After stumble in trials, Durham cancer drugmaker goes private in $405 million deal
The Triangle will have one fewer company on the stock market after the Durham cancer treatment firm G1 Therapeutics announced Wednesday it is being taken private in a $405 million merger with the Danish pharmaceutical company Pharmacosmos.
The deal values G1 Therapeutics at a 68% premium above its final closing price.
G1 has spent years developing its flagship drug trilaciclib, sold under the brand name Cosela. In 2021, Cosela became the first and still only therapy approved by the U.S. Food and Drug Administration to address a certain type of small cell lung cancer. That year, G1 had around 125 employees at its headquarters on the RTP Frontier campus, a collection of converted IBM office buildings near the center of Research Triangle Park .
But Cosela has stumbled in two recent clinical trials. In early 2023, G1 stopped a late-stage study into the drug’s effects on treating a certain kind of colon cancer after disappointing trial results. Then this June, G1 announced trilaciclib failed to improve life expectancy in a breast cancer trial. The shortcomings plunged the company’s stock price, which went from a high of $68 in 2018 to ending Tuesday at $4.11 a share.
Following the disappointing breast cancer results, G1 said it would discontinue the study and “make targeted headcount reductions outside of the existing commercial organization.” The company informed The News & Observer it has already made these layoffs.
Pharmacosmos has agreed to purchase G1 Therapeutics at $7.15 per share. The Danish firm focuses on developing treatments for iron deficiencies, and in a joint statement, the two companies said the merger will make Cosela available to more people worldwide who live with extensive-stage small cell lung cancer.
“I am proud of all that the G1 team has accomplished over the years, thankful for their great effort, and excited about what’s possible by the combined Pharmacosmos/G1 team as we meet the needs of more cancer patients,” G1 Therapeutics CEO Jack Bailey said.
The two companies will continue to operate independently until the deal closes, G1 spokesperson Will Roberts said in an interview Wednesday. He anticipates the merger finalizing around the end of September, after which, Pharmacosmos will decide whether to keep G1’s local office. Roberts added his company currently has around 80 employees, close to 50 of whom report to the RTP building.
Fewer public companies is a trend
Founded in 2008 under the name GO, G1 Therapeutics benefited in its early years from local funding. The North Carolina Biotechnology Center lent the company $250,000 in both 2011 and 2012. Around that time, G1 received $600,000 in seed money from the Durham biotech investment firm Hatteras Venture Partners.
G1 Therapeutics went public in 2017 at $15 a share. In exiting the stock market, G1 Therapeutics joins other erstwhile public Triangle companies like ChannelAdvisor, an e-commerce cloud platform company taken private in 2022.
The number of publicly traded companies has dwindled in recent decades, with around 40% fewer companies listed on the stock market today compared to the 1990s. The most recent Triangle-area companies to file for an initial public offering were the Durham biotech businesses Humacyte and Bioventus in 2021.
“There used to be a fair amount of appetite for micro-caps, which would be companies (valued at) under $1 billion,” Scot Wingo, a Triangle entrepreneur who cofounded ChannelAdvisor, told the N&O this spring.
“You’ve got to be bigger, you’ve got to be better to go public,” added Paul Clark, cofounder of VentureSouth, a regional early-stage investment fund in Greenville, South Carolina.
This story was originally published August 8, 2024 at 5:30 AM.
