On November 7, 2024 Geron Corporation (Nasdaq: GERN), a commercial-stage biopharmaceutical company aiming to change lives by changing the course of blood cancer, reported financial results for the third quarter of 2024 and recent business highlights (Press release, Geron, NOV 7, 2024, View Source [SID1234647928]).
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"This has been a transformative year for Geron, following our first FDA approval and commercial launch of RYTELO in June. The initial full quarter of product revenue from our U.S. launch exceeded our expectations and demonstrates strong execution as a commercial company. These results also reflect the high unmet need in lower-risk MDS and the compelling value proposition of RYTELO for hematologists and patients, giving us confidence in future continued demand and momentum for RYTELO," said John A. Scarlett, M.D., Geron’s Chairman and Chief Executive Officer. "We were also pleased to announce this morning the completion of important synthetic royalty and debt financing transactions with Royalty Pharma and Pharmakon Advisors. We believe that the favorable terms in these transactions reflect the significant commercial potential of RYTELO and provide us with critical flexibility to fuel continued growth and invest in our future."
Recent Business Highlights
Strong execution in the first full quarter of U.S. launch, with net product revenue for RYTELO (imetelstat) of $28.2 million in the third quarter of 2024.
In November 2024, completed synthetic royalty and debt financing transactions to strengthen our cash position and further solidify our balance sheet while providing strategic flexibility to invest in our future. We entered into a synthetic royalty agreement with Royalty Pharma providing $125 million of capital in exchange for tiered royalty payments. We also entered into a 5-year, senior term loan agreement with Pharmakon for up to $250 million, from which we have drawn a first tranche of $125 million, a portion of which was used to fully repay amounts owed under our existing loan with Hercules Capital, Inc. and Silicon Valley Bank ($86.5 million), which has now been terminated, with the ability to borrow another $125 million prior to the end of 2025, subject to specified conditions.
Jim Ziegler appointed as Executive Vice President, Chief Commercial Officer in September 2024, to spearhead Geron’s global commercial strategy and operations, lead the commercial organization and be responsible for driving growth of RYTELO. Mr. Ziegler brings more than 25 years of commercial experience in the biopharmaceutical industry, spanning leadership, strategic and operational roles in both large and smaller organizations.
New data to be presented at upcoming American Society for Hematology (ASH) (Free ASH Whitepaper) Annual Meeting highlights the potential of imetelstat in myeloid hematologic malignancies (please view ASH (Free ASH Whitepaper) press release for more details).
Upcoming Milestones
We expect review of the Marketing Authorization Application (MAA) for RYTELO in lower-risk MDS by the Committee for Medicinal Products for Human Use (CHMP) could be completed in late 2024 or early 2025, with potential approval by the European Commission in the first half of 2025. We are continuing to prepare for the potential launch of RYTELO in the EU, and subject to regulatory approval, are planning to commercialize RYTELO in select EU markets commencing in 2026.
We expect an interim analysis from the Phase 3 IMpactMF trial in patients with relapsed/refractory MF may occur in early 2026 (when approximately 35% of planned enrolled patients have died) and the final analysis may occur in early 2027 (when approximately 50% of planned enrolled patients have died), based on our most recent planning assumptions for enrollment and death rates in the trial.
Third Quarter 2024 Financial Results
As of September 30, 2024, we had approximately $378.9 million in cash, cash equivalents, restricted cash and marketable securities. On a pro forma basis, including gross proceeds from the upfront payment under the Royalty Pharma Agreement and the first tranche of the Pharmakon loan and after repayment of our existing debt, we had approximately $542.4 million in cash, cash equivalents, restricted cash, and marketable securities as of September 30, 2024.
Net Loss
For the three and nine months ended September 30, 2024, the Company reported a net loss of $26.4 million, or $0.04 per share, and $149.2 million, or $0.23 per share, respectively, compared to $44.8 million, or $0.08 per share and $132.2 million, or $0.23 per share, respectively, for the three and nine months ended September 30, 2023.
Revenues
Total product revenue, net for the three and nine months ended September 30, 2024, was $28.2 million and $29.0 million, respectively.
