G1 THERAPEUTICS, INC. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes included elsewhere in this quarterly report. This discussion and other parts of this quarterly report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. As a result of many factors, including those factors set forth in the "Risk Factors" section of our 2020 Form 10-K, and in our subsequently filed Quarterly Reports on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a commercial-stage biopharmaceutical company focused on the development
and commercialization of novel small molecule therapeutics for the treatment of
patients with cancer. Our first approved product by the
We shall use "COSELA" when we are referring to our FDA approved drug and "trilaciclib" when we are referring to our development of COSELA for additional indications.
Product Pipeline
Trilaciclib is a first-in-class therapy designed to help protect against chemotherapy-induced myelosuppression. Trilaciclib helps protect HSPCs in bone marrow by transiently inhibiting CDK4/6 leading to a temporary arrest of susceptible host cells during chemotherapy in ES-SCLC patients. This reduces the duration and severity of neutropenia and other myelosuppressive consequences of chemotherapy. In addition, trilaciclib activates and enhances the immune system response driving increased anti-tumor efficacy, which we continue to explore in clinical trials.
On
Rintodestrant is an oral selective estrogen receptor degrader ("SERD") for the treatment of ER+ breast cancer. We are in the process of evaluating partnering options for rintodestrant. In 2020, we out-licensed global rights to lerociclib, an internally discovered and differentiated oral CDK4/6 inhibitor designed to enable more effective combination treatment strategies across multiple oncology indications. We also have intellectual property focused on cyclin-dependent kinase targets.
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G1 Therapeutics Product Pipeline
Development &
Commercialization Rights
Candidate Indication Status (all indications)
Extensive-stage COSELA
small cell lung (trilaciclib)
cancer (ES-SCLC) Approved by FDA
Colorectal cancer Registrational
(CRC) trial
ongoing
1L/2L metastatic Registrational G1 Therapeutics owns all
Triple negative trial global development and
trilaciclib breast cancer ongoing commercial rights across all
(mTNBC) indications, with the
2L/3L Non-small Phase 2 trial exception of Greater China
cell lung cancer ongoing (Simcere)
(NSCLC)
1L Bladder cancer Phase 2 trial
ongoing
Neoadjuvant breast Phase 2 trial
cancer ongoing
(I-SPY 2 TRIAL™)
rintodestrant ER+, HER2- breast Phase 1b
cancer complete G1 - Global
EQRx: Global and Japan (ex.
Asia Pacific)
lerociclib Multiple Clinical Stage
Genor Biopharma: Asia Pacific
(ex. Japan)
Trilaciclib helps protect HSPCs in bone marrow by transiently inhibiting CDK4/6 leading to a temporary arrest of susceptible host cells during chemotherapy in ES-SCLC patients. This reduces the duration and severity of neutropenia and other myelosuppressive consequences of chemotherapy. In addition, trilaciclib has demonstrated immune system response enhancement which we are exploring in clinical trials to show increased anti-tumor efficacy.
Trilaciclib, a transient IV CDK4/6 inhibitor, is a novel therapeutic approach which is given before chemotherapy that temporarily blocks progression through the cell cycle. This provides two benefits. First, it proactively helps protect HSPCs in bone marrow leading to preservation of neutrophils, erythrocytes, and platelets (called myeloprotection) which reduces the occurrences and severity of neutropenia and other myelosuppressive consequences of chemotherapy. This myeloprotection benefit has been conclusively proven in double-blind placebo-controlled clinical trials in extensive-stage small cell lung cancer. Second, trilaciclib activates and enhances the immune system response driving increased anti-tumor efficacy, which we are exploring in clinical trials. Our randomized clinical trials have demonstrated that trilaciclib can provide myeloprotection benefits and has the potential to improve survival as a result of its anti-tumor efficacy benefit.
Chemotherapy is an effective and important weapon against cancer. However, chemotherapy does not differentiate between healthy cells and cancer cells and kills both, including important stem cells in the bone marrow (namely, HSPCs) that produce white blood cells, red blood cells and platelets, and immune cells. This chemotherapy-induced bone marrow damage is known as myelosuppression. When white blood cells, red blood cells and platelets become depleted, chemotherapy patients are at increased risk of infection, experience anemia and fatigue, and are at increased risk of bleeding. Myelosuppression often requires the administration of rescue interventions such as growth factors and blood or platelet transfusions and may also result in chemotherapy dose delays and reductions. Immune cell damage may decrease the ability of the immune system to fight the cancer, as well as infection.
