Geron Corp (GERN) 2021 Q1 法說會逐字稿

Good day and thank you for standing by, and welcome to the Q1 2021 Geron Earnings Conference Call. (Operator Instructions) I would now like to hand the conference over to your speaker today, Olivia Bloom. Please go ahead.

Great. Thank you, Selin, and good afternoon, everyone. Welcome to this conference call to discuss Geron's first quarter 2021 financial results and recent company events. I am joined today by Dr. John Scarlett, Geron's Chairman and Chief Executive Officer; and Dr. Aleksandra Rizo, Geron's Chief Medical Officer.

After the market closed today, we announced our first quarter 2021 financial results via press release, which is available on our website. In addition, an archive of this webcast will be available on our website for 30 days.

Before we begin, please note that this presentation and question-and-answer session will contain forward-looking statements relating to Geron's plans, expectations, time lines, beliefs, statements of potentiality and projections. These include, without limitations, those regarding the expected time lines for completion of enrollment of and the results from the IMerge Phase III and IMpactMF clinical trials and submission of an NDA, the potential for positive outcomes from IMerge Phase III and IMpactMF, potential approval of imetelstat by regulatory authorities and its commercialization, the expectation that Geron's current financial resources will be sufficient to fund operations until the end of 2022 and that its operating expense burn in 2021 will be between $108 million and $112 million, and that imetelstat has the potential to be disease-modifying and alter the course of MDS and MF.

These and the other forward-looking 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, those regarding that the company may be unable to overcome all the enrollment, clinical, safety, efficacy, technical, scientific, operational, manufacturing and regulatory challenges to meet the expected time lines for the IMerge Phase III and IMpactMF clinical trials due to COVID or otherwise.

But in the Phase III clinical trials, imetelstat may not prove to be as safe or efficacious as in the Phase II trials and may not demonstrate that it is safe, efficacious and disease modifying. Such regulatory authorities may not permit for further development of imetelstat on a timely basis or at all and may not approve it for commercialization, and that Geron may need additional financial resources before the end of 2022 for the development and commercialization of imetelstat.

Detailed 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 explained under the heading Risk Factors in Geron's quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the Securities and Exchange Commission. 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.

And now I will turn the call over to Dr. Scarlett. Chip?

Thanks, Olivia, and good afternoon, everyone. During the first quarter of 2021, we continued to make progress in our 2 imetelstat Phase III studies with registrational intent. First, enrollment continues to increase in our ongoing IMerge Phase III trial. This trial is evaluating imetelstat in transfusion-dependent lower-risk MDS patients who are relapsed or refractory to erythropoiesis-stimulating agents or ESAs. Last December, we had completed half of the planned enrollment of 170 patients in this trial. I'm happy to report that as of today, we have now achieved 75% of the planned enrollment. We continue to expect this trial to be fully enrolled in the second half of this year and for top line results to be available as early as the end of 2022 or in the first half of 2023.

Next, in IMpactMF, our second Phase III trial that's evaluating imetelstat in patients with Intermediate-2 or High-Risk Myelofibrosis who are refractory to prior treatment with the JAK inhibitor, we recently announced the first patient being dosed. This trial is the first trial of its kind in refractory MF patients with overall survival as the primary endpoint. Based on our current planning assumptions, we continue to expect the planned enrollment of 320 patients for this trial to be complete in 2024.

Next, we are progressing on our preliminary activities for NDA and commercial readiness, which include long lead time manufacturing and quality activities as well as developing a comprehensive organizational foundation to support a high-growth and commercial stage company. Lastly, we look forward to presenting new data and analyses from our Phase II imetelstat trials at the upcoming European Hematology Association meeting, EHA, with the 2 abstracts that we submitted. The abstracts will be available online at ehaweb.org on May 12.

Looking ahead over the next 3 years, we remain committed to achieving top line results in IMerge Phase III, gaining regulatory approval of imetelstat and commercially launching this highly differentiated drug and lower-risk MDS.

With that, I'll turn the call over to Aleksandra. Aleksandra?

