G1 Therapeutics, Inc.

Good day. Thank you for standing by and welcome to the G1 Therapeutics Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. I would now like to turn the conference over to your host, Mr. Will Roberts, please go ahead, sir.

Thank you, Les. Good afternoon, everyone, and welcome to the G1 conference call to discuss our second quarter of 2021 financial results and business update. The press release on these financial results was issued after market closed this afternoon and can be found in the news section of our corporate website, g1therapeutics.com. On this call, the team will provide a business overview of the second quarter of 2021 and including an update on our launch progress in that period with COSELLA, which was approved by the U.S. Food and Drug Administration on February 12th, 2021, to decrease the incidence of chemotherapy-induced myelosuppression in adult patients when administered prior to a platinum and toposide-containing regimen or topotecan-containing regimen for extensive stage small cell lung cancer, or ESSCLC, and became available in the channel in early March of 2021. The question and answer session will follow the prepared remarks. Before we begin, I want to remind you that today's webcast contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements represent management's judgment as of today and may involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by these statements. For more information on such risks and uncertainties, please refer to our filings with the Securities and Exchange Commission, which are available from the SEC, or on our corporate website. Any forward-looking statements represent our views as of today, August 4, 2021. Joining me on the call today are Jack Bailey, our Chief Executive Officer, Jen Moses, our Chief Financial Officer, and Raj Malik, our Chief Medical Officer. With that, I'll turn the call over to Jack. Jack?

