Q4 2023 G1 Therapeutics Inc Earnings Call
Participants
Andrew Perry; Chief Commercial Officer; G1 Therapeutics Inc
Rajesh Malik; Member of the Management Board, Chief Medical Officer; G1 Therapeutics Inc
John V; Chief Financial Officer; G1 Therapeutics Inc
Joseph Thome; Analyst; TD Cowen
Gil Blum; Analyst; Needham & Company LLC
Laura Prendergast; Analyst; Raymond James & Associates Inc
Presentation
Operator
Good day, and thank you for standing by, and welcome to the G1 Therapeutics Fourth Quarter 2023 financial results conference 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.
Thank you, Rebecca, and good morning, everyone, and welcome to the G1 conference call to discuss our fourth quarter and full year 2020 2023 financial results and business update. Press release on these financial results was issued this morning and can be found in the News section of our corporate website, human therapeutics.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 Q-Cells, which approved and commercially available to decrease the incidence of chemotherapy-induced myelosuppression in adult patients when administered prior to a platinum etoposide containing regimen or topotecan containing regimen for extensive-stage small cell lung cancer has recommended a 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 actual results to differ materially from those expressed in or implied by these statements.
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 upset, our Chief Financial Officer.
With that, I'll turn the call over to Jack.
Thanks, Will, and 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 solid growth in the fourth quarter of 2023, including revenue and vial volume growth of 29% and 19%, respectively, thanks to this progress from that, 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 discuss 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 three preserved two trial of trila cyclin in the metastatic setting are expected in the third quarter of this year. Given our statistical boundaries, our trial is successful in generating results. Similar to that of our Phase two trial, it would be among the most important data generated in the first-line metastatic setting in both PD-L1 positive and negative tumors to date.
Beyond that, the use of antibody drug conjugates or ADCs is appropriately becoming common place 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 two trial for trila cycle that is combined with a Trop-2 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 G. one for category leadership across the spectrum of TNBC in addition to our work in extensive-stage small cell lung cancer.
On today's call, Andrew will cover our recent commercial results. Roger will provide an update on our clinical pipeline, including our progress toward final results with our Phase three preserve trial. John will then discuss financial results for the quarter as well as our 2024 guidance.
Finally, I'll be back with some concluding comments. With that, I'll turn the call over to Andrew.
Andrew Perry
Thank you, Jack and Bob today, ready today to provide an update on our Q4 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.
It was to restore the momentum we have built early in the year, but have been interrupted by supply disruptions of carboplatin and test plots. And during Q2, Q2 and Q3, we were able to achieve this goal and to continue to demonstrate a broader platform of deeply adopting customer organizations.
Getting the sales results, we ended the quarter with 19% overall, while volume growth compared with Q3 2023, all three 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 two new top 100 customers during Q4, meaning 75 of the top 100 about, of course, our launch today quarter, our efforts to grow and top one hundreds were supported by our new strategic accounts team for reflects with our latest real-world evidence data and our focus on creating system asset 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 a third 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 course, our 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 for 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.
Rajesh Malik
Thanks, Andrew, and good morning, everyone. I'll start with a reminder of recent progress that our Phase three preserved 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 will be conducted on the intent to treat or 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 and an interim because there are 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 will be able to pick up a larger hazard ratio of 0.67.
And of course, second, the strength of the data that precedes which this trial provides additional confidence we frequently will frequently describe the Phase two trial in which we saw statistically significant improvements in median overall survival in patients receiving Telesites prior to gemcitabine carboplatin compared to those receiving chemotherapy alone.
Importantly, the capital Meier survival curves of trial participants receiving valacyclovir 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 for curve separation didn't occur until approximately 15 months.
This is particularly relevant as the enrollment period being preserved to us 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 analyses could be important for the curve to continue to meaningfully separate. Equally compelling were the results that we presented in December last year at the San Antonio Breast Cancer Symposium regarding subsequent anti-cancer therapy used for lung patients that participated in the Phase two TNBC trial participants who received valacyclovir gemcitabine carboplatin and then received subsequent anti-cancer therapy after 12 weeks after discontinuation exhibited cynically meaningful improvements in overall survival with medians of 30 to 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 trial sites.
