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Good day, and thank you for standing by. Welcome to the G1 Therapeutics First Quarter 2024 Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Will Roberts. Please go ahead.
Thank you, Victor. Good morning, everyone, and welcome to the G1 conference call to discuss our first quarter 2024 financial results and business update.
The press release on these financial results was issued this morning and can be found in our News section of our corporate website, g1therapeutics.com. On this morning's call, the team will provide a business overview of the 2024 first quarter, including an update on our commercial progress and clinical programs in that period with COSELA, which is 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. 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 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, May 1, 2024.
Joining me on the call today are Jack Bailey, our Chief Executive Officer; Andrew Perry, our Chief Commercial Officer; Dr. Raj Malik, our Chief Medical Officer; and John Umstead, our Chief Financial Officer.
I'll now turn the call over to Jack. Jack?
Thanks, Will. Good morning, everyone, and thank you for joining us on the call today.
From a commercial perspective, we continue to identify and execute on growth opportunities for COSELA. As you will hear from Andrew, our vial volume growth in the quarter was 4% over the fourth quarter of 2023 due to some challenges that he will speak to shortly. But as a result of the impact of the actions we've taken and the more recent sales trend, we remain confident in our 2024 net sales guidance of $60 million to $70 million.
We are committed to expanding usage of COSELA in its first indication in extensive stage small cell lung cancer, and assuming we continue to achieve our internal forecast, expect to drive G1 to profitability and cash flow positivity later next year.
Now as you'll hear from Raj, we also remain focused on the opportunity for category leadership across the spectrum of triple-negative breast cancer and in that regard, look forward to 2 important upcoming data readouts over the coming months.
First, we've shown promising results, thus far, in our ongoing Phase II trial, when trilacicilib is combined with the ADC sacituzumab govitecan, including meaningful improvements in median overall and 12-month survival. As you saw this morning, we are excited to provide the updated results in a poster at ASCO 2024 in early June.
Next, if the final results from our ongoing Phase III PRESERVE 2 trial of trilacicilib are positive, they would be amongst the most significant data generated in the first-line metastatic setting across PD-L1 status and a compelling data set for people living with this extremely aggressive disease. As Raj will discuss, based upon recent interactions with the FDA regarding the inclusion of events from patients enrolled in Ukraine, these results are now expected late in the second quarter of this year.
Finally, as you saw in our press release earlier today, we've out-licensed the global rights to lerociclib, excluding the Asia Pac region, to an early-stage transomics company called Pepper Bio. Through this transaction, Pepper Bio gains exclusive rights to develop, manufacture and commercialize lerociclib in those areas for all indications, except for certain radio-protected uses. They've identified CDK4/6 as a key pathway for hepatocellular carcinoma through their proprietary data platform. Lerociclib will now be their lead clinical stage asset to complement their early-stage discovery pipeline.
On today's call, Andrew will provide an update on our recent commercial efforts. Raj will provide the status of our ongoing TNBC trials and remind you of the timing of the data from each. John will then provide the financial results for the quarter, including our revenue, expense and cash expectations, along with a review of financials associated with the Pepper Bio transaction. Finally, I'll be back for some concluding comments.
With that, I'll turn the call over to Andrew.
Thank you, John. I'm going to take this opportunity to update you on our first quarter 2024 performance, which was a quarter where we made significant headway in parts of our commercial business. Although in other areas, we also faced some short-term challenges.
Our goal in Q1 was to build on the strong double-digit quarter-over-quarter vial growth, which we delivered in Q4 of 2023 and to set up growth opportunities, which will help us deliver our full year goals. We were largely successful in these objectives with some regional and segment variances, driven by some executional headwinds, which we took actions to address within the quarter. And while our vial volume grew, it should have been closer to double digits this quarter, if we had executed better in several areas.
As a reminder, in first-line extensive-stage small cell lung cancer, the maximum duration of chemotherapy is less than 90 days. So our quarterly growth relies on building a new patient base every quarter, and then creating additional breadth and depth, with newer existing accounts in order to grow.
Beginning with sales volume. We ended Q1 with 4% overall vial volume growth compared with Q4 2023. The low growth was attributable to 3 factors. First, we added [ 2 ] few new patients over the holiday period of December into January, which then impacted the number of continuing patients through the quarter. Secondly, we have a slow start with several large customers, primarily in the Southeast. These customers typically comprise 1/5 of our volume, and their orders were below the levels we would expect in the first part of the quarter. Thirdly, 3 of our contracted customer networks performed below expectations.
