question. If your question has been answered or you wish to remove yourself from the queue, please press the # key. Your next question comes from the line of Anupam Rama from JP Morgan. Anupam, you are now live.

Matt -- JP Morgan -- Analyst

Thanks for taking our question, guys, and congrats on all the progress. This is Matt on for Anupam. Just one from us and it relates to the additional data that you'll be presenting from the trilaciclib Phase 2 trials. Can you give us any more color on the disclosure strategies here? Are you thinking of doing a press release? Are you targeting certain medical conferences? Thanks so much.

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

Yeah. This is actually public. We are presenting the second third-line study with trilaciclib. It's an oral presentation at ASCO. An update on the Tecentriq study will be in the third quarter, we are expecting, and the TNBC study in the fourth quarter.

Matt -- JP Morgan -- Analyst

Okay. Great. Then maybe just a quick follow-up, if that's all right -- Jen, it sounds like you'll be giving more formal remarks on spend guidance in the near-term, but for now, can you orient us at a high level how you're thinking about that, kind of as you guys head into pre-commercialization? Thanks so much.

Jennifer Moses -- Chief Financial Officer

Sure. We are fortunate to have a strong balance sheet and runway through multiple expected development and regulatory milestones. We have no immediate plans to raise capital at this time, but as always, we will be opportunistic and pursue options that are in the best interest of our shareholders.

Matt -- JP Morgan -- Analyst

Great. Appreciate the color.

Operator

Your next question comes from the line of Chad Messer from Needham. Chad, you are now live.

Chad Messer -- Needham & Company -- Analyst

Thanks for taking my question and good evening. Let me start by congratulating Jen on her new role and giving my best wishes to Buck. Since it's the one thing of interest that didn't get asked, I wonder if you could set the stage a little bit more on the extent of data we should expect from the lerociclib updates that are coming up, the two combo trials.

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

Yeah. So, the fulvestrant, or the Faslodex combination study we expect to present. Also, in the fourth quarter will be data through the dose escalation portion of the study. We'll, of course, include safety, tumor efficacy data as well. Then on the Tagrisso combination study, we are still in the first part of that study, which is dose escalation. So, those data, which we expect to present in the third quarter, will really be safety, our ability as well as early tumor efficacy, really response rate data.

Chad Messer -- Needham & Company -- Analyst

Great. Thanks. Sounds like we've got a lot to look forward to throughout the year.

Operator

Your next question comes from the line of Harshita from B. Riley. Harshita, you are now live.

Harshita Polishetty -- B. Riley FBR -- Analyst

Good afternoon, everyone. Quick one from me following up on Chad's question here -- for lerociclib in lung with the Phase 1b expected next quarter, could you please remind us of the rationale for the combination of Tagrisso plus lerociclib in EGFR lung? You did touch on this at your analyst day, where you mentioned it could prolong the time to assistance, but could you remind us if this is regard to something specific about the EGFR+ status? It seems that none of the other CDKs have comfortable efforts in non-small cell. So, I'm just curious about that. Thank you.

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

Yeah. Hi, Harshita. So, there's actually a lot of data that we've generated and is sort of consistent with this concept of combining a 4/6 inhibitor with another signaling pathway inhibitor because many of these other growth-signaling pathways impinge on the cell cycle. So, a combination with a CDK4/6 inhibitor plus another pathway inhibitor similar to breast cancer makes sense. Again, that is the rationale for the combination.

The second piece is data from the fluora study, which was the first line Taagrisso study, there was some cell-free DNA data that was reported looking at mechanisms of resistance. Many of these mechanisms of resistance are actually bypass pathways, such as activation of MET or activation of the PI 3-kinase pathway, rather than actual mutations in the receptor itself with the Tagrisso. So, we feel therefore combining a 4/6 inhibitor like lerociclib with Tagrisso makes sense to extend the time to resistance.

Harshita Polishetty -- B. Riley FBR -- Analyst

Great. That's helpful. Thank you so much and congrats on the quarter.

Operator

I am showing no further questions at this time. I would now like to turn the conference back to Dr. Velleca.

Mark Velleca -- Chief Executive Officer

Thank you, Operator. That concludes the call. Please reach out to us with any questions. As a reminder, we will be presenting at the UBS investor conference on May 21st. We look forward to seeing many of you there and at the upcoming ASCO meeting. Thank you for joining us and have a great evening.

Operator

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

Duration: 30 minutes

Call participants:

Jeff Macdonald -- Head of Investor Relations

Mark Velleca -- Chief Executive Officer

Jennifer Moses -- Chief Financial Officer

Raj Malik -- Chief Medical Officer and Senior Vice President of R&D

Dane Leone -- Raymond James -- Analyst

CJ -- Cowen and Company -- Analyst

Anupam Rama -- JP Morgan -- Analyst

Chad Messer -- Needham & Company -- Analyst

Harshita Polishetty -- B. Riley FBR -- Analyst

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