Thanks, Will. Good afternoon, everyone, and thank you for joining us on the call today. Today's headline from the second quarter is one of a continued focus on execution, both as it relates to our early readout of our ongoing commercial launch of COSELLA and as it relates to our clinical programs. Now, I joined G1 because of our shared commitment to improve the lives of people impacted by cancer. This core mission is tangible at G1, and I am confident in the G1 team as we seek to help as many people with cancer as we can and drive long-term value for our shareholders. We believe COSELLA is a paradigm-changing drug. It is the first and only multi-lineage myeloprotection therapy to offer proactive protection against the dangerous impacts of myelosuppression when treating small cell lung cancer patients with certain chemotherapy regimens. It allows oncologists treating small cell lung cancer patients to move away from treating significant myelosuppressive side effects individually with different drugs after the damage has been done, to instead enabling them to help decrease or prevent the occurrence of these side effects altogether with the proactive use of a single therapy. And during the second quarter, we continued to lay the groundwork for broad commercial access to COSELLA as we made progress toward our long-term goal of ensuring the availability of this important drug. But we also remain equally focused on COSELLA's next indications. During the second quarter, we initiated three new clinical trials with COSELLA, including a registrational trial in metastatic triple negative breast cancer and two phase two trials in patients with non-small cell lung and bladder cancer. This is in addition to the pivotal trial in colorectal cancer, dosing four, which was initiated in the first quarter. So in total, we now have two phase three registrational trials and three phase two trials ongoing with multiple readouts starting in the second half of 2022. Now we have a lot of important content to cover today. I will cover our commercial efforts for the second quarter of 2021, the first full quarter of COSELLA sales, and also provide an update on the leading and lagging indicators of COSELLA access and uptake that we introduced on the last call. Raj will then provide an update on some of our medical efforts and clinical milestones during the second quarter. He will also touch on the upcoming trial that we expect to initiate in the fourth quarter of this year. designed to further define the immune-based anti-tumor mechanism of action of COSELLA. Finally, Jen will provide the financial results for the quarter. Then I'll be back for some concluding comments. Now, before we discuss our results for the quarter, you likely saw that on Monday we announced that Soma Gupta left the organization for personal and professional reasons. We appreciate her contributions to the planning and the launch of COSELLA and certainly wish her the best going forward. We also announced at the same time that we have hired a new chief commercial officer, Andrew Perry, the former vice president of U.S. marketing at Beef Healthcare North America, a joint venture majority owned by GlaxoSmithKline. He is a proven leader and strategist with a history of driving consistent performance and commercial success and has tremendous commercial experience across a wide variety of specialties, including oncology. especially in areas including commercial launch strategy, execution, and co-promotion management. Andrew starts on August 16th, and I really look forward to having all of you meet him on our next business update. Now, turning our attention first to the commercial update, the launch efforts of the combined G1 and Beringer-Egelheim commercial team during the quarter resulted in us booking $2.5 million in net sales of Cosella for the quarter ending June 30th. Much of the last three months was spent with various community practices and hospital systems to gain inclusion on formulary and order sets. And this will remain a key focus for the coming months as well. For those not familiar with the process of formulary inclusion, it's multi-step requiring doctor advocacy in a practice or institution, having a successful P&T scheduled and decision taken, and then where they exist, incorporation into EHR order sets. It's worth noting that this year, primarily due to the slow open of the country, we have seen a number of these planned P&T meetings postponed, which can affect the speed of uptake. On our last call, we set up a variety of leading and lagging indicators to help you follow our progress quarter over quarter, which I will now cover. I'll focus in on four key areas, awareness, coverage and reimbursement, engagement, and utilization. Now, for awareness, both aided and unaided are solid. As of the end of June, our unaided awareness, or awareness of COSELLA without specific prompts, was at 56%. And aided awareness, based upon questions on familiarity with COSELLA and its indication, was at 77%. These are both above benchmark for this point in an oncology product law. Now regarding coverage and reimbursement, all of the payers have been covering COSELLA when written to label. Approximately 60% is Medicare Part B, 30% is commercial, and the remaining 10% is government and other forms of coverage. And we now have payer policies in place or pending that provide coverage for approximately 80% of unlabeled patient lives. Three of the top five U.S. payers have made positive formal coverage decisions within the first four months of product availability. Most importantly, we are not seeing any pushback in terms of reimbursement of filed claims. We have had formulary approval at 18 of our top 100 organizations, and 21 organizations have proceeded with inclusion of COSELLA into their order sets. Now, not all of our top 100 organizations have a P&T process for use, and some are still determining how to incorporate COSELLA into their order set. We expect additional approvals over the coming months. Now, as you may recall, we filed for our C code and permanent J code in March, and we recently received both. Our C code for pass-through hospital outpatient system use became effective on July 1, and our permanent J-code for all sites of care across all channels will become effective October 1. And as you saw this morning, we were just issued a new technology add-on payment, or NTAP, for COSELLA. It will also become effective for provider billing on October 1, 2021. The NTAP is an important tool that provides additional payment to hospitals above the standard DRG payment amount. Moving on to engagement perspective, as of the end of June, the team has achieved approximately 53% reach to our 2,500 targeted HCPs and made an additional nearly 4,000 targeted calls to other prescription-enabling functions, such as nurses and pharmacists, who are critical stakeholders in the supportive care space. At the end of Q2, almost 60% of these calls were still virtual. And while we believe the ratio of in-person to virtual calls will improve over time, we don't yet know how quickly or how many institutions will remain virtual in a post-COVID environment. As some of our oncology peer companies have recently stated, the oncology category is lagging most other therapeutic areas, many of which we're approaching pre-COVID levels. This is a macro issue which we are closely monitoring as we head into the next few months. This also underscores that continued maturation of our virtual capabilities will continue to be vital, as this will be an increasingly important and expected way to reach many in our target audience. From a utilization perspective, in the second quarter, 70% of our demand came from community hospitals or clinics, with the remaining 30% coming from academic hospitals. We received orders from 68 unique organizations up from 20 at the end of March. 28 of those are from our top 100 priority organizations, again, up from seven that had worked at the end of March. These priority organizations are essential to not only driving the breadth or trial of COSELLA into the community and hospital accounts across the US, but also the death or number of physicians in any given practice using a drug and encouraging others to do so. At this point, The breadth of adoption to date of COSELLA is directionally correct. However, we are increasing our efforts to drive depth across these accounts. Now before I close, I want to comment on some things we are seeing in the channel in the third quarter. We have seen some recent softness in orders, which we believe is addressable. As you've just heard, the performance metrics for the second quarter are solid, despite a slower than ideal opening of the country. We have good awareness The product is performing clinically as expected. Physician experience with the drug is excellent, and we have encouraging data that shows accounts that trial the drug are embracing it, so strong depth can be achieved. Our breadth, as I said, is directionally correct, but driving depth is the next challenge. We have some regions of the country that are outperforming on this dimension. However, others are underperforming. We will look to address this and drive more consistent and stronger execution across the country in all regions. So to summarize, our net sales for the second quarter were just over $2.5 million. Both aided and unaided awareness are above baseline for a product like this. We have moved through several operational hurdles, for example, the NCCN guidelines and payer reviews, while still having many P&T processes yet to complete. We have seen no issues in coverage and reimbursement, and we have received our C code, permanent J code, and NTAP, with the latter two being effective on October 1st of this year. We will continue to monitor the impact of COVID-19 variants on the opening of our target community practices and hospital systems and their willingness to receive reps into their offices. And while in-person selling is important, and also likely more critical for a buy-and-bill cell like Priscilla. We intend to remain as effective as possible, even in a virtual sales environment, and will continue to evolve and improve our virtual capabilities going forward. Now, with that, I'll turn it over to Raj for an update on our medical and clinical efforts during the second quarter. Raj?