On
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myeloprotection measures, compared to patients receiving chemotherapy without
COSELA. G1 announced on
In
In
We are also executing on our tumor-agnostic strategy to evaluate the potential benefits of trilaciclib to patients with other tumors that are treated with chemotherapy. We have five ongoing clinical trials: a pivotal trial in 1L colorectal cancer ("CRC"), a pivotal trial in mTNBC (including 1L and 2L patients), a Phase 2 trial in neoadjuvant breast cancer ("I-SPY 2"), a Phase 2 trial in 2L/3L non-small cell lung cancer ("NSCLC") in post-checkpoint patients, and a Phase 2 1L bladder cancer trial with chemotherapy and a checkpoint inhibitor. These studies across treatment settings and tumor types will evaluate trilaciclib's dual benefits in both multi-lineage myeloprotection and anti-tumor efficacy.
Pivotal 1L Colorectal Cancer ("CRC")
We are enrolling patients in PRESERVE 1, a randomized, placebo-controlled registrational trial of trilaciclib in CRC. CRC is a large indication commonly treated with 5-FU-based chemotherapy. We have extensive preclinical research demonstrating myeloprotection and potential efficacy in 5-FU-based regimens with trilaciclib. Our ongoing 1L CRC trial is with FOLFOXIRI, which is the most efficacious chemo regimen in this tumor but is also highly myelosuppressive. By reducing the toxicity of FOLFOXIRI, we believe we will significantly expand its use in CRC and potentially improve overall survival.
1L/2L Metastatic Triple-Negative Breast Cancer ("mTNBC")
In 2017, we initiated a randomized Phase 2 trial of trilaciclib in patients with
first-/second-/third-line mTNBC receiving gemcitabine ("GC") and
carboplatin. Enrollment was completed in the second quarter of 2018. At the 2018
SABCS, we presented preliminary trilaciclib data demonstrating improvement in
progression-free survival ("PFS"). In
On
2L/3L Non-Small Cell
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On
1L Bladder Cancer
On
Phase 2 Neoadjuvant Breast Cancer (I-SPY 2)
Trilaciclib is included in a randomized, investigational treatment arm for the ongoing I-SPY 2 TRIAL™ for neoadjuvant treatment of locally advanced breast cancer. The trial, initiated in the second quarter of 2020 and run by the non-profit Quantum Leap Healthcare Collaborative, is designed to rapidly screen promising experimental treatments and identify those most effective in specific patient subgroups based on molecular characteristics (biomarker signatures). This trial will generate myeloprotection and anti-tumor efficacy data across the different subtypes of breast cancer.
Rintodestrant
Rintodestrant is a clinical-stage oral SERD, for use as a monotherapy and in
combination with CDK4/6 inhibitors, initially Ibrance® (palbociclib), for the
treatment of ER+, HER2- breast cancer. Based on compelling preclinical efficacy
and safety data, we filed an Investigational New Drug application ("IND") with
the FDA in the fourth quarter of 2017. In 2018, we initiated a Phase 1/2a (dose
escalation/dose expansion) clinical trial in ER+, HER2- breast cancer.
Preliminary data from the Phase 1 portion of this trial were presented at the
2019
Lerociclib
Lerociclib is a differentiated oral CDK4/6 inhibitor being developed for use in
combination with other targeted therapies in multiple oncology indications. In
2020, we entered into separate, exclusive agreements with
Coronavirus (COVID-19) impact on operations
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We have implemented business continuity plans to address the COVID-19 pandemic and minimize disruptions to ongoing operations. Enrollment of patients in current and future clinical trials may be impacted by COVID-19. We do not anticipate significant supply chain delays or shortages as a result of the COVID-19 pandemic. COVID-19 travel limitations and government-mandated work-from-home or shelter-in-place orders, may reduce the number of in-person meetings with prescribers and fewer patient visits with physicians, potentially resulting in fewer new prescriptions.
