Geron Corporation (Nasdaq: GERN) today reported financial results
for the second quarter ended June 30, 2019, and recent events. The
Company ended the second quarter with $162.3 million in cash and
marketable securities.
During the second quarter, data from the Phase 2 portion of
IMerge was reported at the European Hematology Association (EHA)
Annual Congress that further support Geron’s late-stage development
plans for the imetelstat program. Geron continues to plan to open
the Phase 3 portion of IMerge in lower risk myelodysplastic
syndromes (MDS) for screening and enrollment in August 2019.
“This past quarter, data presented at EHA for the Phase 2
portion of IMerge reported higher efficacy responses from prior
reported data for both 8-week and 24-week RBC-TI rates,
highlighting the meaningful and durable transfusion independence
potentially achievable with imetelstat treatment in heavily
transfusion dependent lower risk MDS patients. Accordingly, we’re
very much looking forward to the Phase 3 portion of IMerge opening
for screening and enrollment later this month,” said John A.
Scarlett, M.D., Chairman and Chief Executive Officer. “In addition,
a second EHA presentation reported results of statistical analyses
in which the months of median overall survival were more than
double for imetelstat-treated relapsed/refractory MF patients in
IMbark, compared to real-world data from closely matched patients
treated with best available therapy. This provides additional
support for our ongoing strategic evaluation of potential
late-stage development approaches and regulatory scenarios in
relapsed/refractory MF as we prepare for an End of Phase 2 meeting
with the FDA, which we’re planning to conduct by the end of the
first quarter of 2020.”
Phase 3 Portion of IMerge Phase 2/3 Clinical Trial –
Initial Site Initiations Complete and Trial to Open for Patient
Screening and Enrollment in August 2019
In May, Geron completed the transfer of the imetelstat
investigational new drug (IND) sponsorship from Janssen Biotech,
Inc. (Janssen), and assumed complete development responsibility for
imetelstat. Site initiations for the Phase 3 portion of IMerge were
completed for several clinical sites in July 2019. Geron is
planning for the trial to open for patient screening and enrollment
later this month.
IMerge is a two-part Phase 2/3 clinical trial of imetelstat in
transfusion dependent patients with lower risk MDS who are
relapsed/refractory to erythroid stimulating agents (ESAs). The
primary efficacy endpoint is the rate of red blood cell transfusion
independence (RBC-TI) lasting at least eight weeks, or 8-week
RBC-TI rate, which is defined as the proportion of patients
achieving RBC-TI during any consecutive eight weeks since entry
into the trial. Key secondary endpoints include the rate of RBC-TI
lasting at least 24 weeks, or 24-week RBC-TI rate, durability of
transfusion independence and the amount and relative change in RBC
transfusions.
The Phase 3 portion of IMerge is designed as a randomized,
double-blind, placebo-controlled clinical trial to test the
hypothesis that imetelstat improves the rate of RBC-TI compared to
placebo. Approximately 170 patients are planned to be enrolled and
randomized in a 2:1 ratio to receive either imetelstat or placebo.
Many key aspects from the Phase 2 portion of IMerge remain the same
for the Phase 3 portion. A target patient population of non-del(5q)
lower risk MDS patients who were naïve to treatment with
hypomethylating agents (HMAs) and lenalidomide was identified from
the Phase 2 portion and will be enrolled in the Phase 3. In
addition, the primary and secondary endpoints, the dose and
schedule of imetelstat administration and many of the clinical
sites remain the same as in the Phase 2. The Company is planning
for the trial to be conducted at multiple medical centers globally,
including North America, Europe, Middle East and Asia.
Second Quarter and Year-to-Date 2019
Results
For the second quarter of 2019, the Company reported a net loss
of $14.2 million, or $0.08 per share, compared to $6.9 million, or
$0.04 per share, for the comparable 2018 period. Net loss for the
first six months of 2019 was $24.3 million, or $0.13 per share,
compared to $14.1 million, or $0.08 per share, for the comparable
2018 period.
Revenues for the three and six months ended June 30, 2019 were
$101,000 and $158,000, respectively, compared to $208,000 and
$526,000 for the comparable 2018 periods. Revenues for the three
and six months ended June 30, 2019 and 2018 included royalty and
license fee revenues under various non-imetelstat license
agreements. The decline in revenues reflects a reduction in the
number of active research license agreements in 2019 related to the
Company’s human telomerase reverse transcriptase, or hTERT,
technology as a result of patent expirations on the underlying
technology.