Thanks, Jack, and good afternoon, everyone. I'm going to cover three topics. First, I will provide a brief update on a few of our medical affairs efforts during the quarter. I'll then provide an overview of the two phase two trials we initiated in the second quarter, and I'll introduce a new trial that we intend to initiate before the end of this year, designed to further define the mechanism of action of Casella. It's a small study, but one that we expect to generate a tremendous amount of important data. From a medical affairs perspective, we continue to execute on our medical communications plan during the second quarter, which includes ensuring broad visibility of our data among the medical community and identifying avenues for scientific dialogue. For example, during the quarter, we presented data and had a presence at virtual and live meetings including the International Society for Pharmacoeconomics and Outcomes Research, or ISPOR meeting, and ASCO. At ISPOR, we presented two posters describing the estimated economic impact of treating myelosuppression among patients with extensive stage small cell lung cancer. Of particular interest during the meeting was our poster that provided a cost-benefit model estimating the economic value of using COSELLA prior to chemotherapy in extensive-stage small cell lung cancer from a U.S. commercial payer perspective. The projected estimated total cost savings per patient is approximately $15,000, based on a projected reduction in myelosuppressive adverse events and their associated treatment costs with on-label use. Overall, the model indicates that Casella is an economically favorable innovation when addressing the incidence of myelosuppression in patients with extensive stage small cell lung cancer. We were also very active at ASCO, presenting posters, interacting with key opinion leaders in oncology via our virtual booth, and sponsoring a peer view CME program called Long Awaited Treatment Advances give cause for optimism in small cell lung cancer. Finally, as I mentioned on the last call, since the approval of Casella, we've had marked interest in our scientific platform and real-world evidence generation. We've been pleased in the interest in our investigator-initiated study program, and some of these studies will start later this year. Additionally, we are working with oncology centers so that they can assess the burden of chemotherapy-induced myelosuppression in their own practice. Switching now to clinical trial progress, our colorectal trial is ongoing, and we initiated three new trials during the second quarter. We discussed the Phase III triple negative breast cancer trial on our last call, so I'll discuss the two Phase IIs today. In May, we initiated Preserve4, a multicenter, randomized, double-blind, placebo-controlled phase 2 study of Casella administered prior to docetaxel in approximately 146 patients with metastatic non-small cell lung cancer in the second and third line setting who have previously been treated with a checkpoint inhibitor and chemotherapy. Non-small cell lung cancer is the most common type of lung cancer. accounting for 84% of the nearly 240,000 lung cancer diagnoses in the United States. For people diagnosed with metastatic disease, the five-year survival rate is only 7%. And unfortunately, despite improvements in therapy for metastatic non-small cell lung cancer, including the use of PD-1 or PD-L1 inhibitors, the majority of patients ultimately progress during or after treatment with immunotherapy and chemotherapy. The primary endpoint of the trial is to evaluate the effect of Casella on overall survival compared to placebo. Secondary endpoints will evaluate antitumor efficacy and the multi-lineage myeloprotection benefit of Casella compared to placebo, as in our other trials. and will also assess safety. We expect to see interim data in the first half of 2023. Next, in June, we initiated Preserve 3, a Phase 2 randomized open-label study of Casella administered with first-line platinum-based chemotherapy and the immune checkpoint inhibitor Avalumab as maintenance therapy in approximately 90 patients with untreated locally advanced or metastatic urothelial or bladder carcinoma. There are approximately 84,000 new cases of bladder cancer every year, and unfortunately the overall five year survival rate for metastatic bladder cancer is under 6%, a number that has not improved in the past 25 years. Patients are being randomly assigned one-to-one to one of two treatment arms. In one arm, they will receive gemcitabine platinum chemotherapy, followed by a Velumab maintenance therapy. In the other arm, they will receive Casella prior to chemotherapy, followed by Casella plus a Velumab maintenance therapy. The primary endpoint is to evaluate progression-free survival during the overall study. Key secondary endpoints evaluate other measures of antitumor efficacy. We will also evaluate the multi-lineage myeloprotective effects of Casella on chemotherapy-induced myelosuppression and safety. We expect to see data in the second half of 2022. Finally, as we develop Casella in the clinic, we must continually ensure that we conduct trials that we believe will maximize the value of Casella. I'm happy to announce an upcoming Phase II trial that we believe will help to do exactly that. The trial is designed to evaluate the immune-based antitumor mechanism of action of Casella by assessing changes in the tumor microenvironment after administration of Casella. In this clinical study, in patients with early-stage triple-negative breast cancer, we'll be looking at changes in the ratio of CD8 T-cells to T regulatory cells in the tumor microenvironment, along with a variety of other assessments of immune function following treatment with Casella to further define what we believe is a broadly applicable mechanism of action. We expect to announce initiation of this trial later this year, and we will provide more detail on the trial design at that time. Before I conclude, I'll briefly comment on our recent fast track designation for Casella in combination with chemotherapy in triple negative breast cancer. This is important as drugs with fast track designation are eligible for more frequent engagements with the FDA to discuss a clinical development plan, potential approval pathways and priority review, and rolling NDA submission, allowing us to submit completed sections of an NDA to FDA on a rolling basis. We look forward to working closely with the FDA as we advance COSELLA through this ongoing pivotal program. With that, I'll turn the call over to Jen for a review of the financial results for the second quarter of 2021. Jen?