We established a COVID-19 response team which continually monitors the impact of COVID-19 on our operations. The COVID-19 response team manages our workplace protocols that governs our employees' use of our office. To mitigate the impact of COVID-19 on our business, we put in place the following safety measures for our employees, patients, healthcare professionals, and suppliers to limit exposure: we substantially restricted travel, supplied personal protective equipment to employees, limited access to our headquarters and asked most of our staff to work remotely. In addition, we added bandwidth and VPN capacity to our infrastructure to facilitate remote work arrangements. We will continue to monitor the impact of COVID-19 on our operations and report to our Board of Directors regularly on the progress of our response to the COVID-19 outbreak.
Financial Overview
Since our inception in 2008, we have devoted substantially all of our resources
to synthesizing, acquiring, testing and developing our product candidates,
including conducting preclinical studies and clinical trials and providing
general and administrative support for these operations as well as securing
intellectual property protection for our product candidates. Currently, COSELATM
is our only product approved for sale. We began generating revenue for the net
product sales from COSELA in March of 2021. We recorded
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As of
• continue development of our product candidates, including initiating additional
clinical trials;
• identify and develop new product candidates;
• seek marketing approvals for our product candidates that successfully complete
clinical trials;
• grow our sales, marketing and distribution infrastructure to commercialize
COSELA and any future products for which we may obtain marketing approval;
• achieve market acceptance of our product candidates in the medical community
and with third-party payors;
• maintain, expand and protect our intellectual property portfolio;
• hire additional personnel;
• enter into collaboration arrangements, if any, for the development of our
product candidates or in-license other products and technologies;
• add operational, financial and management information systems and personnel,
including personnel to support our product development and planned future
commercialization efforts; and
• continue to incur increased costs as a result of operating as a public company.
License agreement with the
In
Components of our Results of Operations
Revenue
On
We entered into an exclusive license agreement with
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We entered into an exclusive license agreement with
We entered into an exclusive license agreement with
We entered into an exclusive license agreement with
Operating expenses
We classify our operating expenses into three categories: cost of goods sold, research and development and selling, general and administrative. Personnel costs, including salaries, benefits, bonuses, and stock-based compensation expense, comprise a significant component of research and development and general and administrative expense categories. We allocate expenses associated with personnel costs based on the nature of work associated with these resources. In addition, costs to sell and market COSELA are included within selling, general and administrative expense categories.
Cost of goods sold
Cost of goods sold includes direct and indirect costs related to the manufacturing and distribution of COSELA, including third-party manufacturing costs, packaging services, freight-in, third-party logistics costs associated with COSELA, and personnel costs. Cost of goods sold may also include period costs related to certain inventory manufacturing services and inventory adjustment charges.
Research and development expenses
The largest component of our total operating expenses since inception has been research and development activities, including the preclinical and clinical development of our product candidates.
Research and development costs are expensed as incurred. Our research and development expense primarily consists of:
• salaries and personnel-related costs, including bonuses, benefits and any
stock-based compensation, for our scientific personnel performing or managing
out-sourced research and development activities;
• costs incurred under agreements with contract research organizations and
investigative sites that conduct preclinical studies and clinical trials;
• costs related to manufacturing pharmaceutical active ingredients and drug
products for preclinical studies and clinical trials;
• costs related to upfront and milestone payments under in-licensing agreements;
• fees paid to consultants and other third parties who support our product
candidate development;
• other costs incurred in seeking regulatory approval of our product candidates;
and
• allocated facility-related costs and overhead.
The successful development of our product candidates is highly uncertain. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Accordingly, we expect research and development costs to increase significantly for the foreseeable future as programs progress. However, we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization. We are also unable to predict when, if ever, material net cash inflows will commence from our product candidates to offset these expenses. Our expenditures on current and future preclinical and clinical development
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programs are subject to numerous uncertainties in timing and cost to completion. The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including:
• the scope, rate of progress, and expenses of our ongoing as well as any
additional clinical trials and other research and development activities;
• future clinical trial results;
• achievement of milestones requiring payments under our in-licensing agreements;
• uncertainties in clinical trial enrollment rates or drop-out or discontinuation
rates of patients;
• potential additional studies requested by regulatory agencies;
• significant and changing government regulation; and
• the timing and receipt of any regulatory approvals.
