Geron Corporation (NASDAQ:GERN) Q4 2023 Earnings Call Transcript

Geron Corporation (NASDAQ:GERN) Q4 2023 Earnings Call Transcript February 28, 2024

Geron Corporation beats earnings expectations. Reported EPS is $-0.09, expectations were $-0.1. GERN isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Geron Corporation’s Fourth Quarter and Full Year 2023 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Aron Feingold, Vice President of Investor Relations and Corporate Communications, you may begin your conference.

Aron Feingold: Good morning, everyone. Welcome to the Geron Corporation fourth quarter and full year 2023 earnings conference call. I am Aron Feingold, Geron’s Vice President of Investor Relations and Corporate Communication. I’m joined today by several members of Geron’s management team, Dr. John Scarlett, Chairman and Chief Executive Officer; Michelle Robertson, Executive Vice President and Chief Financial Officer; Dr. Faye Feller, Executive Vice President and Chief Medical Officer; Anil Kapur, Executive Vice President of Corporate Strategy and Chief Commercial Officer; and Dr. Andrew Grethlein, Executive Vice President and Chief Operating Officer. Before we begin, please note that during the course of this presentation and question-and-answer session, we will be making forward-looking statements regarding future events, performance, plans, expectations, and other projections, including those relating to the therapeutic potential and potential regulatory approval of imetelstat, anticipated clinical and commercial events and related timelines, the sufficiency of Geron’s financial resources, and other statements that are not historical facts.

Actual events or results could differ materially. Therefore, I refer you to the discussion under the heading Risk Factors in Geron’s most recent periodic report filed with the FDC, which identifies important factors that could cause actual results to differ materially from those contained in the forward-looking statement. Geron undertakes no duty or obligation to update our forward-looking statement. With that, I’ll turn the call over to Chip. Chip?

John Scarlett: Thanks, Aron. Good morning, everyone. Thanks for joining us today. Geron’s progress and execution throughout 2023 has paved the way for a potentially transformational 2024 as we plan for the transition to becoming a commercial company. FDA has signed a producer date of June 16, 2024 for imetelstat for the treatment of transfusion-dependent anemia in patients with lower-risk MDS, and has also provided notice that it’s scheduled in ODAC as part of the imetelstat NDA review to be held on March 14th, 2024. In addition, a review of our MAA for the same indication is expected to be completed in early 2025. We’re focused on and prepared for these critical next steps in the regulatory review process, which we hope will result in approval of what we believe is a highly differentiated and important treatment option for patients with transfusion-dependent lower-risk MDS.

The publications from our pivotal IMerge Phase 3 clinical trial, including most recently in The Lancet, show a robust response rate and an unprecedented durability of red blood cell transfusion independence with imetelstat treatment across multiple MDS patient subgroups addressing areas of high unmet need. Additional unique attributes of imetelstat include patient-reported outcomes of less fatigue and significant reductions in variant allele frequency in commonly mutated MDS genes. With a well-characterized safety profile of generally manageable and short-lived thrombocytopenia and neutropenia, we believe the clinical evidence supporting the benefits of imetelstat is compelling and that it can become a transformational treatment option for currently underserved populations if approved by regulatory authorities.

Behind our lead indication, low-risk MDS is a similarly important program, the Phase 3 IMpactMF clinical trial in JAKi relapsed and refractory myelofibrosis. An interim analysis is expected for this study in the first half of 2025. IMpactMF is the first and only MF Phase 3 trial with overall survival as a primary endpoint. If the expected interim analysis in 2025 or the final analysis expected in 2026 is positive, these data could be transformational for patients with JAKi relapse and refractory MF who have dismal survival prognoses today. Our two lead indications for imetelstat represent significant commercial opportunities with a total addressable market or TAM of $3.5 billion for each indication across the US and EU in 2031, thus representing a combined $7 billion TAM for transfusion-dependent low risk MDS and relapsed/refractory MF.

Given this very substantial opportunity, amid a deep unmet need in transfusion-dependent low risk MDS, we expect to be prepared to launch and self-commercialize imetelstat in its lead indication upon potential FDA approval in the middle of this year. We have also completed multiple long lead activities to prepare Geron, imetelstat, and the market for our potential launch in the US, with the goal of ensuring broad access and reimbursement for important medicine. Moreover, if imetelstat status approved by the European Commission in transfusion dependent low risk MDS, we expect commercial launch in Europe would occur in 2025. We’re continuing to evaluate our strategic options for European commercialization, including self-commercialization or partnering, and expect to be able to provide an update later this year.