Thanks, Raj, and good afternoon, everyone. As Will mentioned, full financial results for the second quarter of 2021 are available in our press release and 10Q. Today, I will focus on a few key points from our disclosures. Our total revenue for the second quarter of 2021 was $6.6 million, comprised of net product revenue of $2.5 million and license revenue of $4.1 million. For net product revenue, we realized a gross-to-net percentage in the mid-teens and expect to realize a gross-to-net percentage in the mid- to high-teens going forward. The main driver of variability in our gross-to-net adjustment is our percentage of sales to PHS organizations. Our license revenue was primarily related to a $3 million development milestone payment from our license agreement with CIMCIR, specifically related to the initiation of their bridging study of trilocyclib in first-line and second- and third-line extensive-stage small cell lung cancer. We benefit from this CIMCIR partnership in a variety of ways. Of course, this includes financial benefits such as current and future milestones and royalties, but we have also discussed their ability to participate in our clinical trials. CEMCIR is participating in both our CRC and TNBC studies, which we believe will help not only control cash burn on these studies, but also provide additional sites to help us continue to enroll this trial at an appropriate pace. Cost of goods sold for the three months ended June 30, 2021, was $0.8 million. As a reminder, the majority of the manufacturing costs related to COSELLA sales were incurred prior to FDA approval and therefore were recorded as R&D expense in prior periods. These previously expensed costs will continue to impact the presentation of cost of goods sold in future periods until initial prelaunch inventory is depleted and additional inventory is manufactured and sold. G1's research and development expenses for the second quarter of 2021 or $18.8 million, compared to $18.5 million for the second quarter of 2020. The increase in R&D expenses was primarily due to an increase in clinical trial spend, which is offset by a decrease in costs associated with the manufacturing of active pharmaceutical ingredients and drug product to support clinical trials, as well as a decrease in external costs related to discovery and preclinical development. Our selling, general, and administrative expenses for the second quarter of 2021 were $25.2 million, compared to $14.4 million for the second quarter of 2020. The increase in SG&A expense was largely due to an increase in commercialization activities, an increase in compensation due to increases in headcount, and increased spend on information technology, professional services, and other administrative costs. We ended the second quarter with cash and cash equivalents of $244 million, and we expect our current financial position to be sufficient to fund operations into 2023. With that, I'll turn the call back over to Jack for some closing comments.