We track research and development expenses on a program-by-program basis only for clinical-stage product candidates. Preclinical research and development expenses and chemical manufacturing research and development expenses are not assigned or allocated to individual development programs. As of the second quarter of 2021, we had two clinical-stage product candidates, trilaciclib and rintodestrant.
Selling, general and administrative expenses
Selling, general and administrative expenses consist of personnel costs, allocated expenses and other expenses for outside professional services, including legal, audit and accounting services. Personnel costs consist of salaries, bonuses, benefits and stock-based compensation. Other general and administrative expenses include facility-related costs not otherwise allocated to research and development expense, professional fees, commercialization costs, expenses associated with obtaining and maintaining patents and costs of our information systems. We anticipate that our general and administrative expenses will continue to increase in the future as we increase our headcount to support our continued research and development and commercialization of COSELATM.
We expect to continue to incur additional selling, general and administrative
expenses in the future in connection with the commercialization of COSELA, as we
support continued research and development activities, and as we support our
operations in a public company environment, including expenses related to
compliance with the rules and regulations of the
Total other income (expense), net
Total other income (expense), net consists of interest income earned on cash and cash equivalents and interest expenses incurred under our loan and security agreement with Hercules.
Income taxes
To date, we have not been required to pay
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Results of Operations
Comparison of the three months ended
Three Months Ended June 30, Change
2021 2020 $
(in thousands)
Revenues:
Product sales, net $ 2,532 $ - $ 2,532
License revenue 4,072 2,140 1,932
Total revenues 6,604 2,140 4,464
Operating expenses:
Cost of goods sold 808 - 808
Research and development 18,752 18,531 221
Selling, general and administrative 25,236 14,431 10,805
Total operating expenses 44,796 32,962 11,834
Loss from operations (38,192 ) (30,822 ) (7,370 )
Other income (expense):
Interest income 9 91 (82 )
Interest expense (927 ) (265 ) (662 )
Other income (expense) (92 ) (214 ) 122
Total other income (expense), net (1,010 ) (388 ) (622 )
Loss before income taxes (39,202 ) (31,210 ) (7,992 )
Income tax expense 220 - 220
Net loss $ (39,422 ) $ (31,210 ) $ (8,212 )
Product sales, net
Product sales, net was
License Revenue
License revenue was
Cost of goods sold
Cost of goods sold was
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Research and development
Research and development expenses were
Three Months Ended June 30,
2021 2020
(in thousands)
Clinical Program Expenses-trilaciclib
531 1,374
Clinical Program Expenses-lerociclib 968 1,544
Chemical Manufacturing and Development 1,505 9,034
Discovery, Pre-Clinical and Other Expenses 775 962
Selling, general and administrative
Selling, general and administrative expenses were
Total other income (expense), net
Total other income (expense), net was
Income tax expense
Income tax expense was
Results of Operations
Comparison of the six months ended
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Six Months Ended June 30, Change
2021 2020 $
(in thousands)
Revenues:
Product sales, net $ 3,141 $ - $ 3,141
License revenue 17,681 2,140 15,541
Total revenues 20,822 2,140 18,682
Operating expenses:
Cost of goods sold 1,051 - 1,051
Research and development 35,292 38,965 (3,673 )
Selling, general and administrative 48,206 25,818 22,388
Total operating expenses 84,549 64,783 19,766
Loss from operations (63,727 ) (62,643 ) (1,084 )
Other income (expense):
Interest income 28 872 (844 )
Interest expense (1,675 ) (265 ) (1,410 )
Other income (expense) (132 ) (197 ) 65
Total other income (expense), net (1,779 ) 410 (2,189 )
Loss before income taxes (65,506 ) (62,233 ) (3,273 )
Income tax expense 358 - 358
Net loss $ (65,864 ) $ (62,233 ) $ (3,631 )
Product sales, net
Product sales, net was
License Revenue
License revenue was
Cost of goods sold
Cost of goods sold was
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Research and development
Research and development expenses were
Six Months Ended June 30,
2021 2020
(in thousands)
Clinical Program Expenses-trilaciclib
1,896 3,745
Clinical Program Expenses-lerociclib 1,995 3,595
Chemical Manufacturing and Development 3,250 14,184
Discovery and Pre-clinical Expenses 1,430 2,325
Selling, general and administrative
Selling, general and administrative expenses were
Total other income (expense), net
Total other income (expense), net was
Income tax expense
Income tax expense was
Liquidity and Capital Resources
We have incurred cumulative losses and negative cash flows from operations since
our inception in 2008. As of
As of
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Shelf registration statement
On
At-the-market offering
On
Between
On
Loan and Security Agreement with Hercules
On
