Cancer Research: G1 Therapeutics to Be Privatized in Billion-Dollar Deal

The cancer therapy company G1 Therapeutics from Durham is saying goodbye to the stock market after announcing an acquisition by the Danish pharmaceutical company Pharmacosmos for $405 million. The deal values G1 Therapeutics at a 68% premium over the last closing price. G1 Therapeutics has been working for years on its main active ingredient Trilaciclib, which is sold under the brand name Cosela. In 2021, Cosela became the first and only therapeutic approved by the U.S. Food and Drug Administration (FDA) for a specific type of small cell lung cancer. At that time, G1 employed around 125 people at its headquarters on the RTP Frontier Campus. Recently, however, Cosela faced difficulties. Early in 2023, G1 had to halt a late-stage study for the treatment of a specific type of colorectal cancer due to disappointing results. In June, Trilaciclib also failed in a breast cancer study. These failures led to a dramatic drop in G1's stock price, falling from a high of $68 in 2018 to $4.11 on Tuesday. Following the disappointing results from the breast cancer study, G1 decided to terminate the study and make targeted personnel reductions outside of the existing sales organization. According to reports, these layoffs have already been implemented. Pharmacosmos has agreed to acquire G1 Therapeutics for $7.15 per share. The Danish company focuses on the development of treatments against iron deficiency. In a joint statement, the two firms stated that the merger would provide more people worldwide suffering from extensive small cell lung cancer with access to Cosela. "I am proud of all that the G1 team has achieved over the years, grateful for their great dedication, and excited about the opportunities that the combined Pharmacosmos/G1 team will bring to help more cancer patients," said Jack Bailey, CEO of G1 Therapeutics. The companies will continue to operate independently until the deal is completed, estimated to be by the end of September. After that, Pharmacosmos will decide whether G1's local office will remain. Currently, G1 employs around 80 people, about 50 of whom are assigned to the RTP building. Founded in 2008 under the name GO, G1 Therapeutics benefited from local funding in its early years. The North Carolina Biotechnology Center granted the company $250,000 each in 2011 and 2012. During this time, G1 also received $600,000 in seed funding from the Durham biotech investment firm Hatteras Venture Partners. In 2017, G1 Therapeutics went public at a price of $15 per share. By withdrawing from the stock market, G1 Therapeutics joins other formerly public Triangle companies like ChannelAdvisor, which was privatized in 2022. In recent decades, the number of publicly listed companies has declined; today, about 40% fewer companies are listed on the stock market compared to the 1990s. Recent companies in the Triangle area to complete an IPO include Durham biotechnology companies Humacyte and Bioventus in 2021. "There used to be significant demand for micro-caps, which are companies valued at under a billion dollars," said Scot Wingo, a Triangle entrepreneur and co-founder of ChannelAdvisor, this spring. "You have to be bigger and better to go public," added Paul Clark, co-founder of VentureSouth, a regional early-stage investment fund in Greenville, South Carolina.