On November 3, 2022 Geron Corporation (Nasdaq: GERN), a late-stage clinical biopharmaceutical company developing a first-in-class telomerase inhibitor, imetelstat, to treat hematologic malignancies, reported financial results for the third quarter of 2022 and upcoming expected milestones (Press release, Geron, NOV 3, 2022, View Source [SID1234623011]).
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"Throughout the year, we have highlighted our vision for Geron to become a leader in the treatment of hematologic malignancies through the expected development and commercialization of imetelstat. We continue to believe that the differentiating qualities of imetelstat, including potential for disease modification and durability of effect, could transform the treatment landscape for lower risk myelodysplastic syndromes and JAK inhibitor relapsed/refractory myelofibrosis," said John A. Scarlett, M.D., Geron’s Chairman and Chief Executive Officer. "We’re looking forward to the IMerge Phase 3 top-line results expected in just two months that if positive, will advance the company from late-stage development to commercialization and provide meaningful value for stockholders and patients."
Upcoming Expected Milestones
2022
Phase 2 and non-clinical updates expected at upcoming medical meeting
Open remaining selected clinical sites in Phase 3 IMpactMF trial evaluating imetelstat vs. best available therapy in patients with JAK inhibitor relapsed/refractory myelofibrosis
Start Phase 2 IMpress investigator-led study of single-agent imetelstat in relapsed/refractory (R/R) acute myeloid leukemia (AML) and higher risk MDS
2023
Top-line results from IMerge Phase 3 in lower risk myelodysplastic syndromes (MDS) in early January
New Drug Application submission in lower risk MDS in the U.S. in the first half of the year
Marketing Authorization Application submission in lower risk MDS in the EU in the second half of the year
Preliminary data from IMproveMF Phase 1 study of imetelstat in combination with ruxolitinib in frontline myelofibrosis by year-end
2024
U.S. approval and commercial launch in lower risk MDS in the first half of the year
IMpactMF interim analysis
Current and Projected Financial Resources
As of September 30, 2022, the Company had approximately $195 million in cash and marketable securities.
Under current planning assumptions, the Company projects its existing capital resources plus projected future proceeds of up to approximately $121 million from the potential exercise of the currently outstanding warrants and up to $50 million from the current debt facility will be sufficient to fund Geron’s estimated level of operations, which includes stage-gated activities for potential U.S. commercial launch of imetelstat in lower risk MDS, until the middle of 2024.
Third Quarter 2022 Results
For the third quarter of 2022, the Company reported a net loss of $41.1 million, or $0.10 per share, compared to $26.7 million, or $0.08 per share, for the comparable 2021 period. Net loss for the first nine months of 2022 was $99.3 million, or $0.26 per share, compared to $84.1 million, or $0.26 per share, for the comparable 2021 period.
Revenues for the three and nine months ended September 30, 2022, were $297,000 and $493,000, respectively, compared to $109,000 and $353,000 for the comparable 2021 periods. Revenues in both years primarily reflect estimated royalties from sales of cell-based research products from the Company’s divested stem cell assets.
Total operating expenses for the three and nine months ended September 30, 2022, were $40.2 million and $97.1 million, respectively, compared to $25.8 million and $83.4 million for the comparable 2021 periods.
Research and development expenses for the three and nine months ended September 30, 2022, were $24.6 million and $67.3 million, respectively, compared to $18.5 million and $61.6 million for the comparable 2021 periods. The increase in research and development expenses for the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily reflects the net result of increased personnel-related expenses for additional headcount and higher consulting costs related to preparation for top-line results and regulatory submissions in lower risk MDS; partially offset by decreased manufacturing costs due to the timing of imetelstat manufacturing batches.
General and administrative expenses for the three and nine months ended September 30, 2022, were $15.6 million and $29.8 million, respectively, compared to $7.3 million and $21.8 million for the comparable 2021 periods. The increase in general and administrative expenses for the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily reflects increased costs for commercial preparatory activities; higher personnel-related expenses for additional headcount; and approximately $7.0 million for Geron’s portion of the settlement for the class action lawsuit. In September 2022, the Company entered into a Stipulation and Agreement of Settlement (Stipulation) to resolve the class action lawsuit against the Company and certain officers of the Company. Under the terms of the Stipulation, in exchange for the release and dismissal with prejudice of all claims against the defendants in the class action lawsuit, Geron agreed to pay and/or to cause the Company’s insurance carriers to pay a total of $24 million, comprised of approximately $17 million in cash and, at Geron’s election, approximately $7 million in either shares of Geron common stock and/or cash. The proposed settlement does not constitute an admission of fault or wrongdoing by Geron or its officers. The proposed settlement remains subject to final approval by the court to be conducted at a hearing scheduled at the end of the first quarter of 2023 and certain other conditions, at which time payment of the settlement amount will be due.
Interest income was $852,000 and $1.3 million for the three and nine months ended September 30, 2022, respectively, compared to $112,000 and $421,000 for the same periods in 2021. The increase in interest income for the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily reflects a larger marketable securities portfolio with the receipt of net cash proceeds from the underwritten public offering completed in April 2022 and higher yields from recent marketable securities purchases.
