2024-01-09 07:55:26 ET
Summary
- G1 Therapeutics has provided pipeline updates, including encouraging preliminary overall survival data from a phase 2 study of trilaciclib in combination with sacituzumab govitecan for advanced triple-negative breast cancer.
- The company aims to pursue global partnerships for the release and support of trilaciclib if positive results are obtained from the ongoing trials.
- G1 Therapeutics' cash runway has been extended into early 2025, providing more time to address FDA filings and potential partnerships.
Topline Summary
It's not been long since I last looked at G1 Therapeutics (GTHX), with an analysis of their sales and pipeline suggesting to me that they were really being undervalued following their Q3 financial reporting. I wouldn't normally update so quickly, but we have just gotten word of new trial updates and guidance on a potentially massive phase 3 readout later this month, making this one really worth your attention. I reiterate a buy in advance of these findings, with caution that there is definitely risk that the trial could still fail. Also, we have new financials to take a look at.
Pipeline Updates
Trilaciclib remains the main drug developed and sold by GTHX, and I've covered its past successes and failures in substantial detail in previous articles .
January 2024 sees us considering two pieces of information per an announcement on January 8 . First, the company highlighted "encouraging" preliminary overall survival from their phase 2 study evaluating trilaciclib in combination with sacituzumab govitecan for patients with advanced triple-negative breast cancer.
Sacituzumab govitecan is an important, recently approved treatment option targeting a molecule called Trop2. In the ASCENT trial , this agent demonstrated meaningful overall survival improvement compared with chemotherapy in patients with disease relapse or other failure following prior treatment. Neutropenia was a key adverse event for this molecule, though, with 51% of patients having high-grade neutrophil loss.
This can place patients at risk of infection and other adverse outcome, and the fundamental hypothesis of using trilaciclib in this setting is to temporarily arrest cell division to preserve hematopoiesis, hopefully without interfering with chemotherapy efficacy.
In their ongoing phase 2 trial , GTHX reported a median OS of 17.9 months with sacituzumab govitecan plus trilaciclib. In the ASCENT trial, sacituzumab govitecan alone had a median OS of 12.1 months, which was itself an almost doubling over the prior standard of care. GTHX also intends to provide a more robust update of these data in mid-2024, which to me signals an ASCO presentation.
This is an exciting signal of efficacy, especially after we saw an OS decrement when given to patients with colorectal cancer. We need to see more confirmation in a randomized study, but this is definitely clear proof of concept and worthy of further exploration.
GTHX also guided that we can expect an interim OS readout from the pivotal frontline triple-negative breast cancer study to come later this quarter. If they're able to reproduce the signals of efficacy they've seen in 2 different phase 2 trials (albeit in the relapsed disease setting), then a new approval is highly likely. GTHX also guided that they intend to pursue global partnerships to enable worldwide release and support of trilaciclib if these findings are positive.
Financial Overview
GTHX have yet to report their financial data to the SEC for Q4 2024, but their most recent guidance suggested that trilaciclib volume grew by 19% quarter over quarter, driven in large part due to the easing of shortages on platinum-based chemotherapy drugs.
As a reminder, their prior quarter saw revenues of $12.3 million, $10.8 million of which came from net product sales. Due at least in part to the sales volume growth, GTHX has revised their cash runway guidance from Q3 2024 to extend into early 2025. This buys important time to possibly square away key FDA filings as needed, or even possibly a partnership. Both of these could be catalysts for resolving cash issues from a position of strength.
Strengths and Risks
Positive phase 2 results are great news. Trilaciclib seems to be helping patients receiving novel treatment options like sacituzumab govitecan, which was something of a question mark. It still is, because we don't have a randomized trial to really confirm what looks like a benefit.
Extending the cash runway, even by just a few quarters, is also great news. They have a great opportunity to generate some kind of news that can be leveraged to raise cash at a position of strength, or possibly without dilution. There is definitely still room for challenges if timelines don't line up, but I am liking their cash position even more now.
The really big risk for GTHX right now is that phase 3 trial. Positive phase 2 signals really do not inform us on how well trilaciclib is going to do in the first-line setting. In principle, it should be a benefit, but we have no data in these patients. A phase 3 first-line trial is a big leap of faith. If it fails, then you can expect a whole lot of questions regarding trilaciclib's role in any tumor. But if it succeeds, I think there's a really high ceiling that they'd be launched toward.
Bottom-Line Summary
At the time of writing, the good news from the upcoming JPMorgan presentation has driven a 20% increase in market valuation of GTHX equity. Even still, they sit at a total market cap of just $150 million. So even with that large jump they remain priced at the level of an unproven developmental microcap. This doesn't quite jive with a company experiencing increased sales growth, several positive phase 2 signals in new indications, and the possible positive readout of a pivotal trial. There are few "screaming buys" in biotech, but this one comes really close for me, since the market is pricing it in as if they've fulfilled most of their downside risk already.
But if their phase 3 readout is positive (again, never a guarantee!), then an immediate move back to the $500 million market cap range is very much in play. The ceiling for GTHX is very high, making GTHX a rather lopsided benefit vs risk calculation. I'm glad I've increased my positions, as of right now.
For further details see:
G1 Therapeutics: New Financials And Big Data Readout Alert