G1 Therapeutics Inc. Plans To Go Public In Its Early Stages

G1 Therapeutics Inc. (Pending:GTHX) filed its S-1/A with the Securities and Exchange Commission for its upcoming initial public offering.

We highlighted the deal on our IPO Insights platform.

The company intends to sell 6.25 million shares at a marketed price range of $15 to $17. It has an additional 937,500 shares as an overallotment option for its underwriters. If GTHX prices at the midpoint of its proposed range, it could have a market capitalization of $442M.

The underwriters for the IPO are J.P. Morgan, Cowen and Company, Needham & Company and Wedbush PacGrow.

Business overview

(Click on image to enlarge)

(www.g1therapeutics.com/pages/pipeline/pi...)

G1 Therapeutics Inc. is a biotechnology company that is focused on developing innovative therapies for the treatment of cancer. The clinical-stage company has two primary products that are cyclin-dependent kinase inhibitors for CDK4 and CDK6. Its most advanced product candidate is Trilaciclib, which is an intravenous inhibitor of CDK4 and CDK6 while preserving HSPC and improving the functionality of the immune system during chemotherapy. Initial data from the company's clinical phases is expected to be released in early 2018. The company's second product candidate, G1T38, is expected to enter into phase two clinical trials in 2018. The company is based in North Carolina.

Executive management team

Mark A. Velleca, M.D., Ph.D. has served as the president, chief executive officer and board member of G1 Therapeutics since May 2014. Before that, Velleca co-founded and served as the senior vice president of CGI Pharmaceuticals Inc. from 1999 to 2010 until its acquisition by Gilead. He then served as a senior advisor to Gilead from 2010 until April 2012. From April 2012 to April 2014, Velleca served as the executive vice president of the Leukemia & Lymphoma Society. Velleca holds a Bachelor of Science from Yale University and an M.D. and Ph.D. from Washington University in St. Louis.

Rajesh K. Malik, M.D. is the chief medical officer of G1 Therapeutics and has served in that role since July 2014. Malik has more than 20 years of experience in the pharmaceutical and biotechnology industries and in academic medicine. Previously, Malik was a consultant from May 2013 until July 2014. He served as the CMO of Agennix AG from Jan. 2007 to Sept. 2013 and as the CMO of Adherex Technologies Inc. from Sept. 2004 to Jan. 2007. Malik holds an M.B. and CH.B from the University of Sheffield Medical School.

Financial Highlights and Investment Risks

As of Dec. 31, 2016, the company reported it had cash, cash equivalents and short-term investments on hand of $47,304,820. It did not report any grant income for the year, and it reported net losses of $34,695,806. For the year that ended on Dec. 31, 2015, the company reported it had cash, cash equivalents and short-term investments of $22,937,720, grant revenue of $522,431 and net losses of $21,690,173.

G1 Therapeutics reports it has multiple risk factors for investors. It has a history of substantial losses and it may continue to have losses into the future. There is also no guarantee that its products will be approved by the FDA or by foreign regulatory agencies, and it may never become profitable. The company also has a very short operational history. The company intends to use its proceeds primarily for the continued development of its lead product candidates. The remainder will be used for general corporate purposes.

Conclusion: Consider Caution
While we have observed that cancer-focused companies tend to garner significant investor attention at the time of IPO, GTHX has a relatively small syndicate and remains in very early stages of its growth.

We suggest investors consider holding off on buying shares at this time.