Interest expense was $1.8 million and $4.9 million for the three and nine months ended September 30, 2022, respectively, compared to $1.1 million and $2.6 million for the same periods in 2021. The increase in interest expense for the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily reflects rising interest rates and increased principal debt balance. Currently, the Company has $50.0 million in principal debt outstanding.
Net other expense was $138,000 and $77,000 for the three months ended September 30, 2022 and 2021, respectively. Net other income was $916,000 and $1.1 million for the nine months ended September 30, 2022 and 2021, respectively. In the second quarter of 2022, the Company recognized other income of approximately $1.3 million related to the reimbursement of certain legal expenses under its insurance policies. During the first quarter of 2021, the Company sold all of its holdings in an equity investment resulting in a net realized gain of $1.2 million, including foreign currency translation adjustments.
Projected 2022 Financial Guidance Reaffirmed
For fiscal year 2022, under generally accepted accounting principles (GAAP), the Company continues to expect total operating expenses in the range of approximately $155 million to $165 million, which includes non-cash items such as: stock-based compensation expense, amortization of debt discounts and issuance costs as well as depreciation and amortization. The Company continues to expect non-GAAP total operating expenses for fiscal year 2022, which excludes estimated non-cash items such as: stock-based compensation expense, amortization of debt discounts and issuance costs as well as depreciation and amortization, in the range of approximately $140 million to $150 million.
The fiscal year 2022 financial guidance reflects costs to support: (a) preparatory activities for top-line results from the IMerge Phase 3 clinical trial and readiness for potential regulatory filings and commercialization of imetelstat in lower risk MDS; (b) continued conduct of IMerge and IMpactMF and commencement of new clinical studies associated with the imetelstat pipeline expansion strategy; (c) finalizing validation batches of imetelstat at contract manufacturers to enable future production of imetelstat for clinical and commercial purposes; (d) projected increases in headcount and (e) interest payments on outstanding debt.
As of September 30, 2022, the Company had 98 employees. The Company plans to grow to a total of approximately 100 to 110 employees by year-end 2022.
Conference Call
Geron will host a conference call at 9:00 a.m. ET on Thursday, November 3, 2022 to review recent events and third quarter 2022 financial results.
A live webcast of the conference call and related presentation will be available on the Company’s website at www.geron.com/investors/events. An archive of the webcast will be available on the Company’s website for 30 days.
Participants may access the webcast by registering online using the following link: View Source
About Imetelstat
Imetelstat is a novel, first-in-class telomerase inhibitor exclusively owned by Geron and being developed in hematologic malignancies. Data from Phase 2 clinical trials provide strong evidence that imetelstat targets telomerase to inhibit the uncontrolled proliferation of malignant stem and progenitor cells in myeloid hematologic malignancies resulting in malignant cell apoptosis and potential disease-modifying activity. Imetelstat has been granted Fast Track designation by the United States Food and Drug Administration for both the treatment of patients with non-del(5q) lower risk MDS who are refractory or resistant to an erythropoiesis stimulating agent and for patients with Intermediate-2 or High-risk MF whose disease has relapsed after or is refractory to janus associated kinase (JAK) inhibitor treatment.
About IMerge Phase 3
IMerge Phase 3 is a double-blind, randomized, placebo-controlled Phase 3 clinical trial with registrational intent. The trial is designed to enroll approximately 170 transfusion dependent patients with Low or Intermediate-1 risk myelodysplastic syndromes (MDS), also referred to as lower risk MDS, who have relapsed after or are refractory to prior treatment with an erythropoiesis stimulating agent (ESA). The primary endpoint is the rate of red blood cell (RBC) transfusion independence (TI) for any consecutive period of eight weeks or longer, or 8-week RBC-TI rate. Key secondary endpoints include the rate of RBC-TI lasting at least 24 weeks, or 24-week RBC-TI rate, duration of TI and the rate of hematologic improvement-erythroid (HI-E), defined as a reduction of at least four units of RBC transfusions over eight weeks compared with the prior RBC transfusion burden.
IMerge Phase 3 is fully enrolled and patient enrollment has been closed. For additional information about IMerge Phase 3, visit ClinicalTrials.gov/NCT02598661.
About IMpactMF Phase 3
IMpactMF is an open label, randomized, controlled Phase 3 clinical trial with registrational intent. The trial is designed to enroll approximately 320 patients with Intermediate-2 or High-risk myelofibrosis (MF) who are relapsed after or refractory to prior treatment with a JAK inhibitor, also referred to as relapsed/refractory MF. Patients will be randomized to receive either imetelstat or best available therapy. The primary endpoint is overall survival (OS). Key secondary endpoints include symptom response, spleen response, progression free survival, complete remission, partial remission, clinical improvement, duration of response, safety, pharmacokinetics, and patient reported outcomes.
IMpactMF is currently enrolling patients. For further information about IMpactMF, including enrollment criteria, locations and current status, visit ClinicalTrials.gov/NCT04576156.