In each case, I will outline the actions we took to address the executional gaps. Firstly, we deployed 3 new sales representatives at the beginning of January. Secondly, we invested in a significant digital advertising push, with increased display ads in high-potential geographies, including the Southeast, as well as the digital and field campaign focused on driving debt with existing COSELA prescribers and the customers affiliated with contracted accounts.
Thirdly, we met with senior management at our large customers in the Southeast to address any educational or operational gaps, which could be slowing the sales growth. Finally, we enhanced several of our existing contracts and executed 2 new community network contracts, including 1 in February, which has been immediately successful in significantly growing volume.
A slow start to the year in the Southeast was offset by almost 13% growth in our West region, which comprises around 1/4 of our volume. 3 of 6 territories in the West region grew more than 15% in the quarter. As a result of this success, we added an additional headcount in our West region, focused on the Texas market, which continues to represent an enormous opportunity.
We also saw double-digit growth in the customers covered by our expanded strategic accounts function, which combines specialist knowledge of oncology pharmacy with extensive health systems experience. Those customers grew over 20% during the quarter and now comprise roughly 20% of our overall volume.
Going into Q2, we added an additional set of customers to their mix, where we believe this team can accelerate systematic adoption. Focusing on the top 100 customer organizations, which represent around half the volume opportunity in the market, we added 2 new top 100 customers during Q1 and another 1 in April, meaning 78 of the top 100 have ordered COSELA launched to date. 63 top 100 customers ordered during Q1, which jumped up from 56 in Q4, the highest number of top 100 customers to order in a quarter since launch.
Our proportion of business in top 100 stayed similar to Q4 at 57%. Across our business, we added over 50 new accounts in total, which is similar to the last few quarters. Our estimate of COSELA patient share remains around 13% in the first-line market, demonstrating that there remains significant opportunity for growth.
Moving into Q2. We saw a return to stronger growth in March, and April has been our highest month for both volume and ex-factory sales launched to date. The large customers in the Southeast has started slow in Q1 are back to growth at over 30% quarter-to-date. And our contracted business is also growing in double digits quarter-to-date.
With the actions we have taken, with 3 new top 100s and for the first time, more than 60 top 100 using COSELA during the quarter, we're confident in continued growth and our guided product revenue target. I'll now pass the call to Raj.
Thanks, Andrew, and good morning, everyone. Today, I will provide the status of our ongoing clinical trials and our expectations for the timing of results.
For our Phase III PRESERVE 2 trial, in combination with gemcitabine and carboplatin, as we mentioned on our last call, the boundary hazard ratio for our positive result at the final analysis is 0.67. As a reminder, the hazard ratio for the pembrolizumab arm of KEYNOTE-355 and the intent-to-treat or ITT population was 0.89. And the FDA-approved PD-L1 positive population was 0.73. So a positive result in PRESERVE 2 would mark the biggest improvement in overall survival to date in first-line metastatic triple-negative breast cancer.
Regarding this trial, we recently received feedback from the FDA recommending that the final analysis should be conducted in the ITT population, which includes the survival events from patients that were enrolled in the Ukraine rather than the modified ITT population that would have excluded them. Subsequent to our February financial results call, we reached agreement with the FDA on the statistical methodology for the overall survival analysis incorporating these events.
As a result, we have amended the protocol to account for these changes, and we now expect that the final overall survival analysis will be conducted at the end of the second quarter of 2024. We will announce the top-line results via press release and if positive, look forward to a more robust presentation of results at a medical meeting later in 2024. Assuming we achieve the overall survival endpoint, we will meet with the FDA to discuss the results and our plans for a supplemental NDA filing as soon as possible thereafter. Next, regarding our Phase II trial of trilacicilib, in combination with the TROP2 Antibody Drug Conjugate, sacituzumab, we're happy to announce this morning that the updated results have been accepted for a poster presentation at ASCO in early June.
As a reminder, in January, we described promising initial data, including meaningful improvements in median overall survival and 12-month survival among patients receiving trilacicilib in combination with sacituzumab compared to historical results for the ADC alone, and we are excited to update these initial results at ASCO.
Our measure of a successful trial would be in approximately 3 months or more improvement in median overall survival over historical results with sacituzumab. We believe that such a result would be of interest to companies developing TROP2 ADCs towards pursuing development partnerships with us, to move this combination into pivotal trials in triple-negative breast cancer and beyond.