Thank you, Chip, and good afternoon, everyone. As supported by our compelling Phase II data, we believe imetelstat is clearly differentiated from the currently available treatment for lower-risk MDS patients who are relapsed or refractory to ESAs. Our numerous publications and presentations have reported meaningful and durable transfusion independence in high transfusion burden patients after treatment with imetelstat, including a median duration of transfusion independence of 20 months.

In our IMerge Phase III trial, as Chip mentioned previously, we have now achieved 75% of the planned enrollment. It appears patients are becoming more comfortable leaving their homes to participate in clinical trials, positively due to the increase in vaccination rates and a decreasing number of severity of COVID cases in many of the countries where our sites are located.

Moving on to our second Phase III trial, IMpactMF. Last month, we dosed the first patient in that trial. This was an important milestone in developing imetelstat for refractory myelofibrosis patients. Patients who failed or no longer respond to JAK inhibitor treatment have a median overall survival of only approximately 14 to 16 months. This is a clear indicator of the unmet need in this patient population. As Chip mentioned, the IMpactMF is the only study in refractory MF with overall survival as the primary endpoint.

As the timing of results from this study is event-driven, the final analysis is planned to be conducted after more than 50% of the patients planned to be enrolled in the trial have died. An interim analysis is planned to be conducted after approximately 70% of the total projected number of death events for the final analysis have occurred. The number of events required to conduct the interim analysis could occur before enrollment is complete as the events will accrue throughout the enrollment period. Based on current planning assumptions, our expected time line for IMpactMF study remains the same as we previously guided, with full enrollment and interim analysis projected to occur in 2024 and the final analysis in 2025.

We're actively conducting site initiation activities around the world and recruiting patients. We currently plan to engage over 180 sites across 5 continents. We plan to employ similar enrollment boosting strategy for IMpactMF that we used for IMerge Phase III. Among the others, we will retain clinical (inaudible) to interact with sites-covered patients and their physicians to the potential benefits of participating in IMpactMF. We will also utilize social media practice to help drive patient awareness and recruitment.

I look forward to the upcoming EHA2021 Virtual Congress in June when our investigators present new clinical data and analysis from our Phase II trials. The abstracts for these presentations will be available online later this week. This presentation will once again highlight imetelstat's potential to redefine the standard of care for MDS and MS patients.

Now, I'd like to hand the call over to Olivia to discuss our first quarter financial results. Olivia?

Thank you, Aleksandra, and good afternoon again, everyone. As of March 31, 2021, the company had approximately $245 million in cash and marketable securities, which we expect will be sufficient to fund our operations until the end of 2022. The increase in operating expenses for the first quarter of 2021 compared to the same period in 2020, was primarily driven by higher development expenses. This increase in R&D expenses includes higher clinical development costs associated with our 2 ongoing Phase III clinical trials as well as the initiation of long lead time manufacturing and quality activities such as manufacturing validation batches of imetelstat.

These validation activities conducted in collaboration with our contract manufacturers, our cornerstone for the planned NDA for imetelstat in lower-risk MDS that we expect to file in 2023, assuming positive top line results from IMerge Phase III. These validation batches will also provide the main data and information by which the commercial shelf life of imetelstat will be set at the time of product launch.

General and administrative expenses for the first quarter of 2021 increased slightly compared to the same period in 2020. This increase reflects our initial work to transform Geron into an enterprise fully prepared to rapidly ramp in both size and complexity in order to support potential commercialization efforts. Upon execution of our debt facility in September 2020, we drew down $25 million of the $75 million potential commitment. As such, interest expense for the first quarter of 2021 was $743,000. For net other income in the first quarter of 2021, we sold all of our holdings in an equity investment, resulting in a net realized gain of $1.2 million, including foreign currency translation adjustments.

I'd like to conclude my comments by reaffirming our 2021 financial guidance. We continue to expect operating expense burn to range from $108 million to $112 million. This burn includes cost of support to ongoing Phase III clinical trials, produce validation batches of imetelstat at contract manufacturers, and to begin preparing regulatory filings for approval and commercial readiness. Financial guidance is based on a set of assumptions at a point in time. And if the company's plans change, causing assumptions to be revised, then we will update guidance at that time.