Jack? Thank you, Jen, Raj, and Will. Now, before we close the call, I want to, as always, thank the people living with cancer for their inspiration. As we know, we're only a couple days past the World Lung Cancer Day, I'd like to specifically acknowledge those families who have experienced the impact of lung cancer, past and present, and the important work that thoracic oncologists, oncology nurses, and their staffs do to care for people living with it. We are well aware of the importance of the work we are doing at G1 for patients with lung cancer and that there is a great need for this first and only proactive multilineage myeloprotection drug. Now, before we move to Q&A, let me just recap what you've heard today. The combined commercial team is heavily focused on executing the plan in the second quarter and took early steps forward getting Cosella widely tried and adopted over the long term. We have no issues with reimbursement. We continue to hold a majority of our sales calls virtually. We do expect that to change over time, however, as the U.S. continues to open up, but we will monitor the impact of COVID variants. In instances where our target organizations stay virtual, we will continue to adapt to ensure that we are reaching them as effectively as possible. We initiated three new trials in the second quarter, a Phase III registrational trial in metastatic triple negative breast cancer and two Phase II trials in patients with non-small cell lung and bladder cancer. We also expect to initiate a new phase two trial late this year to further define the anti-tumor mechanism of action of COSELLA. As a result, we expect to have numerous data readouts starting the second half of next year. We recently received fast track designation for COSELLA in triple negative breast cancer, which is a regulatory pathway used to get important new drugs to the patient earlier by providing regulatory support and other benefits. And finally, Our cash runway guidance is unchanged from our last setup guidance, taking us into 2023. I thank you for your time this afternoon. We will speak again in this format on the November call, though I'm sure we'll see many of you before then during the late summer and fall slate of virtual healthcare conferences and non-deal roadshows. Hopefully we can see many of you in person in due time as well. With that, I'll close the call and turn it over to Q&A. Operator, would you please remind our listeners How to ask a question.

Thank you, sir. And as a reminder, to ask a question, please press the star and the number one key on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Your first question comes from the line of Chad Messer from Medium and Company. Your line is open.

Good evening. And congrats on a solid quarter, early in a lot of milestones being met. I'm wondering if you could educate us a little bit further on the importance of the NTAP decision that you reported this morning. There was a an actual amount that's sort of a maximum reimbursement amount that was, uh, that was given. I, I, this is my own naivety, but maybe you can put some perspective on that and maybe talk about that importance as well as, um, if there's any more you can say about the C and J codes, which are also recently, um, granted, uh, obviously at this point in launch, um, getting reimbursed is a pretty major factor to uptake.

Yeah, thanks, Chad. I appreciate the questions. You know, when you look at both the NTAP, the C code, and the J code, I mean, it all speaks to, frankly, what we would view as a very positive reimbursement environment. All of those, of course, are via CMS. We also have the commercial market, which, as we mentioned, Every payer is allowing claims for Cosella to flow through according to label, and several have written formal policies. So I think it all speaks to your point. What is normally one of the biggest concerns early in a product launch is coverage and reimbursement. We feel very, very good. My personal experience says this is as good as I've seen it in probably a decade or a decade and a half for a new product, whether it's commercial or Medicare patients. Now in terms of the NTAP itself, it's more specific for those minority of patients that will be started in the inpatient setting. So that is a very small percentage of COSELLA patients based upon our market research. But when you couple that with the C code and then the J code, basically you've got the entire waterfront covered. So that's what I would share on the NTAP. It's helpful, but it's really, when you look at it in the totality, It's really just an extremely positive coverage and reimbursement environment.