We are also very interested in exploring efficacy in various subsets of patients, such as those treated with prior checkpoint inhibitors or CDK4/6 inhibitors. These types of exploratory analyses, which will be included in the ASCO results, could be helpful in designing future clinical trials of trilacicilib, plus TROP2 ADC combinations. We look forward to both readouts as positive results from these trials would enable us to build category leadership in triple-negative breast cancer.
With that, I'll turn the call over to John for an update on our financial results. John?
Thanks, Raj, and good morning, everyone. As Will mentioned, full financial results for the first quarter of 2024 are available in this morning's press release and will be in the 10-Q, which we expect to file after market close. Net sales of COSELA were $14.1 million for the first quarter of 2024. This compares favorably to $10.5 million in net sales of COSELA in the first quarter of 2023, representing an increase of 34%.
Our total revenue for the first quarter of 2024 was $14.5 million, which compares favorably to $12.9 million in the first quarter of 2023. Our total operating expenses were $23.5 million in the first quarter of 2024 compared to $38.7 million for the same period in 2023, comprised of the following: $1.1 million in cost of goods sold compared to $1.5 million for the same period in 2023. $7.3 million in research and development expenses compared to $15.5 million for the same period in 2023. This change was primarily due to continued wind down of previously completed studies.
And lastly, $15.1 million in selling, general and administrative expenses compared to $21.8 million for the same period in 2023. The decrease in SG&A expense was primarily due to decreases in personnel costs and medical affairs and continued optimization of our commercialization activities.
Regarding our cash position, we ended the first quarter with cash, cash equivalents and marketable securities of $65.2 million compared to $82.2 million as of December 31, 2023. It is important to note that this current cash balance of $65.2 million reflects an $8.7 million paydown of our debt facility during the quarter due to the borrowing base limit tied to our trailing 3-month revenue. However, by reducing our principal, we will realize cash interest savings this year of almost $1 million.
Based on our current revenue projections, we do not anticipate having any further paydowns until required principal payments begin in December of this year. Absent this paydown, our operational cash burn totaled approximately $8 million for the quarter.
Next, regarding our revenue, expense and cash runway guidance for 2024. As previously stated, we remain confident in our net sales revenue guidance of between $60 million and $70 million for 2024. There is no change to our 2024 gross to net expense percentage estimates. We anticipate receiving a $5 million milestone payment from Genor in the back half of 2024 following their commercial approval of lerociclib in China. If approved, we would begin receiving royalties on sales of lerociclib in the territory.
Regarding expenses for 2024, we currently expect operating expenses to be 15% to 20% lower than that of 2023. This is driven by reduced R&D spend, in addition to continued optimization of our cost structure following previously targeted headcount reductions, while continuing to invest in the commercial organization. We continue to expect the 2024 year-end cash, cash equivalents and marketable securities balance in the range of $50 million to $60 million. And based on the foregoing, we expect that our cash runway will take us into the third quarter of 2025. This cash runway includes anticipated TNBC filing and launch-related costs, but does not include any TNBC-associated revenue.
Finally, Jack mentioned earlier in the call that we have out-licensed lerociclib to Pepper Bio, excluding the Asia Pac countries, which previously out-licensed to Genor. G1 expects to receive upfront payments of mid-single-digit millions within 12 months, and we are eligible to receive up to $135 million upon achievement of certain development and commercial milestones. In addition, we will receive a double-digit royalty on aggregate annual net sales of lerociclib.
With that, I'll turn the call back over to Jack for some closing comments. Jack?
Thank you, John, Raj, Andrew and Will. And as always, I also want to recognize the cancer community. We are thankful for the opportunity to be a part of your journey.
Now as you heard from Andrew, we are encouraged by the continued growth and acceptance of COSELA in our top 100 accounts, the return to expected ordering patterns in April by some large customers in the Southeast after a slower-than-expected first quarter and the immediate impact of our strategic accounts functions. But while our commercial team continues to execute on growing the product in its first indication, our corporate focus must stay on the upcoming clinical results from our ongoing TNBC trials that a positive could build category leadership in triple-negative breast cancer.
To that end, we look forward to presenting the mature survival results from our Phase II trial of trilacicilib, in combination with the TROP2 ADC sacituzumab at ASCO in June. We believe that an improvement in overall survival of approximately 3 months or more, due to the addition of trilacicilib to that ADC, would be a striking success and would allow us to pursue development partnerships to move the combination of trilaciclib and TROP2 ADCs into pivotal trials.