Lastly, we ended 2023 with a strong cash position of approximately $378 million, which based on our current plans and expected available resources, we expect will enable us to fund a potential successful launch in transfusion dependent low risk MDS in the US and fund our planned operations into the third quarter of 2025. We believe our differentiated product candidates, the very important commercial opportunities in transfusion dependent low risk MDS and relapse/refractory MF, the excellence and experience of our employees, and the financial resources to execute on our near-term milestones, puts us in a strong position for value creation. With that, I’ll turn the call over to Faye for a regulatory and clinical update. Faye?

Faye Feller: Thanks, Chip, and good morning to everyone on the call. As Chip mentioned, we are deeply focused on the regulatory processes for our imetelstat NDA and MAA, which are currently under review by the FDA and EMA for the treatment of transfusion-dependent anemia in patients with lower-risk MDS who have failed to respond or have lost response to or are ineligible for ESA. As previously disclosed, the FDA assigned a PDUFA action date of June 16, 2024. On January 30, 2024, the FDA also provided notice in the Federal Register that it has scheduled an ODAC as part of the imetelstat NDA review to be held virtually on March 14, 2024. We feel very well prepared for the scheduled ODAC. We’ve been working for many months with an expert consultancy group, which complements our deep in-house regulatory experience.

I am personally excited to have the opportunity to discuss imetelstat with experts and peers as we believe imetelstat could be an important and compelling new medicine for transfusion dependent, low-risk MDS patients. Our readout of positive top-line results from our pivotal IMerge trial in January 2023 was followed last year by a number of additional presentations and analyses of the data, including at ASCO and EHA earlier in the year and last quarter at ASH. This growing body of data from the trial continue to give us confidence in what we believe is a meaningful clinical benefit and manageable safety profile with imetelstat in patients with transfusion-dependent lower risk MDS. As reported at these conferences, the clinical attributes of imetelstat were differentiated, particularly with respect to high RBCTI response rate, durability of response, and the consistency of effect across MDS subgroups that have historically been very difficult to treat.

The Lancet published results from our IMerge Phase 3 trial this past December, a strong validation of the importance of the study within the field, as well as a powerful way to reach hematologists and other providers globally with these potentially practice-changing results that offer the possibility of relief for lower-risk MDS patients from chronic reliance on blood cell transfusions. Turning now to our Phase 3 trials imetelstat in relapse/refractory MF. We were excited to have completed 50% enrollment in the study in November of 2023. We continue to expect an interim analysis in the first half of 2025, which will occur when approximately 35% of the planned enrolled patients have died. A final analysis is expected in the first half of 2026 when over 50% of the planned enrolled patients have died.

We look forward to continuing to keep you updated on this important study. Lastly, we are also evaluating imetelstat in a Phase 1 study as a combination therapy with ruxolitinib in patients with frontline myelofibrosis. Our main goal for this combination study, known as IMproveMF, is to determine the safety profile of the combination regimen of ruxolitinib and imetelstat, as well as to explore the potential activity in a frontline MF disease setting. In January 2024, we escalated to the third of four dose cohorts in the study, following a unanimous decision by the study’s Safety Evaluation Team, or SET, who reviewed the second cohort data. We are very pleased with the progress and look forward to providing future updates. With that, I’ll turn the call over to Anil for a commercial update.

Anil?

Anil Kapur: Thank you, Faye, and good morning, everyone. I look forward to discussing first where we see significant unmet need in the market, and then we’ll provide a brief update on our US launch plan. There remains significant unmet need across key transfusion dependent lower risk MDS patient populations that are underserved by current available treatment options. Approximately 10% of lower risk MDS patients are not eligible for ESAs and represent a very high unmet need subgroup. RS-negative patients make up approximately 75% of lower risk MDS patients and are a population particularly vulnerable to poor clinical outcomes. There are no therapies indicated for the treatment of anemia in RS negative patients once they are relapsed or refractory to ESAs. RS positive patients make up approximately 25% of the lower-risk MDS patients, and most who are high-transfusion burden lack effective treatment options.

These underserved subgroups are at a greater risk for disease progression and suboptimal survival and are in the need for more effective treatment options. Moving on to an update on US launch preparations, with our PDUFA date just about 3.5 months away, we have completed multiple critical launch readiness activities and plan to be ready to launch imetelstat in the US market upon potential approval. Long lead time activities such as securing our global trademark on our brand name, manufacturing of commercial supply are now complete. In preparation of launch, we have also finalized our distribution network and our patient support providers. In addition, we have onboarded and fully integrated a highly experienced commercial and medical affairs team into Geron.