All right. Great. Thanks. Very helpful, and congrats again. Thank you, Chad.

And your next question comes from the line of Joseph Thome from Cohen & Company. Your line is open.

Good evening, and thank you for taking our questions. Maybe the first one, it was indicated that some areas seem to be outperforming and maybe others are underperforming. Are there any specific reasons why that might be happening? Is it based on geography or maybe some sites are just better at using supportive care agents or some more clinical trial sites? Any sort of additional information on that would be helpful. And then maybe on to TMDC. Obviously, we're expanding development of Kinsella here with that upcoming study. Will you then be looking to kind of pair Kinsella with other maybe approved agents in the space, like an ADC? I know Tredelby was approved last year. Would this be a reasonable step forward? Thanks.

Sure. I'll handle the first one, and then I'll flip it over to Rutherford on the second one. You know, this is really more on the execution side, Joe. You know, certainly there's no geographic boundaries when it comes to small cell lung cancer. So at day's end, this is really execution. We're aligned with our partner on that. We know what the issues are. Some of it requires training. Some of it's more attention. But the bottom line is it is solvable, and we are working forward to making sure we solve that across the country. In terms of the TMBC study, potential thoughts on that, let me turn that to Raj.

Yeah, hey, Joe. Yeah, so that MOA TMBC study we're very excited about to further define the mechanism. There's a lot of data on the effect of Casella on Tregs in particular and CDA to Treg ratio, so that will be our focus. And we'll talk more about that as we near initiation of the study. Regarding ADC, yes, we're definitely interested in exploring that study as well since this is a class of drugs that's clearly becoming entrenched in a number of spaces, including TMBC.

Great. Thank you, and congratulations. Thank you.

And your next question comes from the line of Tom Schrader from BTIG. Your light is open.

Good afternoon. Congratulations. Not an easy time to launch a drug. I had a couple of questions on the clinical trials you announced. What is your sense about how many trials you're going to have to run? If you show myelopreservation in second line, third line, non-small cell lung cancer, do you think you would get an approval for first line as well, or is there just no way to know? Just your sense, how many trials you have to do.

Yeah, it's a fair question, Tom. We appreciate it, and I think a lot of folks have tried to figure this one out. I don't think we have a great answer for you beyond we really have a tumor agnostic vision for COSELLA, and so we're going to continue to execute on these studies to try and build up that repository of proof across an array of different regimens and tumor types. So whether or not at some point regulators choose to give it a broader label. It's tough to predict. What I would say is, you know, a lot of the payers in the Compendia listings, they'll take a different perspective and begin to reimburse. So, I think we have to separate the two, sort of a formal regulatory label change after so many studies versus getting reimbursement with a broader label. So, but we're going to continue to execute on these. And again, we're encouraged with things like the fast track designation where we can continue to engage with the regulatory bodies. that will make sure we can get COSELLA brought to market for these broader applications.

Great. And a second question on the urothelial trial. So you're maintaining COSELLA during the EvaluLab maintenance only? What's going on there? Is there enough COSELLA to have efficacy? Are CDK4-6s active here? Or just a thought on extending the COSELLA use.

Hey, Tom, this is Raj. Hi, Raj. So sorry if that was not clear in my remarks. The design is patients get up to six cycles, actually, of GEMS platinum. And then if the disease has not progressed, they will receive a Valumab as maintenance. So that is the control arm. We're going to get Casella with gemcitabine platinum as well as a Valumab maintenance. So it's throughout the duration of treatment in terms of Casella. There's actually, you know, we have data preclinically, and all of our mechanism of action data suggests that, you know, there's a good rationale for combining it with, you know, with a checkpoint inhibitor, both alone as well as in combination with chemo and checkpoints. So that's the rationale for the design.

All right, great. Thanks.

And your next question comes from the line of David Merring-Garten from Redbush Securities. Your line is open.

