In a June 26 research note, analyst Tony Butler reported that ROTH Capital Partners initiated coverage on G1 Therapeutics Inc. (GTHX:NASDAQ) with a Buy rating and a $55 per share price target. The stock is currently trading at about $24.28 per share.
Butler reviewed the status of the oncology therapeutics firm's three primary candidates.
G1's lead drug is trilaciclib, for which it is currently filing a new drug application (NDA) with the U.S. Food and Drug Administration for its use in nonsmall cell lung cancer. The company is expected to complete the application in Q2/20 and commercially launch the therapeutic next year.
For the use of trilaciclib in that indication in the U.S., ROTH models a 75% chance of approval and if approved, peak sales of $500 million. In triple-negative breast cancer, ROTH models $500 million of peak sales and in colorectal cancer, $600 million, both with market entry in 2025-2026.
Butler described trilaciclib as a "CDK4/6 inhibitor that transiently halts cell cycle progression in the bone marrow to ameliorate chemo-induced toxicities. "The primary conclusion from the pooled data support that trilaciclib prior to chemotherapy significantly reduced chemotherapy-induced myelosuppression and was associated with a substantial reduction in high grade hematological treatment-emergent adverse events with no detrimental effects on progression-free survival [PFS] or overall survival [OS]. However, PFS and/or OS were not improved with treatment with trilaciclib. Trilaciclib reduces the toxicity of chemotherapy in SCLC." Butler noted.
The North Carolina-based biopharma's second asset in clinical development is rintodestrant. It is an oral, selective estrogen receptor degrader (SERD), for estrogen receptor (ER) positive, HER2 negative breast cancer. "An oral SERD that can rapidly reach steady state, may have utility in ER positive breast cancer," Butler wrote. This is based on the fact that the combination of fulvestrant, an intramuscular SERD, and palbociclib is a proven therapeutic in the indication. Fulvestrant, which was approved in 2002, attained blockbuster status in 2018, but it is associated with "poor physiochemical properties that require monthly injections leading to less than optimal activity."
With an estimated market size of ER positive, HER2 negative advanced/metastatic breast cancer patients in the U.S and Europe, ROTH projects peak revenue from both places of $2.1 billion. It projects a rintodestrant launch in 2025-2026.
G1's third asset is lerociclib, which is also a CDK4/6 inhibitor and which the company is looking to outlicense and market in Europe with a partner, as a treatment for small cell lung, triple-negative breast and colorectal cancers. Recently, G1 entered an exclusive licensing agreement for lerociclib in the Asia-Pacific region, excluding Japan, with Genor Biopharma, a Chinese biopharma.
Finally, Butler reviewed G1 Therapeutics' financial situation. The company had $242.4 million in cash and cash equivalents at the end of March 2020. Also, it recently entered an agreement with Hercules Capital for up to $100 million in funding for commercialization and further advancement of trilaciclib. The agreement calls for payments to G1 in four tranches, the first of which is $30 million, to be paid upon closing. G1 will receive the remaining tranches when it completes certain milestones.
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Disclosures from ROTH Capital Partners, G1 Therapeutics, Inc., Company Note, June 26, 2020
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of G1 Therapeutics, Inc. and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