Furthermore, we expect final results from our ongoing Phase III PRESERVE 2 trial in first-line triple-negative breast cancer late in the second quarter of this year. If positive, we would move quickly towards filing of an sNDA.
Thank you for your time this morning. We will speak, again, in this format on the second quarter 2024 call in August, and we'll see many of you at ASCO or on our upcoming non-fill roadshows.
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.
[Operator Instructions] Our first question comes from the line of Gil Blum from Needham.
Maybe a quick one on the commercial aspect here. Would you say that we're starting to see some level of seasonality on [indiscernible]. I'm kind of focusing on the remarks regarding the holidays and how that affected the patients.
Thanks, Gil. No, I would not say that. It takes us a couple of months in the claims data to diagnose when we see a drop in new patients. We diagnose that issue around February, and we're able to obviously immediately act on it.
I don't think that there's any reason to think that, in any way, this is a seasonality issue. This is about our ability to execute, which we have to continue to improve every quarter. What we have seen, of course, though, during Q1 was some great enhancements in our execution in some parts of the country and in some segments of our business, including in our West business and our Strategic Defense business and actually in our academic sector as well, which also grew during the quarter. So yes, I hope that answers your question.
It does. That was very helpful. And as to the readout for the triple-negative breast cancer study, what details do you think you're going to include in that readout? And will those details and the level of disclosure depend on whether the study is successful?
Gil, Raj here. Yes. So we plan to include enough in the press release, really for the investment community to get a sense of what the results were. We always have to balance this with presenting the full set of data at a medical conference. So obviously, the degree of improvement in overall survival, some important subsets, some comments on safety, obviously, those types of comments, but it should be a fulsome disclosure.
Our next question comes from the line of Joseph Thome from TD Cowen.
Maybe 1 around the inclusion of the Ukrainian patients in the TNBC study. Maybe can you just give us an idea of what proportion of patients were from Ukrainian sites? And whether the company was advocating kind of one way or the other to do the ITT or the MITT population? Were there any issues with getting patients drug or data quality or anything like that?
Joe, so there were 13 patients that were enrolled in Ukraine. So we had initially proposed the modified ITT population, which would have excluded these patients and obviously, the events from these patients. The agency recommended that we include the events from these patients. And so it was really the discussion back and forth on how to do that because there are a variety of approaches to do that, and that's kind of what resulted in our time line.
But in terms of -- we're obviously blinded to the data. We remain confident in the results. So it was a relatively small number of patients, 13 out of 187. So yes, we feel confident of the data.
Great. And then maybe just one on the combination with Trodelvy and sort of the path forward there. I know you indicated some potential partnership interest, if the data are positive and kind of hit that 3-month benchmark.
Maybe where are you in terms of potential partnership discussions? And is there a path forward for a combination without a partner? Or would you need a partner to move toward to Phase III? How are you thinking about that?
Yes. Thanks, Joe. This is Jack. Yes, I really think we're prioritizing partnership on this. I mean, a, there's just a lot of ADC companies out there, multiple TROP2 companies. So we've had discussions ongoing. A lot of folks are anticipating or waiting for that data to come out. So that is our preferred path at this point, is to look for a partnership development capital to be able to do that.
Our next question is from the line of Anupam Rama from JPMorgan.
This is Priyanka on for Anupam. I just have one quick question. I think it was mentioned in the call that 60 of the top 100 accounts are using COSELA. How would you tackle those who are not using COSELA? And are there any commonalities between those that you can target?
Thanks, Priyanka. Yes, so actually, 78 of the top 100 have trialed COSELA launched to date, and we added 3 since our last call. So actually, we've continued to add to the number that are trialing. In Q4, 56 of the top 100 had actually ordered during the quarter. That jumped up significantly to 63 in Q1. So that's actually really the biggest jump off that we've seen in quite a few quarters.
So the secret to growth, obviously, in those top 100 is continuing to build depth and moving from trial utilization to systematic adoption. We do continue to add top 100s over time. And things like the guideline improvements we saw in ASCO last year are obviously helpful as are the real world evidence that we've been able to compile on the medical front. So we continue to make headway in the top 100, and we continue to see them as a growth driver going forward, and we look forward to reporting success in the future.
Our next question come from the line of Laura Prendergast from Raymond James.