Genor License Agreement
On
Under the license agreement, Genor agreed to pay us a non-refundable, upfront
cash payment of
EQRx License Agreement
On
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Under the license agreement, EQRx agreed to pay us a non-refundable, upfront
cash payment of
Simcere License Agreement
On
Under the license agreement, Simcere agreed to pay us a non-refundable, upfront
cash payment of
Cash flows
The following table summarizes our cash flows for the periods indicated:
Six Months Ended June 30, Change
2021 2020 $
(in thousands)
Net cash used in operating activities $ (63,368 ) $ (55,873 ) $ (7,495 )
Net cash provided/used in investing
activities - - -
Net cash provided by financing activities 100,023 20,932 79,091
Net change in cash, cash equivalents, and
restricted cash $ 36,655 $ (34,941 ) $ 71,596 Net cash used in operating activities
During the six months ended
During the six months ended
Net cash used in operating activities decreased by
Net cash used in investing activities
During the six months ended
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Net cash provided by financing activities
During the six months ended
During the six months ended
Operating capital requirements and plan of operations
We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of and seek regulatory approvals for our product candidates, and continue to commercialize COSELATM. We are subject to all of the risks inherent in the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We expect to incur additional costs associated with operating as a public company and we anticipate that we will need substantial additional funding in connection with our continuing operations.
We believe that our existing cash and cash equivalents will be sufficient to fund our projected cash needs for at least the next 12 months.
We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:
• the scope, progress, results and costs of nonclinical development,
laboratory testing and clinical trials for our product candidates;
• the scope, prioritization and number of our research and development
programs;
• the costs, timing and outcome of regulatory review of our product candidates;
• the extent to which we enter into non-exclusive, jointly funded clinical
research collaboration arrangements, if any, for the development of our
product candidates in combination with other companies' products;
• our ability to establish such collaborative co-development arrangements on
favorable terms, if at all;
• the achievement of milestones or occurrence of other developments that
trigger payments under our license agreements and any collaboration
agreements into which we enter;
• the extent to which we are obligated to reimburse, or entitled to
reimbursement of, clinical trial costs under future collaboration
agreements, if any;
• the extent to which we acquire or in-license product candidates and
technologies, such as rintodestrant, and the terms of such in-licenses;
• the costs of future commercialization activities, including product sales,
marketing, manufacturing and distribution, for any of our product
candidates for which we receive marketing approval;
• revenue, if any, received from commercial sales of our product candidates;
and
• the costs of preparing, filing and prosecuting patent applications,
maintaining and enforcing our intellectual property rights and defending
intellectual property-related claims.
Until such time, if ever, as we can generate substantial revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. We do not have any committed external source of funds except for amounts included under our licensing arrangements and the loan agreement with Hercules. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders' ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay,
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limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Contractual Obligations, Commitments and Contingencies
There have been no material changes to our contractual obligations during the
current period from those disclosed in our Annual Report on Form 10-K for the
year ended
Off-Balance Sheet Arrangements
We did not have, during the periods presented, and we do not currently have, any
off-balance sheet arrangements, as defined under applicable
Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which have been prepared in
accordance with accounting principles generally accepted in
We believe that our accounting policies are critical to the process of making
significant judgments and estimates in the preparation of our financial
statements and understanding and evaluating our reported financial results. We
discussed our accounting policies and significant assumptions used in our
estimates in Note 2 of our audited financial statements included in our 2020
Form 10-K. There have been no material changes during the six months ended
Recent Accounting Pronouncements
Note 2 to our unaudited condensed financial statements included in Item 1 of this Quarterly Report on Form 10-Q does not include any recently issued accounting pronouncements that are applicable to our Company or impact our financial statements.
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