We continue to transition Geron towards a commercial company with the integration and adoption of systems and processes to recognize and report revenues and the continued refinement of engagement plans with marketing, commercial access, payer and reimbursement stakeholders. With regards to our field team, all regional business directors were onboarded in early January and key account manager roles are being recruited. We expect to onboard the sales force in the first and second quarter of 2024. I’m very excited by the caliber of talent we have recruited onto the commercial team and across the organization. Our cross-functional launch teams have deep oncology expertise and operational experiences, and they have been part of multiple oncology launches.

We are excited about the opportunity to bring this innovative therapy to patients and are confident in our readiness to launch imetelstat in the US market upon potential FDA approval. With that, I’ll now pass the call over to Michelle for a financial update. Michelle?

Michelle Robertson: Thanks, Anil, and good morning, everyone. For detailed Q4 and full year 2023 financials, Please refer to the press release we issued this morning, which is available on our website. I will now review some highlights from the quarter and full year. At the end of 2023, our cash, cash equivalents, and marketable securities were $378.1 million. There are approximately 2.5 million warrants outstanding and the potential proceeds from these warrants is $3.2 million. Total operating expenses for the three and 12 months ended December 31st, 2023, were $54.3 million and $194.1 million respectively, compared to $42 million and $139.1 million for the comparable 2022 periods. R&D expenses for the three and 12-months ended December 31, 2023, were $32.9 million and $125 million, respectively, compared to $28.2 million and $95.5 million for the same period in 2022.

Expenses have increased year-over-year, primarily related to supporting our Phase 3 clinical trials, IMerge and IMpactMF. Both personnel and consulting costs increased to support regulatory submissions and increased investment in manufacturing as we prepare for the potential US commercialization of imetelstat in transfusion-dependent lower-risk MDS. G&A expenses were $21.4 million and $69.1 million for the three and 12 months ended December 31, 2023, compared to $13.8 million and $43.6 million for the same periods in 2022. The increase in G&A expense is primarily attributed to headcount and external expenses to support the commercial readiness activities. At the end of December 31st, 2023, the company had 141 employees, which we project will grow to approximately 270 employees by the end of 2024, subject to receiving FDA approval of imetelstat.

The increase in headcount is primarily in the commercial and medical affairs teams. Our projected full year 2024 operating expenses are expected to be between $270 million and $280 million. Based on our current operating plans and expectations regarding the timing of a potential approval of our imetelstat NDA that is currently under FDA review and subsequent potential US commercial launch, we believe that our current cash resources, together with projected revenues from US sales of imetelstat, proceeds from the exercise of outstanding warrants, and funding under our loan facility, will be sufficient to support our operations into the third quarter of 2025. I will now turn the call back over to Chip. Chip?

John Scarlett: Thanks, Michelle. For Geron, our progress in 2023 represented the culmination of a many-year, multifaceted scientific and drug development journey, the goal of which is to translate the promise of telomerase inhibition into a potentially powerful medicine. Today we’re just 3.5 months away from the PDUFA date for our first-in-class telomerase inhibitor, which we believe has the potential to offer important and potentially life-changing treatment options to patients with transfusion-dependent lower risk MDS. We believe this is a robust commercial opportunity, and we’re on track for a successful transition to becoming a commercial company. In addition, we’re excited by the momentum in our Phase 3 IMpactMF trial, which is 50% enrolled as of November 2023 and for which we expect an interim analysis in the first half of 2025.

We believe these programs carry significant value for patients and shareholders alike, and we look forward to keeping you updated on our progress. We’ll now open the line to questions. Operator?

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Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Corinne Johnson from Goldman Sachs. Your line is open.

Corinne Johnson: Good morning. Maybe one from us and a follow-up to it. How would you characterize the likelihood that you could see imetelstat approved with either a black box warning and/or a REMS program? And then perhaps more importantly, what do you view as the implications from a commercial perspective under either scenario?

John Scarlett: Yeah, a lot of suppositions, Corinne. I’m going to say first of all, when you’re going to hear this, opening over, everybody will. So I’ll just say once we’re not going to comment on ongoing conversations with regulators and the opportunities that we’re getting very close to all of these milestone events. Let me just say I don’t think it’s warranted. I don’t think that from our perspective, either a black box or [Technical Difficulty] warranted predicting how all of that would go is a little [indiscernible] ability to be used safely and effectively in this target population.

Corinne Johnson: Okay, thanks.

John Scarlett: The second part of that question, I think…

Corinne Johnson: The commercial implications, if it was to be implemented.

John Scarlett: From pure speculation, I think I’ll say out of that speculation, I think everybody understands that it all depends on the — certainly when it comes to either black boxes or warnings or current indications, these are all nuanced — these are all nuanced issues, [indiscernible]. One is it’s never been from our perspective, but again, kind of depends on how that gets put together. That’s not where we’re — we’re focused forward beyond those types of positions we hope.