Just two quick ones for me. First, as far as in first-line triple-negative breast cancer, what is the expected time on the chemotherapy treatment for a patient versus what you guys are have been seeing in lung cancer? And then if the PRESERVE 2 trial does hit on overall survival, do you expect to be able to get approval beyond first-line based off of the PRESERVE 2 study? Just how you guys are thinking about this?
Laura, so in terms of the first-line TNBC obviously, I can't comment on our Phase III just because it's still ongoing. However, if you refer back to the Phase II study, the number of cycles on -- the median number of cycles is around 8. But if you look at the total cumulative dose of chemo, it's about 50% to 60% greater when patients received [ Trila ] compared to chemotherapy alone.
So in terms of -- your second question was, could we potentially get approval beyond the first-line indication? This is always going to be a matter of discussion once we have the data and related to the indication statement. And obviously, our approach will be to try and get as broad an approval as possible with regards to gemcitabine carboplatin combinations, which could, of course, span first-line and beyond. But that will be a matter of discussion with the agency.
Our next question comes from the line of David Nierengarten from Wedbush.
Maybe a follow-up on the Ukrainian patients. I guess I'm wondering if the agencies preferred to include them because it would aid in statistical analysis or provide a more robust answer? And I asked this because it would seem from moving up in the time line that events have occurred from that population. So they would contribute, unless I'm wrong. So that's the question.
Yes, David, yes. So events have occurred in those patients, and that is the reason why when you count those events, the time line moved up a little bit at the end of the second quarter. We're obviously blinded. We don't know which arm those events actually occurred in.
And I think this is an open question really in terms of how to deal with patients, who are enrolled in Ukraine. And there is really no good guidance out there. In fact, from the FDA or the European agencies were starting to put something out. So I think it's been sort of all over the board. So we put our proposal forward. And the agency clearly wants to include all the data, which is what we're doing. So yes, that's where we landed.
Our next question come from the line of [ Stephen Bersey ] from H.C. Wainright.
This is Steve on for Ed White. Congratulations on the lerociclib deal. So we're just wondering whether the payments are per indication? And are they going to be onetime payments? And then also what triggers the milestone payments and then the timing on those?
Yes. Thanks, Stephen. So we're certainly excited about the deal, too. It gives lerociclib the opportunity to obviously benefit patients. So I didn't take your first part. In terms of the milestone, they're a combination of both development, regulatory. So those will unfold over time. Your first part of your question was?
So are the payments going to be per indications, different indications that you go into?
Yes. There can be multiple payments based upon multiple indications.
[Operator Instructions] Our next question comes from the line of Tash Hasan from Rodman and Renshaw.
This is Tash Hasan on for Tony Butler. If I heard correctly, I think Andrew spoke about the addition of 3 new headcounts in the sales force. I wonder if you could share your thoughts about how this is expected to help with the commercial efforts in the current setting? And then I have another question.
Sure. Thank you for the question. We always are looking at our sales force size and structure to be able to identify new opportunities and capitalize on them, and these changes were -- are effort to do that. I also mentioned that we added a headcount in the West. For example, to do exactly that to take advantage of some of the opportunities we've identified. In many situations, the success of COSELA relies on sales representatives gaining access to key decision-makers, key prescribers as well as nursing and pharmacy staff. And so our sales team performed a valuable role with doing that, in combination with our market access team, including our strategic accounts team, and then answering any questions that arise through our medical affairs team. So in many respects, the continued evolution of our sales force is absolutely critical to our success, and we were delighted to welcome those new folks into our organization.
That's helpful. The other question is about small cell lung cancer patients beyond the frontline setting. For example, can you share with us your data, and assuming that there is any, the share of second-line assortment markets? And also whether you see a significant number of patients being dosed with COSELA in the second and third line after having received it in the frontline setting?
Sure. Yes. I can give you an outline of that. So about 90% of our use today is in the first-line setting. About 10% is in second-line plus. Within that 10%, there's topotecan patients, which is part of our indication as well as patients who are rechallenged with etoposide/platinum.
Our overall market share -- or our first-line market share is around 13%. Our overall market share is not too different from that. And our share in the second-line setting is not too different from that either, simply double digits, on both the eligible patients in the second-line setting.
So there's no huge difference in our market share across first and second-line use. Our focus is mainly first-line use because that represents the majority of patients.
And with no further questions in the queue, I'd like to turn it back over to Jack Bailey, CEO, for any closing remarks.
Thank you, operator. As always, we look forward to keeping everybody updated on our progress. Certainly, thank you for joining us today. We'll be in touch.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.