Total operating expenses for the three and six months ended June
30, 2019 were $15.3 million and $26.7 million, respectively,
compared to $7.5 million and $15.2 million for the comparable 2018
periods. Research and development expenses for the three and six
months ended June 30, 2019 were $10.1 million and $16.0 million,
respectively, compared to $3.2 million and $5.6 million for the
comparable 2018 periods. The increase in research and development
expenses, compared to the same periods in 2018, primarily reflects
costs for the transition of the imetelstat program, including
resuming sponsorship of the ongoing imetelstat clinical trials;
expenses for start-up activities for the Phase 3 portion of IMerge;
and higher personnel-related costs for the expanding development
team. General and administrative expenses for the three and six
months ended June 30, 2019 were $5.2 million and $10.6 million,
respectively, compared to $4.2 million and $9.6 million for the
comparable 2018 periods. The increase in general and administrative
expenses, compared to the same periods in 2018, primarily reflects
higher corporate and patent legal costs and increased
personnel-related expenses for additional headcount to support the
development organization.
Interest and other income for the three and six months ended
June 30, 2019 was $1.1 million and $2.3 million, respectively,
compared to $717,000 and $1.1 million for the comparable 2018
periods. The increase in interest and other income, compared to the
same periods in 2018, primarily reflects higher yields on the
Company’s increased marketable securities portfolio.
The Company ended the second quarter of 2019 with $162.3 million
in cash and marketable securities. Since May 2019, the Company has
raised cumulative net cash proceeds of approximately $2.6 million
from the sales of an aggregate of 1,893,091 shares of common stock
under an At Market Issuance Sales Agreement, after deducting sales
commissions and other offering expenses payable by Geron. The
Company expects these net cash proceeds to provide additional
financial flexibility as it advances the imetelstat development
program. The funds will support future development costs, including
conducting the Phase 3 portion of IMerge.
2019 Financial Guidance Reaffirmed
For fiscal year 2019, the Company expects total operating
expenses to range from $80 to $85 million, of which approximately
$20 to $25 million represents one-time costs that include
imetelstat program transition activities from Janssen to Geron and
purchase of drug product, drug substance and raw materials from
Janssen to supply the Phase 3 portion of IMerge and prepare for new
drug manufacturing. The Company continues to expect transition of
the imetelstat program from Janssen to be completed by the end of
the third quarter of 2019.
As of July 31, 2019, the Company had 38 employees, and plans to
grow to a total of approximately 45 to 50 employees by year-end
2019, of whom half will be research and development personnel.
Conference Call
Geron will host a conference call to discuss second quarter and
year-to-date financial results and recent events at 4:30 p.m. ET on
Thursday, August 1, 2019.
Participants may access the conference call live via telephone
by dialing domestically +1 (877) 303-9139 or internationally +1
(760) 536-5195. The conference ID is 2379646. A live, listen-only
webcast will also be available on the Company’s website at
www.geron.com/investors/events. If you are unable to listen to the
live call, an archived webcast will be available on the Company’s
website for 30 days.
About Imetelstat
Imetelstat is a novel, first-in-class telomerase inhibitor
exclusively owned by Geron and being developed in hematologic
myeloid malignancies. Early clinical data suggest imetelstat may
have disease-modifying activity through the suppression of
malignant progenitor cell clone proliferation, which allows
potential recovery of normal hematopoiesis. Ongoing clinical
studies of imetelstat consist of IMerge, a Phase 2/3 trial in lower
risk myelodysplastic syndromes (MDS) and IMbark, a Phase 2 trial in
Intermediate-2 or High-risk myelofibrosis. Imetelstat has been
granted Fast Track designation by the United States Food and Drug
Administration for the treatment of patients with transfusion
dependent anemia due to non-del(5q) lower risk MDS who are
refractory or resistant to an erythroid stimulating agent.
About Geron
Geron is a late-stage clinical biopharmaceutical company focused
on the development and potential commercialization of a
first-in-class telomerase inhibitor, imetelstat, in hematologic
myeloid malignancies. For more information about Geron, visit
www.geron.com.