Corinne Johnson: Okay, thank you.

Operator: Your next question comes from the line of Kalpit Patel from B. Riley. Your line is open.

Kalpit Patel: Yeah, hey, good morning and thanks for taking the question. There was a letter submitted to the ODAC members by an independent group regarding the hepatic safety for imetelstat. The conclusion on that letter was positive overall for imetelstat. But I guess the question is, have you requested any other independent assessments for maybe additional topics, such as evaluating the safety of the cytopenias from all the studies before the outcome?

John Scarlett: Well, I think we ought to clarify for those who aren’t aware of it. That letter was sent by the members of our hepatic safety or hepatic evaluation committee at the support agency. That group of liberal experts were convened almost a decade ago. They’re very, very well known to many people in the industry, experts on drug abuse, liver injury, etc. And we engaged them to oversee all of the imetelstat files going forward. And I have to say they did a wonderful job. We had quarterly readings that looked at every scrap of information [indiscernible] Every scrap of information that relates in any way, shape of form to liver hepatotoxicity or liver safety. And so let us say on the topic for people to need that it simply reaffirms their beliefs that it’s a very safe drug from a liver perspective.

So that’s really where it came from. And I think we’ll just leave it at that. That is kind of a well-confined area of interest that many people are aware of, especially decades ago.

Kalpit Patel: Okay, thanks for taking the question.

Operator: Your next question comes from a line of Stephen Willey from Stifel. Your line is open.

Stephen Willey: Yeah, thanks for taking the questions. I guess, again, I’m not sure if you’ll be able to speak to this, but can you remind us just what the frequency of platelet and cell count monitoring in the IMerge trial was? And I guess as you think about a potential product label, would you expect that monitoring requirement to be a bit more stringent than what it was in the trial?

John Scarlett: I think if I recall, there was weekly monitoring for several cycles. And I think whatever was in the trial is not unlikely to be looked at by regulators as sort of a de facto standard. I won’t comment on [indiscernible] know where that would go exactly. But I do think that that makes sense. And it’s given us the ability to really interrogate the frequency and the sort of the course of these side of things, which as you know are indeed short-lived and well-managed. We manage them all, I guess I should say. But we only know that because we’ve studied them in that way. So I think that’s the de facto standard and what I would accept going forward in the economy from a safety perspective.

Stephen Willey: Okay. And do you know, I guess, what proportion of these patients, I mean, obviously they’re low-risk MDS and have dysplastic marrow, but do you know what proportion of them are already doing weekly cell counts, whether it’s at home, whether it’s in a heme office?

John Scarlett: Well, I’ll give you an answer to that. It’s an interesting question. I would say that it kind of depends on what — where they are in their journey, and as you say, kind of where they’re, what the level of the marrow dysplasia is and so forth, and what their own experiences. As you saw on the placebo line, we have — we do have patients who simply also showed meaningful cytopenias even though they were receiving placebo and whatever other background therapy is allowed. So, but on the other hand, I think the regular monitoring probably is associated with different products that these patients face that are not going to be associated with [indiscernible]. So my guess is that this would be something that would get started.

When you start a new drug, most pathologists would follow very carefully. Just kind of all make sense. And then ultimately, it will be up to the physician on whatever the label says to decide how the frequency and how that sort of pours out over the course of vicious treatment with any drug included in those trials.

Stephen Willey: Okay. And maybe just kind of a bigger picture question. I mean, there’s obviously, kind of this ongoing narrative amongst investors regarding the exclusivity runway and, the development program for imetelstat here is still not necessarily expanding, but it’s being broadened into some additional indications. And so just curious, I guess, does — do these Phase 1 studies reflect your internal confidence in the IP or do you think that these are opportunities you could bring online quickly, maybe carve out some additional orphan drug designations, would just be kind of interested in terms of how you’re thinking about the longer term R&D program for this drug?

John Scarlett: Sure. So I think you were referring, just to be clear, to IMproveMF and on the AML study, did I get your question right about that?

Stephen Willey: Yeah, correct. So the Rux combo study and just some of the other…

John Scarlett: Sure. So I think it’s incumbent on every company developing a drug, regardless of kind of whatever the nuances of the IP positions are. I think we study new combinations and study different utilities of drugs. And I’m sorry for being unpleasant about this. I don’t mean to be, but we have to move it at kind of a high level. I think we do that on the basis that we think — if we think that there is benefit to be derived for patients, that’s when we become really interested. The [Rux] (ph) is a really good example, as you know and have written about, to these people know. There were a whole series of pre-clinical experiments done a number of years ago now. And they were a very good lab of scientists that looked at the question of whether or not there were different ways to exploit some of the intrinsic activity in telomerase inhibitor against some of the cells that are malignancy transformed and ultimately cause myelofibrosis in clinical outcomes.

