G1 Therapeutics(GTHX) - 2024 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited Q1 2024 financial statements report a net loss of $10.2 million, with total assets at $102.0 million and sufficient liquidity for the next 12 months Condensed Balance Sheets As of March 31, 2024, total assets were $102.0 million, down from $121.5 million, primarily due to reduced cash and marketable securities Condensed Balance Sheet Data (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $19,887 | $32,218 | | Marketable securities | $45,299 | $49,938 | | Total current assets | $95,839 | $114,948 | | Total assets | $102,026 | $121,540 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $32,603 | $29,716 | | Loan payable, net of current portion | $37,147 | $51,557 | | Total liabilities | $74,287 | $86,154 | | Accumulated deficit | $(790,204) | $(779,985) | | Total stockholders' equity | $27,739 | $35,386 | | Total liabilities and stockholders' equity | $102,026 | $121,540 | Condensed Statements of Operations Q1 2024 total revenues increased to $14.5 million, operating expenses decreased to $23.5 million, resulting in a net loss of $10.2 million Q1 2024 vs. Q1 2023 Statement of Operations (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Product sales, net | $14,079 | $10,492 | | License revenue | $397 | $2,454 | | Total revenues | $14,476 | $12,946 | | Cost of goods sold | $1,079 | $1,459 | | Research and development | $7,318 | $15,480 | | Selling, general and administrative | $15,127 | $21,753 | | Total operating expenses | $23,524 | $38,692 | | Loss from operations | $(9,048) | $(25,746) | | Net loss | $(10,219) | $(27,595) | | Net loss per share, basic and diluted | $(0.20) | $(0.53) | Condensed Statements of Stockholders' Equity Stockholders' equity decreased to $27.7 million by March 31, 2024, primarily due to the $10.2 million net loss - The primary driver for the change in stockholders' equity during Q1 2024 was the net loss of $10.2 million[14] Condensed Statements of Cash Flows Q1 2024 saw net cash used in operations reduced to $8.9 million, with a net decrease in cash of $12.3 million Cash Flow Summary (in thousands) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,898) | $(29,053) | | Net cash provided by investing activities | $5,289 | $2,910 | | Net cash used in financing activities | $(8,722) | $(214) | | Net change in cash, cash equivalents and restricted cash | $(12,331) | $(26,357) | | Cash, cash equivalents and restricted cash, end of period | $20,137 | $68,550 | Notes to Unaudited Condensed Financial Statements Notes detail business operations, accounting policies, financial instruments, loan covenants, and a new licensing agreement for lerociclib - The company's primary product is COSELA® (trilaciclib), approved in the U.S. and China for myeloprotection in patients with extensive-stage small cell lung cancer (ES-SCLC)[19] - Management has evaluated its financial condition and concluded that its cash, cash equivalents, and marketable securities as of March 31, 2024, are sufficient to fund planned operations for at least the next 12 months, despite a history of net losses and an accumulated deficit of $790.2 million[22] - On April 30, 2024, the company entered into a licensing agreement with Pepper Bio, Inc. for lerociclib, which includes upfront payments and potential development and commercial milestones up to $135.0 million, plus double-digit royalties[117] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses COSELA® commercialization and pipeline advancement, with Q1 2024 showing increased product sales, reduced operating expenses, and sufficient liquidity Overview G1 Therapeutics focuses on commercializing COSELA® and expanding trilaciclib's applications, particularly in mTNBC and with ADCs - The company's primary commercial product is COSELA® (trilaciclib), approved in the U.S. and China[120] - Core development paths for trilaciclib are focused on: (1) triple negative breast cancer (TNBC) and (2) combinations with antibody-drug conjugates (ADCs)[121] - Final overall survival (OS) results for the registrational Phase 3 trial of trilaciclib in mTNBC are expected in late Q2 2024[133] Results of Operations Q1 2024 total revenues increased by 12% to $14.5 million, while operating expenses decreased by $15.2 million, significantly reducing the loss from operations Comparison of Operations (in thousands) | Line Item | Q1 2024 | Q1 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Product sales, net | $14,079 | $10,492 | $3,587 | 34% | | License revenue | $397 | $2,454 | $(2,057) | -84% | | Total revenues | $14,476 | $12,946 | $1,530 | 12% | | Research and development | $7,318 | $15,480 | $(8,162) | -53% | | Selling, general and administrative | $15,127 | $21,753 | $(6,626) | -31% | | Loss from operations | $(9,048) | $(25,746) | $16,698 | -65% | - The $3.6 million (34%) increase in net product sales was primarily due to increased sales volume from ongoing commercialization efforts[156] - R&D expenses decreased by $8.2 million (53%), mainly due to a $7.6 million reduction in clinical program costs[159] - SG&A expenses decreased by $6.7 million (31%), primarily due to reductions of $3.7 million in personnel costs and $1.8 million in commercialization activities[161] Liquidity and Capital Resources As of March 31, 2024, the company held $65.2 million in cash and marketable securities, deemed sufficient for 12 months, while complying with loan covenants - The company expects its cash, cash equivalents, and marketable securities of $65.2 million (as of March 31, 2024) to be sufficient to fund planned operations for at least the next 12 months[138][164] - The company is required to comply with financial covenants under its Loan Agreement with Hercules, including a minimum cash requirement (35% of outstanding debt) and a conditional borrowing base tied to trailing three-month net product revenue[164][170] - During Q1 2024, the company repaid $8.2 million in principal on its loan with Hercules The outstanding principal was $41.8 million as of March 31, 2024[171] Cash Flow Summary (in thousands) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,898) | $(29,053) | | Net cash provided by investing activities | $5,289 | $2,910 | | Net cash used in financing activities | $(8,722) | $(214) | Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate risk on its cash, investments, and variable-rate loan, but does not anticipate a material impact from interest rate changes or inflation - The company has interest rate risk from its cash equivalents, marketable securities, and its variable-rate loan with Hercules[187][188] - The interest rate on the Hercules loan is variable, equal to the greater of (prime + 5.65%) or 9.15% As of March 31, 2024, $41.8 million of principal was outstanding[188] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting - Management concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective at the reasonable assurance level[191] - No changes occurred during Q1 2024 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[192] PART II OTHER INFORMATION Risk Factors No material changes to risk factors were reported from those disclosed in the 2023 Annual Report on Form 10-K - There have been no material changes in the risk factors from those set forth in the 2023 Form 10-K[194] Other Information No directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements during Q1 2024 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during Q1 2024[195] Exhibits This section lists exhibits filed with the Form 10-Q, including employment agreement amendments, certifications, and XBRL data