RESEARCH TRIANGLE PARK, N.C. - In a significant move within the pharmaceutical industry, Pharmacosmos A/S, a Danish company specializing in treatments for iron deficiency and iron deficiency anemia, has entered into a definitive agreement to acquire G1 Therapeutics (NASDAQ:GTHX), Inc., a commercial-stage oncology company.
The acquisition, announced today, is valued at approximately $405 million in cash, or U.S. $7.15 per share, which is a 68% premium over G1's closing share price on Monday and a 133% premium over the 30-day volume weighted average price.
Pharmacosmos will commence a tender offer to acquire all outstanding shares of G1 Therapeutics common stock at the agreed price. The transaction is expected to close late in the third quarter of 2024, subject to customary closing conditions and regulatory approval, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Upon completion, G1's common stock will be delisted from public trading.
This strategic merger aims to enhance the availability of COSELA® (trilaciclib), G1's FDA-approved drug for reducing chemotherapy-induced myelosuppression in patients with extensive stage small cell lung cancer (ES-SCLC). Pharmacosmos's resources and expertise in hematology and supportive care are expected to help maximize COSELA's commercial reach and patient access in the ES-SCLC market.
Jack Bailey, CEO of G1 Therapeutics, emphasized the benefits of the merger for patients and stakeholders, highlighting the potential to improve access to the drug for cancer patients. Tobias S. Christensen, CEO of Pharmacosmos, also noted the transformative nature of the acquisition for his company, with plans to extend COSELA's availability beyond the U.S. and China.
The transaction is fully financed through Pharmacosmos's existing cash and credit facilities. MTS Health Partners, L.P. and Arnold & Porter Kaye Scholer LLP are advising Pharmacosmos, while Centerview Partners LLC, Ropes & Gray LLP, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. are advising G1 Therapeutics.
The announcement comes as G1 Therapeutics prepares to release its second quarter financial results, though a previously scheduled conference call to review the results has been canceled due to the pending acquisition.
This report is based on a press release statement.
In other recent news, G1 Therapeutics experienced a series of critical developments. Following the announcement that the combination treatment of Trilaciclib with gemcitabine and carboplatin did not show a significant overall survival benefit, Needham and H.C. Wainwright both revised their price targets for the company.
Despite this, the company reported a 34% increase in net sales year-over-year and a 4% increase in vial volume growth for Cosela in their first-quarter earnings call for 2024, maintaining a revenue guidance of $60 million to $70 million for the year.
G1 Therapeutics also decided not to continue the development of Trilaciclib outside of its use in small cell lung cancer (SCLC), choosing instead to focus on the commercial execution of its products. The company's Phase 3 PRESERVE 2 trial of Cosela in triple-negative breast cancer did not meet its primary endpoint, but positive results were reported from a Phase 2 clinical trial for Trilaciclib in combination with a TROP2 ADC.
In addition, G1 Therapeutics secured a licensing deal with Pepper Bio, potentially bringing in up to $135 million in payments. These developments have led to strategic realignments within the company, with a renewed focus on expanding its extensive-stage small cell lung cancer business and exploring other applications for Trilaciclib. As a result, G1 Therapeutics expects to achieve profitability in the second half of 2025.
InvestingPro Insights
In light of the acquisition news, G1 Therapeutics, Inc. (GTHX) shows a mix of financial metrics and market performance that investors might find interesting. The company's market capitalization stands at $222.2 million, reflecting its current valuation in the market. Despite not being profitable over the last twelve months, G1 Therapeutics has exhibited impressive gross profit margins of 91.89%, suggesting that the company maintains a strong ability to control its cost of goods sold relative to sales.
An InvestingPro Tip that stands out is the high shareholder yield, which could be a signal of the company's commitment to returning value to its investors. Additionally, the fact that four analysts have revised their earnings upwards for the upcoming period indicates a positive sentiment about the company's future performance. These revisions could be tied to the potential for COSELA®, the drug at the heart of the acquisition, to achieve greater commercial success under the new ownership structure.
Investors should note that while analysts anticipate a sales decline in the current year, the company has experienced a robust revenue growth of 46.55% over the last twelve months as of Q1 2024. This growth, coupled with the recent acquisition news, may factor into the company's future trajectory. For those interested in further analysis and metrics, there are additional InvestingPro Tips available at https://www.investing.com/pro/GTHX, which could provide deeper insights into G1 Therapeutics' financial health and market potential.
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