Following breast cancer setback, G1 acquired by Pharmacosmos for $405M

Danish pharmaceutical company Pharmacosmos is poised to secure its second FDA-approved medication and its first oncology product following its announcement on Wednesday to acquire G1 Therapeutics. The proposed acquisition comes at a share price of $7.15, which is over three times the lowest trading point of G1 Therapeutics' stock this year. In total, the acquisition will amount to approximately $405 million. However, this purchase price is significantly lower than G1 Therapeutics' initial public offering value of $15 per share in May 2017 and far from its peak trading value of nearly $68 in September 2018.

G1 Therapeutics' notable development, the CDK4/6 inhibitor known as Cosela (trilaciclib), received FDA approval in 2021. Cosela was approved to reduce the incidence of chemotherapy-induced myelosuppression in adults undergoing certain chemotherapy treatments for extensive-stage small-cell lung cancer (SCLC). At the time of this approval, G1 Therapeutics' stock was valued at around $30 per share.

Despite these significant milestones, G1 Therapeutics has largely traded in the single digits since early 2022. In June of this year, the company reported that Cosela failed a Phase III clinical trial for breast cancer, which caused shares to plummet to $2.22. The acquisition offer from Pharmacosmos represents a 222% premium over this low point.

Traditionally, Pharmacosmos has specialized in treating iron deficiency. Its leading product, Monoferric (ferric derisomaltose), is FDA-approved for the treatment of iron deficiency anemia. According to Pharmacosmos CEO Tobias Christensen, Cosela complements their existing product line well, hinting at potential global expansion for the drug. Cosela is already approved for use in both the United States and China.

Jack Bailey, the CEO of G1 Therapeutics, expressed optimism about the acquisition, stating that it would facilitate quicker market penetration for Cosela within the ES-SCLC segment, thereby maximizing its availability for patients. The acquisition deal is anticipated to finalize later this quarter.