G1 Therapeutics: Without Cash, The CRC Failure Becomes A Tougher Hurdle (GTHX)

I covered G1 Therapeutics (NASDAQ:GTHX) in November, when they were talking about when to topline their colorectal cancer trial. This was PRESERVE 1, the phase 3 metastatic colorectal cancer (mCRC) trial of trilaciclib, which was fully enrolled in June and was slated to topline in 1H2023.

I called this a high-risk/reward binary event; the risk part comes from the lack of phase 2 data, and the reward part comes from the fact that mCRC is a 5x larger market than trilaciclib’s currently approved indication. There’s also the fact that trilaciclib works in a tumor-agnostic manner, and in non-mCRPC settings, it has shown us excellent data. All these things made me look at GTHX with some hope.

I was, therefore, shocked to notice today that the stock is down 60% from its November prices, and the reason is that the pivotal PRESERVE 1 trial was halted.

PRESERVE 1 was a randomized, placebo-controlled pivotal Phase 3 trial of trilaciclib in 326 patients with metastatic CRC receiving first line trilaciclib or placebo administered prior to FOLFOXIRI (a combination of fluorouracil (5-FU), folinic acid, oxaliplatin and irinotecan) and bevacizumab. While no phase 2 data was available for this indication, data presented from a TNBC trial showed that trilaciclib may have a role in T-cell infiltration independent of tumor type. So there was some hope of success in mCRC.

However, halting the trial on poor efficacy changed all that. Data showed that the placebo arm of the study, PRESERVE 1, outperformed “the trilaciclib arm for anti-tumor efficacy, including overall response rate (ORR) and preliminary measures of survival.” As it says on on the registry:

Terminated (Despite achieving co-primary endpoints & other secondary measures of myeloprotection & tolerability, early anti-tumor efficacy data favor patients receiving placebo. Given the low likelihood of achieving PFS & OS endpoints, G1 decided to discontinue)

Thus, this was an interesting situation where the trial met the co-primary endpoints with statistical significance, but was then abandoned because it did not attain certain survival benefits and other clinical measures. Trilaciclib is primarily a myelopreservation agent, and on this front this was a successful trial.

In their March earnings call, the company provided the following insight into the data we saw with PRESERVE 1:

This adverse effect on anti-tumor efficacy appears to be limited to this chemotherapy regimen used in colorectal cancer as other clinical trials of trilaciclib in combination with different chemotherapies in patients with extensive-stage small cell lung cancer and triple-negative breast cancer did not demonstrate this adverse anti-tumor efficacy signal. In fact, in the Phase II triple-negative breast cancer study, we saw the opposite – a statistically significant improvement in overall survival in patients receiving trilaciclib compared to placebo.

We are conducting a variety of analyses to understand the results. For example, we are looking into the possibility that trilaciclib may have had an unanticipated negative interaction with 5-FU which would not have been identified as a risk in any of the preclinical assessments we performed. We look to communicate the results of these and other analyses over the coming few months.

Two months later, in their May earnings call, upon being asked for such updates, the company did not offer much clarity:

… we are actually doing a number of investigations currently. And so when we have those data we will obviously release them.

The analyst asked an interesting question about data generated by certain trials that apparently showed an antagonistic effect between CDK4/6 inhibitors (like trilaciclib) and the 5-FU regimen given in the mCRC trial. The analyst asked whether GTHX saw anything similar in their preclinical models. The company said the following:

Yes. So, specifically for preclinical work, I mean we had done with 5-FU in combination, actually it was a checkpoint inhibitor was trila, which showed an improvement in efficacy. And we of course, had lots of data with a few showing that myeloprotection benefits. So, again, there was no – there was certainly no data pre-clinically to suggest that we would see what we saw in colorectal. And we also did that work with other chemo therapies as well. We are definitely expanding our work with looking at different chemotherapies now given this data to better understand it.

Now, there’s actually research that shows the antagonism between CDK4/6 and chemo, as well as the synergy between them. The result is, thus, inconslusive. As some research says:

Due to their impact on the cell cycle, CDK4/6 inhibitors (CDK4/6i) have been hypothesized to antagonize the anti-tumor effects of cytotoxic chemotherapy in tumors that are CDK4/6 dependent. However, there are multiple preclinical studies that illustrate potent cooperation between CDK4/6i and chemotherapy.

Indeed, three approved CDK4/6 inhibitors, palbociclib, ribociclib, and abemaciclib have been shown to “enhance, rather than antagonize, chemotherapy cytotoxicity when combined with camptothecin, carboplatin, cisplatin, docetaxel, doxorubicin, 5FU, gemcitabine, irinotecan, paclitaxel, and temozolomide.” As we can see, this list also includes 5-FU, the same regimen involved in PRESERVE 1.

Thus, there seems to be hope that whatever it was, it was not some unhappy interaction between chemotherapies in general and trilaciclib, so other trials, notably the one in TNBC, will not suffer a similar fate. As the company pointed out:

Finally, our Phase III trial in triple-negative breast cancer is based on the foundational data from our Phase II trial that showed a statistically significant survival advantage for patients enrolled in both trilaciclib arms compared to placebo.

Thus, the mCRC thing may be an outlier – too bad they didn’t do a phase 2 in this indication.

Anyway, the company has shut down that trial, and cut some 30% of its workforce to preserve cash. Its ES-SCLC revenue from Cosela has improved, as I discussed even in my last article. What we can look forward to now are improving revenues from this indication, and progress with the TNBC indication.

Financials

GTHX has a market cap of $143mn, and a cash balance of $116mn. Revenue was $12.9mn. Cost of goods sold was $1.5mn. R&D was $15.5mn, while G&A was $21.8mn. Thus, the company’s cash position is quite precarious, and they are making some efforts, for example by “monetizing the future royalties and milestones from Simcere which brings us $30 million as of the current quarter and up to $48 million in total.”

Risks

GTHX has never done too well with ES-SCLC, one reason for which is the small market size, another is the initial hiccup with its commercial partner, and the third is, like we saw earlier, the small company’s lack of adequate networking capabilities to sign up large distributor partners. The cash position is poor, and the failure in the one indication has hurt them. Whatever may have been the reason for the failure, management may be blamed, perhaps rightly so, for their failure to do a phase 2, or an early basket trial, in mCRC, in order to avoid just this sort of expensive failure.

Bottomline

GTHX stock is trading very low right now, and there are reasons some might consider it a buy. There is certainly room for improvement here. However, I am going to avoid, given my earlier positive experience with the stock. I do not want to push my luck.