And the p-value for this analysis was also 0.001. These results show that trial a site that can provide benefits during the administration with chemotherapy in the short term and additional benefits after trial ascites or discontinuation by improving long-term immune surveillance.
Given that pembrolizumab achieved a hazard ratio of 0.89 in the ITT population in the KEYNOTE three five five 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 two trial of valacyclovir in combination with the Trop two ADC sacituzumab govitecan. In January, we described promising initial efficacy results, including meaningful improvements in median overall survival among patients receiving premium Pharmacyclics compared to historical results for the ADC alone, we expect to provide updated overall survival results mid-year.
Assuming the updated results remain strong, we anticipate continued partnership interest in developing trilaciclib with Trop-2 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 whether trila slightly and they also improves survival in extensive stage small cell lung cancer.
The potential overall survival benefit is demonstrated with supplement. The already known trial cited benefits of Milo protection and reductions in hospitalizations and associated costs. These ongoing survival studies and analyses and small cell lung cancer include post-marketing study of qualified third party topotecan in approximately 300 patients.
The real-world evidence we continue to generate the most recent of which was presented in October at the Asco quality care symposium and a Phase two investigator initiated trial at UNC line burger from combination of lurbinectedin which according to the study, investigator continues to look promising from the perspective of both model protection and tumor responses.
However, to a neutral of local focus for the next six months remain on advancing the science in triple-negative breast cancer as we deliver the TMBCADC. Phase two results midyear and the Phase three final results in the third quarter.
With that, I'll turn the call over to John for the financial results.
John V
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 after market close.
Net sales of solid grew 29% in the fourth quarter of 2023 to $13.9 million compared to 19% quarterly volume growth. This disparity is largely related to the timing of the sales. As mentioned on our November call, we recognize revenue upon delivery to distributors. We experienced an increase in patient valve 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 casino 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 or $82.5 million, including to sell 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 or 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 to seller revenue to be between $60 million to $70 million for 2024.
There's 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.
If you John Rush, Andrew, and we'll 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 receive daily from physicians who rely and co-sell to reduce the chemotherapy related myelosuppressive side effects and 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 co-selling 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 for that. And as you've heard today, we have important updated survival results from our Phase two study in combination with the Trop-2 ADC expected midyear and final results from our ongoing Phase three trial in first-line metastatic triple-negative cancer are 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 your questions.
Question and Answer Session
Operator
(Operator Instructions)
Joseph Thome, TD Cowen.
Joseph Thome
Good morning. Thank you for taking my question. Maybe just just overall, I mean, initially the front-line 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 Kadcyla. But what do you think about the comparator arm? I guess, is there anything over the past several years in particular that would have no extended overall survival for the comparator.
And what is sort of a good comparator for what the that Army should do is three, five, five, the best obviously based on your Phase two data, but that includes a few patients in later lines.
And then second, on the commercial side from that 13% penetration in frontline seems seems really strong. I guess how high do you think penetration can go in the frontline? And are these the same or these accounts that have the most experience with because that letter they start later line and go forward or kind of who's using it in the frontline? Thank you.
Thanks, Joe. What we have projects the first one, and then we'll have Andrew answer the second rush.
Andrew Perry
Yes, hey, Joe. Yes, I mean, in terms of comparator, we still think that the KEYNOTE three five, five gem carbo arm is a reasonable one because there aren't really any other data beyond that. I mean, it's the most contemporary data we have seen, I mean, in terms of on things that could potentially be confounding. The one change of course, even since then is likely greater ADC used, particularly in later lines of therapy.
But in a blinded trial, we would expect that that would be relatively balanced between the two arms on. And so we would expect that trial are based on the prior data in terms of benefiting patients, even with subsequent therapies will continue to show benefit when added to four rather than ADCs given after trial interest.