Total net revenue for the three and nine months ended September 30, 2024, was $28.3 million and $29.5 million, respectively, compared to $164,000 and $214,000 for the same periods in 2023. The increase in revenue is due to product revenue from U.S. sales of RYTELO, which was available for prescribers to order from specialty distributors as of June 27, 2024.
Operating Expenses
Total operating expenses for the three and nine months ended September 30, 2024, were $56.5 million and $183.1 million, respectively, compared to $47.8 million and $139.9 million for the same periods in 2023.
Cost of goods sold was approximately $456,000 and $473,000 for the three and nine months ended September 30, 2024, respectively, which consisted of costs to manufacture and distribute RYTELO.
Research and development expenses for the three months and nine months ended September 30, 2024, were $20.2 million and $80.3 million, respectively, and $29.4 million and $92.1 million, for the same periods in 2023. The decrease is primarily due to manufacturing and quality costs that were capitalized in the current period due to FDA approval of RYTELO, compared to being expensed in the prior period.
Selling, general and administrative expenses for the three and nine months ended September 30, 2024, were $35.9 million, and $102.4 million, respectively, and $18.4 million and $47.7 million for the same periods in 2023. The increase in selling, general and administrative expenses primarily reflects higher commercial launch expenses, and increases in headcount and related expenses in connection with the U.S. launch of RYTELO.
Interest income was $4.9 million and $14.4 million for the three and nine months ended September 30, 2024, respectively, compared to $5.0 million and $13.6 million for the same periods in 2023. The decrease in interest income for the three months ended September 30, 2024, compared to the same period in 2023 was due to a decrease in interest rates. The increase in interest income for the nine months ended September 30, 2024, compared to the same period in 2023 primarily reflects a larger marketable securities portfolio with the receipt of net cash proceeds from the underwritten offering completed in March 2024, as well as higher yields from recent marketable securities purchases.
Interest expense was $3.0 million and $9.8 million for the three and nine months ended September 30, 2024, respectively, compared to $2.1 million and $6.0 million for the same periods in 2023. The increase in interest expense primarily reflects rising interest rates.
2024 Financial Guidance
For fiscal year 2024, we expect total operating expenses to be in the range of approximately $260 million to $270 million, which includes non-cash items such as stock-based compensation expense, amortization of debt discounts and issuance costs, and depreciation and amortization.
Based on our current operating plans and assumptions, we believe that our existing cash, cash equivalents, and marketable securities (including the $250 million gross proceeds received under the Pharmakon loan and Royalty Pharma agreements), together with anticipated revenues from U.S. sales of RYTELO, will be sufficient to fund our projected operating requirements for at least the next 12 months from the date of this press release. We believe that our projected financial resources will be sufficient to support commercial launch of RYTELO in the U.S. and potential launch in the EU, complete the Phase 3 IMpactMF trial in relapsed/refractory MF, invest in supply chain redundancy for RYTELO, and fund our general working capital requirements.
Conference Call
Geron will host a conference call at 8:00 a.m. ET on Thursday, November 7, 2024, to discuss business updates and third quarter 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 RYTELO (imetelstat)
RYTELO (imetelstat) is an FDA-approved oligonucleotide telomerase inhibitor for the treatment of adult patients with low-to-intermediate-1 risk myelodysplastic syndromes (LR-MDS) with transfusion-dependent anemia requiring four or more red blood cell units over eight weeks who have not responded to or have lost response to or are ineligible for erythropoiesis-stimulating agents (ESAs). It is indicated to be administered as an intravenous infusion over two hours every four weeks.
RYTELO is a first-in-class treatment that works by inhibiting telomerase enzymatic activity. Telomeres are protective caps at the end of chromosomes that naturally shorten each time a cell divides. In LR-MDS, abnormal bone marrow cells often express the enzyme telomerase, which rebuilds those telomeres, allowing for uncontrolled cell division. Developed and exclusively owned by Geron, RYTELO is the first and only telomerase inhibitor approved by the U.S. Food and Drug Administration.