Hey, thanks for taking the questions. Maybe if I could, a little bit more detail on the in-tap payment. Specifically, where does that place you relative on the physician's reimbursement relative to other new LASDAs or other white cell support agents? And then a second question on the bladder cancer study. Are there, I mean, obviously you'll be watching for myelosuppression in there. Is there a plan or a scenario where if you don't necessarily see, you know, STAT-seq benefit on progression-free survival, is there a mechanism to maybe expand the study or to, you know, look at a myelopreservation endpoint to, you know, to Tom's point? you accelerate the process of getting a broader approval in multiple tumor types for at least myelopreservation? Thanks.

Yeah, I'll take the first one on the NTAP, and then I'll have Raj speak a little bit more on the bladder. Yeah, on the NTAP, I mean, first of all, if you look at the economics, especially for the inpatient setting where, again, the NTAP is more applicable, whether you look from a net cost recovery or from an administration fee, the economics are very favorable for COSELLA, The NTAP really avoids, and the whole intent of it when it started years ago, was to not penalize in that DRG setting where there's one set payment and new innovation comes in, and the healthcare system may avoid using it, even if it's got the potential to improve patient outcomes, et cetera. So from our standpoint, I would say it just continues to provide COSELLA with favorable economics in that inpatient setting. But again, I would just go back to the broader issue is coverage and reimbursement is really the key takeaway. We've got, frankly, a really optimal scenario here, whether it's for those Medicare patients or for those commercial patients. But in terms of the bladder, let me have Raj speak to that.

Yeah, hey, David. Yeah, so this is for two comments I'd make. The first is that this is an open-label study, so obviously we would be looking at the data, and if there is a strong myelosignal, I think that is certainly a possibility. The second is that in our experience to date, when there is a myelosignal, it's apparent in relatively small numbers of patients, and this is 90 patients, 45 per arm.

efficient to actually pick that up as well got it yeah yeah yeah it's i mean part of that was you know what is the kind of background rate on myelosuppression in bladder patients so i assume it's sufficient to see a delta then as as you mentioned in a in a short order or with fewer patients yeah so this is really both it includes both gemcitabine cisplatin and carbo so cis is the

We get Carbo. And they're both, you know, both obviously myelosuppressive. So, yeah, I think it's a reasonable number of patients to, you know, to get a read on that.

Got it. Thank you. Thank you, David.

Once again, if you would like to ask a question, press start and the number one key on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. And your next question comes from the line of Tony Butler from Ross Capital. Your line is open.

Yes, thanks very much. Just really two questions, and they're on the clinical trials, which are enrolling and ongoing. I noticed, Raj, in clinicaltrials.org, that Preserve3 and bladder cancer currently has only one side enrolling patients, and I wondered if you would speak to that. And then also with respect to Preserve 4 in NSCLC, there are four sites. It seems that there's a tremendous amount of activity going on, certainly in Preserve 1 and Preserve 2. So I just wanted, and I realize they're new, and I know having four trials ongoing can be cumbersome for a small company. But I appreciate your thoughts on the site enrollments. Thank you.

Yeah, hey, Tony. So, yeah, no, we are, you know, both studies, so one initiated in May, the other one in June. So we're very much in the site activation part of the study. And the other point actually is that there are more sites than are currently visible on clintrials.gov. It always takes a couple of days for them to be updated, and that's a continuous process. So, yeah, but patients are being enrolled. We've enrolled patients on the non-small cell lung cancer study, and we expect the same to happen in bladder soon.

Appreciate your comments.

Sure. Thank you, Tony.

I'm showing no further question at this time. I would now like to turn the conference back to Mr. Jack Bailey. Please go ahead, sir.

Thank you, Operator. We are actively bringing COSELVA to patients with extensive stage small cell lung cancer and conducting these intelligently designed clinical trials to maximize the future value and applicability of this unique drug in a variety of cancers. As always, I look forward to keeping you updated as we move forward. Thank you for joining us today. Have a good afternoon.

And this concludes today's conference call. Thank you all for your participation and have a wonderful day. You may all disconnect.