Thankfully also and yes, thank you. The 13% and for flying. So obviously over 90% of our use is in that first-line setting on the we're talking about an overall market here, very accessible to co-sell, of which we estimate to over $700 million and potential gross revenue. So very, very significant market opportunity for us. We've seen that market share go up very consistently, even through that platinum shortage. Our market share continues to grow. There were just fewer patients taking eligible chemotherapies which makes sense. And we're very ambitious for what we can continue to add and not market share going forward. And frankly, I won't be satisfied until every eligible patient. I've got to sell.
Joseph Thome
Perfect. Thank you very much.
Operator
Gil Blum, Needham Company.
Gil Blum
Good morning. And thanks for taking our questions. Just a clarifying question. Did the IDMC look at the interim data that the committee have a remedy to disk? Can you do the study for futility.
Yes. Hey, Gail. So the interim analysis of the efficacy, one only on, obviously, if they saw the data they could they could, of course, do additional analyses at their discretion but the only analysis that was on sort of prespecified was one for efficacy.
Gil Blum
Okay. And maybe looking towards mid '24 for the ABC result, just to set our expectations of what we could potentially see there. Thank you.
Yes. So you know, obviously, what we are interested in seeing is we presented the early talk at the JPM And so we'll be looking to see how the data February sorry, continue to track versus that arm. And if you recall, the 12 months, we had about a 20% improvement from clearly the the rest of the curve could change, but we 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
Anupam Rama, JPMorgan.
Hi, guys. 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 Cascella? Thank you.
So Priyanka Can you repeat the question, please?
Yes, sure. So how much of the incremental head wind via the Platinum shortage is assumed in the 2024 guidance for Capella?
Yes, we don't assume if you're inflating any carry forward, we don't assume any given the limited duration of therapy of these patients along with, unfortunately, the the diagnosis to expiration and 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 currently certainly monitoring the FDA website and to make sure that it doesn't we don't see a repeat in 24 of what we saw in 23 and certainly at the clinic level, what we've heard from really late two three is that customers are not having issue being able to access any of the carbo versus platinum.
Understood. Thank you so much.
Operator
Laura Prendergast, Raymond James.
Laura Prendergast
Thanks for taking the questions. I was going to be able to elaborate a bit on CDC. midyear. This ADC combo data could still continue to look strong. What are the timing of when you expect to initiate a randomized trial and then additionally, on your your cash runway, does that include baked in launch costs represented to us if the final analysis is successful and the Phase three for the ADC combination? Thanks.
So I'll have John take the last one and then we can flip over to Raj.
John V
Data sources to have the cash runway part unit from ITMBC. launch costs. 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 in 80 C Phase three 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 a with some type of collaboration potentially where we would look at a Phase three trial.
Rajesh Malik
Yes. I mean, no, I was going to just I think, John covered it unless there are we have an additional question
Laura Prendergast
And then that's all for me. Thank you.
Operator
(Operator Instructions)
Edward White, H.C. Wainwright.
Hey, 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 it on investments and if so, how should we think about SG&A for next year or this year?
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
Actually, we continue to make tweaks to our, I would say, our commercial footprint in the field. And one example is our new strategic accounts team that we deployed in Q4 and into Q1, and we've been delighted with 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 new market expansion into new indications, we would reevaluate, but I don't see it being like a real phase shift.
John V
I see it being an evolution of the team that we have and from other SG&A costs from Steve, from an SG&A cost perspective, I think you'd asked about that. I mean we continue to invest in commercial, as we always have, as I mentioned earlier, you know, we do create and continue to see efficiencies in optimizing that cost structure of the commercial front, but we continue to invest in it.
Okay, thanks. And then is there any update on Simcere in China?
No. I mean, they obviously are continuing to sell co-sell for the initial indication in small cell there also. And they're also running their own studies, and they've been a wonderful partner to us to continue to be to that to this day. So no other updates beyond that.
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.
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.