Use of Forward-Looking Statements
Except for the historical information contained herein, this
press release contains forward-looking statements made pursuant to
the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such statements,
include, without limitation, those regarding: (i) that the Phase 3
portion of IMerge is planned to be open for patient screening and
enrollment in August 2019; (ii) that meaningful and durable
transfusion independence is potentially achievable with imetelstat
treatment in heavily transfusion dependent lower risk MDS patients;
(iii) that there will be an End of Phase 2 meeting with the FDA by
the end of Q1 2020 regarding potential development of imetelstat
for relapsed/refractory MF patients; (iv) that approximately 170
patients are planned to be enrolled in the Phase 3 portion of
IMerge; (v) that the Company expects its 2019 operating expenses to
be $80 to $85 million; (vi) that the Company expects transition of
the imetelstat program from Janssen to be completed by the end of
the third quarter of 2019; (vii) that the Company expects to grow
to 45 to 50 employees by year-end 2019; (viii) that
imetelstat may have disease-modifying activity; (ix) that
imetelstat may potentially be commercialized; and (x) other
statements that are not historical facts, constitute forward
looking statements. These statements involve risks and
uncertainties that can cause actual results to differ materially
from those in such forward-looking statements. These risks and
uncertainties, include, without limitation, risks and uncertainties
related to: (i) whether the Company overcomes all the clinical,
safety, efficacy, technical, scientific, intellectual property,
manufacturing and regulatory challenges to enable the opening of
the Phase 3 portion of IMerge for screening and enrollment in
August 2019 and to enable the eventual commercialization of
imetelstat; (ii) whether regulatory authorities permit the further
development and commercialization of imetelstat on a timely basis,
or at all, without any clinical holds; (iii) whether imetelstat is
demonstrated to be safe and efficacious in clinical trials; (iv)
whether any future efficacy or safety results may cause the
benefit-risk profile of imetelstat to become unacceptable; (v)
whether the Company will be able to successfully retain and recruit
key personnel to support its development plans; (vi) whether there
are unexpected operating expenses or events that cause the $80 to
$85 million 2019 financial guidance to be revised; (vii) whether
the transition of the imetelstat program from Janssen occurs on a
timely basis, or at all; (viii) whether imetelstat actually
demonstrates disease-modifying activity in patients; (ix) whether
the Company is able to prepare and submit materials to the FDA for
an End of Phase 2 meeting on a timely basis, or at all; and (x)
whether imetelstat has adequate patent protection and freedom to
operate. Additional information on the above risks and
uncertainties and additional risks, uncertainties and factors that
could cause actual results to differ materially from those in the
forward-looking statements are contained in Geron’s periodic
reports filed with the Securities and Exchange Commission under the
heading “Risk Factors,” including Geron’s quarterly report on Form
10-Q for the quarter ended June 30, 2019. Undue reliance should not
be placed on forward-looking statements, which speak only as of the
date they are made, and the facts and assumptions underlying the
forward-looking statements may change. Except as required by law,
Geron disclaims any obligation to update these forward-looking
statements to reflect future information, events or
circumstances.
Financial table follows.
GERON
CORPORATIONCONDENSED STATEMENTS OF
OPERATIONS(UNAUDITED)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
(In thousands, except share and per share data) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
Revenues: |
|
|
|
|
License fees and royalties |
$ |
101 |
|
$ |
208 |
|
$ |
158 |
|
$ |
526 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
10,134 |
|
|
3,204 |
|
|
16,040 |
|
|
5,644 |
|
General and administrative |
|
5,191 |
|
|
4,246 |
|
|
10,643 |
|
|
9,561 |
|
Total operating expenses |
|
15,325 |
|
|
7,450 |
|
|
26,683 |
|
|
15,205 |
|
Loss from operations |
|
(15,224 |
) |
|
(7,242 |
) |
|
(26,525 |
) |
|
(14,679 |
) |
|
|
|
|
|
|
|
|
|
Interest and other income |
|
1,113 |
|
|
717 |
|
|
2,275 |
|
|
1,111 |
|
Change in fair value of equity investment |
|
(98 |
) |
|
(350 |
) |
|
— |
|
|
(475 |
) |
Other expense |
|
(30 |
) |
|
(59 |
) |
|
(48 |
) |
|
(77 |
) |
Net loss |
$ |
(14,239 |
) |
$ |
(6,934 |
) |
$ |
(24,298 |
) |
$ |
(14,120 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share: |
|
|
|
|
|
|
|
|
Net loss per share |
$ |
(0.08 |
) |
$ |
(0.04 |
) |
$ |
(0.13 |
) |
$ |
(0.08 |
) |
Shares used in computing net loss per share |
|
186,556,082 |
|
|
174,475,244 |
|
|
186,475,055 |
|
|
167,538,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED BALANCE SHEETS
|
|
June 30, |
|
December 31, |
(In thousands) |
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
(Note 1) |
Current assets: |
|
|
Cash,
cash equivalents and restricted cash |
$ |
17,980 |
$ |
10,844 |
Current
marketable securities |
|
134,778 |
|
152,714 |
Other
current assets |
|
2,004 |
|
2,500 |
Total current assets |
|
154,762 |
|
166,058 |
|
|
|
Noncurrent marketable
securities |
|
9,497 |
|
18,582 |
Property and equipment,
net |
|
100 |
|
59 |
Other assets |
|
1,866 |
|
585 |
|
$ |
166,225 |
$ |
185,284 |
|
|
|
Current liabilities |
$ |
9,181 |
$ |
7,551 |
Stockholders’ equity |
|
157,044 |
|
177,733 |
|
$ |
166,225 |
$ |
185,284 |
|
|
|
Note 1: Derived from audited financial
statements included in the Company’s annual report on Form 10-K for
the year ended December 31, 2018.
CONTACT:
Suzanne MessereInvestor and Media
Relationsinvestor@geron.commedia@geron.com
CG Capital877-889-1972
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