On Tuesday, H.C. Wainwright adjusted its outlook on G1 Therapeutics (NASDAQ:GTHX) following the company's recent clinical trial results. The firm's analyst reduced the price target on the stock to $3.00 from the previous $9.00, while still maintaining a Buy rating on the shares.
The modification came after G1 Therapeutics announced on Monday that its Phase 3 PRESERVE 2 study of Cosela in triple-negative breast cancer did not meet its primary endpoint. The study was designed to assess the efficacy of Cosela, a transient intravenous CDK4/6 inhibitor, in patients undergoing first-line gem/carbo chemotherapy for locally advanced unresectable or metastatic triple-negative breast cancer (TNBC).
The drug is currently approved for reducing chemotherapy-induced myelosuppression in patients with extensive-stage small cell lung cancer (ES-SCLC) and is recommended in two NCCN Guidelines.
Despite the trial's failure to demonstrate statistical significance in overall survival (OS) in the intent-to-treat population, with a hazard ratio of 0.91 and a p-value of 0.884, the median OS was slightly higher in the Cosela arm at 17.4 months compared to 17.8 months in the control arm. Additionally, the treatment showed a consistent safety profile with prior studies, and no new safety signals were reported.
G1 Therapeutics highlighted the continued clinical evidence of myeloprotection with Cosela, noting that severe neutropenia occurred in only 8% of patients treated with Cosela versus 29% in the control group. Furthermore, the rates of Grade 3/4 anemia and red blood cell transfusions were lower in the Cosela arm of the trial.
In light of these results, G1 Therapeutics plans to present the detailed findings from the PRESERVE 2 trial at a future medical conference. H.C. Wainwright has removed the anticipated launch of Cosela in TNBC from their financial model, which is reflected in the lowered price target.
In other recent news, positive results were reported from a Phase 2 clinical trial for trilaciclib in combination with a TROP2 ADC in patients with metastatic Triple Negative Breast Cancer. The data showed an improvement in overall survival and a reduction in adverse events. These results will be presented at the upcoming 2024 American Society of Clinical Oncology meeting.
G1 Therapeutics' first-quarter earnings call for 2024 reported a 34% increase in net sales year-over-year, along with a 4% increase in vial volume growth for their product, COSELA. The company maintains a revenue guidance of $60 million to $70 million for the year. G1 Therapeutics also secured a licensing deal with Pepper Bio, which could bring in up to $135 million in payments.
Following these developments, the company aims to concentrate on expanding its extensive-stage small cell lung cancer business and exploring other applications for trilaciclib. G1 Therapeutics is also taking strategic steps to streamline operations and extend its cash runway, supporting the company's path to profitability in the second half of 2025.
InvestingPro Insights
Following the recent clinical trial outcomes for G1 Therapeutics, an analysis of real-time data from InvestingPro shows a complex financial landscape for the company. With a market capitalization of $116.06M and a notable gross profit margin of 91.89% over the last twelve months as of Q1 2024, GTHX demonstrates a strong ability to retain earnings from its revenue. However, the company's performance metrics also reveal challenges, including a negative P/E ratio of -3.83, indicating investor concerns about future earnings potential.
InvestingPro Tips highlight that GTHX holds more cash than debt on its balance sheet and that four analysts have revised their earnings upwards for the upcoming period, suggesting a potential turnaround in investor sentiment. Additionally, the stock's current price is significantly below the fair value of $7.5 USD as estimated by analysts, with InvestingPro's own fair value assessment at $3.04 USD. This disparity may present an opportunity for investors considering the company's strong gross profit margins and the fact that liquid assets exceed short-term obligations.
For those interested in a deeper dive into GTHX's financial health and future prospects, InvestingPro offers additional tips and insights. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and explore the full range of 12 additional InvestingPro Tips for a comprehensive analysis.
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