With that, we have concluded our prepared remarks this afternoon. I will hand the call back to Chip and ask the operator to open the line for questions.

(Operator Instructions) We have our first question coming from the line of Justin Walsh with B. Riley Securities.

Congratulations on the progress. Can you give us some color on what types of analyses we can expect at EHA and potential read-through to the Phase III trials?

Yes. I think unfortunately, Justin, the embargo rules prevent us from really commenting on the EHA abstracts or their content until they're published. And that happens on Wednesday. So we expect to really comment at that point in time.

All right. Then maybe just -- I don't know if you can comment on this. I'm wondering if the data cutoff for the abstract, do you expect that will be the same as what we see at the conference itself?

Aleks, do you want to comment?

I would refrain from commenting, Chip. I would just wait for the abstracts to come online.

Okay. Then I'll have one more quick question here again. I'm just curious, the -- I'm correct in thinking that IMpactMF, you do not enroll patients who are receiving investigational therapies, correct? It's just current best available therapy? And then assuming that that's -- that I'm right on that, do you think that if you're having sort of challenges in enrolling rapidly enough that you'd be able to change the enrollment criteria? Or would that potentially have some implications for your survival analysis?

Go ahead, Aleks.

Right. Suggesting you're correct, at the moment we do not allow enrollments that are on other investigational therapies. We will just have to wait and see how things evolve. But typically in clinical trials, we do not allow our patients on investigational treatment to come on your trial as well.

We have our next question coming from the line of Bonnie Quach with Stifel.

This is Bonnie on for Steve Willey at Stifel. I just have a few small questions about enrollment in the IMerge trial and the impact of COVID. Do you have any thoughts on the effect of COVID on the type of patients enrolled? And for example, do you think that the patient population would skew more towards those with a higher transfusion burden since they're more willing to take the additional risks of going to a hospital and partaking in a clinical trial? And also do you anticipate being more close to luspatercept patients? Any color would be helpful.

Aleks?

Sure. I can take that, Chip. So I mean, I think it's interesting. So I'll give first an overall kind of our feeling of the enrollment and then maybe I'll answer to your 2 specific questions. So although we are seeing that the number of the COVID-19 cases is declining in certain regions, other regions are experiencing resurgence, right? So -- and then we have these new variants that are coming off as well. So it's really the -- it's really unpredictable or uncertain of that -- about the pace at which the clinical trial operations may normalize. However, at the moment, right, it is likely, like you are speculating, to say that maybe patients with a higher transfusion burden will be enrolled in a clinical trial. It's just very difficult to comment on that. The good side is that imetelstat has really works well in these patients. So if we have them on the trial, I wouldn't be worried about it.

So I think that was kind of one of your questions and I'm sorry, I'm breaking on the other one. So one was the -- oh, the luspatercept and the possible effect of luspatercept. I mean, luspatercept is doing great, right? The launch has been robust and that validates the unmet need in the market potential in this patient population. Remember that the label for luspatercept is in RS-negative -- sorry, in RS-positive patients only whereas our trial allows enrollment for all lower-risk MDS patients irrespective of presence of ring sideroblast. So while there might be some small impact on the patients that are RS-positive, which -- lets remember, it's about more than 20%, we do not expect to have any impact on the majority or in the bigger portion of the patient population in lower-risk MDS patients.

Thank you. This concludes the Q&A portion of the call and we'll hand it over to John Scarlett, Chief Executive Officer, for closing remarks.

Well, thanks very much for joining us today. It's been a busy earnings season. So we appreciate everyone who had the opportunity to dial in and participate. We're very excited about the progress we're making to bring this very important drug to patients. We're planning for Geron to become a commercial company in 2023 with the potential launch of imetelstat in lower-risk MDS. The markets for both lower-risk MDS and refractory MF are highly attractive, and we look forward to sharing more updates with you as we progress through the year. Thanks, everyone, and have a good afternoon.

This concludes today's conference call. Thank you for participating. You may now disconnect.