And what we see is that if you end up treating with [indiscernible] you see any damage. And then if you sort of chase that, if you come after that, which you can do [indiscernible] with a telomerase inhibitor, in this case, in a [indiscernible] you actually get a higher proportion of animals surviving longer and also see a depletion of the living and athletic stem cells. So that was the key for us to start ultimately, to do all the work necessary to start this study. And it’s because, a, we can go up front with this into frontline patients. B, we hope to be able to actually have ultimately improved efficacy, although this study is predominantly a safety study. C, I guess that some people are going to do this. If we don’t do it, some people somewhere in the world will start to do it on their own, and we would, we think we know the drug, we’ve helped that better than anybody else and we have control of that.

So sorry to be, again, kind of [indiscernible] that, but I think that that’s the rationale. The same with AML. AML is a terrible disease and we’ll actually cross the patients have very few options. There are other drugs in the horizon that I hope for these patients also are [indiscernible]. Our goal is really patients and actually if you do something reasonably innovative, which I think these are innovative, ultimately you file for intellectual property protection. That plays out as a completely separate story in one that’s not as interesting.

Stephen Willey: Okay, makes sense. I appreciate the comments, thanks.

John Scarlett: Sure, thanks.

Operator: [Operator Instructions] Your next question comes from the line of Gil Blum from Needham & Company. Your line is open.

Ethan Markowski: Yeah, hi. This is Ethan Markowski on for Gil. Thank you for taking our question. First one would be how much — I know you’ve touched on this before, but how much extra effort do you think you’ll have to spend on educating community physicians on managing cytopenias versus academic ones assuming approval? And then, do you have any thoughts on how the recent data from morphosis at ASH could impact the myelofibrosis landscape and any future development in the space? Thank you.

John Scarlett: I think that’s a killer name Anil Kapur. Anil?

Anil Kapur: Sure. So we have had extensive discussions with both community and academic providers. And just as a reminder for everyone, low risk MDS is predominantly treated within the community setting. Physicians tell us they have deep experiences with drugs such as len HMAs and are very adept at managing heme-related side effects for patients. And for them, they point to prolonged myelosuppression with HMAs, et cetera, as areas which they have managed successfully for a long period of time. With imetelstat in particular, what is really important is, which they receive really favorably, is the predictability of the cytopenias, the fact that the cytopenias typically are of finite duration and tend to go away in by cycles two and cycle three.

And also importantly, there are no clinical consequences associated with these cytopenias in terms of infections and hospitalizations and bleeding events. And when we also provide context on the mechanism of action, this is something that’s received very favorably by the practicing hematologists. So we do not see much differences between the community versus the academic hematologist in terms of their perceptions and management of heme toxicities. They are adept with their training and also their practice experiences. With regards to the question on myelofibrosis, I think this is also an area which is fast moving. We will obviously wait to see what happens with the BCL-2 and the BET inhibitors in terms of entering the landscape. But a reminder for myelofibrosis is that we are the only Phase 3 study, the largest effort to the best of my knowledge in the world, which is looking at survival in a patient population that’s relapsed and refractory to JAKis.

This patient population is extremely underserved and every feedback from physicians, academic experts, leading KOLs, is that if our myelofibrosis study is positive, it is going to be transformative for patients with myelofibrosis and really will be rapidly well adopted within the space. So I’ll just stop here.

Ethan Markowski: Thank you.

Operator: Your next question comes from the line of Joel Beatty From Baird. Your line is open.

Joel Beatty: Hi, Thanks for taking the questions. For the early access program, can you provide any updates or quantify how many patients are a part of that?

Anil Kapur: Chip, do you want me to take that?

John Scarlett: Sorry, yeah, go ahead.

Anil Kapur: So that’s a clinical study, Joel. We do not provide updates on the enrollment, et cetera, projections within that space. The study is ongoing.

Joel Beatty: Okay, got it. Thanks. And then for the guidance of the cash runway into Q3 2025, what sales assumptions are going to that guidance?

Michelle Robertson: Sorry, Joel. I was on mute. We haven’t shared any sales guidance or revenue guidance just yet.

Joel Beatty: Got it, thank you.

Operator: And we have reached the end of our question-and-answer period. I will now turn the call back over to Aron Feingold for some final closing remarks.

Aron Feingold: Thank you everyone so much for joining us today. We appreciate your interest in Geron and look forward to keeping you updated. Be well.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.