Geron Corp (GERN) 2012 Q4 法說會逐字稿

Good day, ladies and gentlemen good day and welcome to the quarter 4 2012 Geron earnings conference call. My name is Ian. I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question and answer session toward the end of the conference. (Operator Instructions). And, as a reminder, this call is being recorded for replay purposes. Now I'd like to hand the call over to Ms. Anna Krassowska, head of investor relations. Please proceed, ma'am.

Thank you, Ian. Good morning, everyone, and thank you for joining us for the Geron fourth quarter of 2012 earnings call. With me are Dr. John Scarlett, President and Chief Executive Officer; Olivia Bloom, our Senior Vice President Finance and Chief Financial Officer; Dr. Steve Kelsey, our Executive Vice President, Head of R&D and Chief Medical Officer; and Craig Parker, our Senior Vice President, Corporate Development.

Yesterday we issued a press release of reported results of fourth quarter and year end of 2012. This release can be found on our website at www.Geron.com. Today's call is also being webcast live on our website and will be available for replay until April 13.

Before we begin, I would like to remind listeners that, except for statements of historical fact, the statements in this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These include, without limitation, statements regarding the timelines and plans for Geron's clinical trial enrollment, clinical results, and data; the therapeutic potential of the imetelstat; the closing of the BioTime [backed] transaction; and financial or operational projections and requirements, including spending guidance.

These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is 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 September 30, 2012. 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. I will now hand the call over to John Scarlett, CEO. Chip?

Thanks, Anna. Good morning everyone. We will begin today's call with a summary of the operating results for the fourth quarter and year ended December 31 of 2012 from Olivia. Steve will then review the progress of our clinical programs for imetelstat.

First, topline results from our trial in essential thrombocytopenia were presented at ASH. We were very pleased by these data that showed durable hematologic and molecular responses in patients who were refractory to, or intolerant of, standard therapies.

Second, preliminary results from a biomarker trial in multiple myeloma were published in the ASH supplement of the journal Blood. The data showed a rapid and significant decrease in myeloma progenitor cells detected in the blood over the course of imetelstat treatment. Data from both of these trials in hematologic malignancies support our hypothesis that imetelstat selectively inhibits the clonal proliferation of leukemia progenitors.

Third, initial results from a pre-specified exploratory subgroup analysis of results from the non-small cell lung cancer trial based on tumor telomere length suggested that tumors -- mature telomeres may have increased (technical difficulty) telomerase dependence and thus may be more responsive to telomerase inhibition. We recently completed an updated analysis the results from this trial that included a more mature follow-up of clinical data and a re-test of patient tumor samples using a refined prospective assay to measure telomere length.

In this analysis, the magnitude of the treatment of affecting patients whose tumors had short telomeres was not reproduced. We are evaluating the impact of this updated analysis on our plans for potential treatment of imetelstat in solid tumors, including non-small cell lung cancer. Steve will speak to these data and outline our ongoing development activities for imetelstat. Following those updates, we will be pleased to take your questions. I'll now hand the call over to Olivia to review the fourth quarter financial results.

Thanks, Chip. Good morning, everyone. For the fourth quarter of 2012, Geron reported a net loss of $15.9 million, or $0.12 per share, compared to $31.9 million or $0.25 per share for the comparable 2011 period. Net loss for 2012 was $68.9 million or $0.54 per share, compared to $96.9 million or $0.78 per share for 2011.

Revenues were $689,000 in the fourth quarter of 2012 compared to $251,000 for the fourth quarter of 2011. Revenues for the year ended 2012 were $2.7 million compared to $2.4 million for 2011. Revenues for the fourth quarter and year ended 2012 and 2011 reflect [funding] under a collaboration agreement as well as royalties and license fees from various agreements.

Total operating expenses for the fourth quarter of 2012 were $19.2 million compared to $30.7 million for the fourth quarter of 2011. Total operating expenses for the year 2012 were $74.5 million compared to $98.6 million for 2011.

Total operating expenses for the fourth quarter and year ended 2012 included restructuring charges of $2.7 million related to the discontinuation of GRN1005 program. And total operating expenses for the fourth quarter and year ended 2011 included restructuring charges of $5.4 million related to the discontinuation of the stem cell program.

R&D expenses for the 2012 fourth quarter were $11.8 million compared to $19.7 million during the same period in 2011. R&D expenses for the year 2012 were $51.4 million compared to $69.3 million for 2011.

The decreases in R&D expenses for the fourth quarter and year ended 2012 compared to the same periods in 2011 were primarily a net result of reduced scientific supply costs and personnel-related costs due to the discontinuation of the Company's stem cell program and reduced costs for the manufacturing of imetelstat drug product resulting from the timing of manufacturing campaign, which were all partially offset by higher costs for the Company's GERN1005 program.

G&A expenses for the fourth quarter were $4.7 million compared to $5.5 million during the same periods in 2011. G&A expenses for 2012 were $20.4 million compared to $23.8 million for 2011. The decreases in G&A expenses for the fourth quarter and year ending 2012 compared to the same periods in 2011 were primarily the net result of lower non-cash stock-based compensation expense, partially offset by increased legal and consulting costs associated with the Company's intellectual property portfolio and the divestiture of the stem cell program.

Non-cash operating expenses for the fourth quarter and year ended December 31, 2012 were approximately $2.7 million and $9.1 million, respectively, and primarily included stock-based compensation, write-downs of excess lab equipment related to the GRN1005 program and expense for stock issued for services. Net cash operating expenses for the comparable 2011 period were $6 million and $25.2 million, and primarily included stock-based compensation, write-downs of excess lab equipment related to the Company's stem cell program, depreciation, and expense for stock issued for services.

Interest and other income for the fourth quarter of 2012 amounted to $2.6 million compared to $204,000 for the comparable 2011 period. Interest and other income for 2012 was $3.1 million compared to $1 million in 2011. Interest and other income for the fourth quarter and year-end 2012 included receipt of $2.5 million for the assignment of Geron's telomerase activation technology.

We ended 2012 with $96.3 million in cash and investments, and we have not incurred any impairment charges on our marketable securities portfolio. For 2013, we are projecting operating expense burn of approximately $33 million, which includes approximately $2.8 million in payments related to the recent restructuring.

I will now turn the call over to Steve, who will discuss the clinical results with imetelstat from the fourth quarter and outline our potential future development plans.

Thank you, Olivia. At the end of last year we reported data from two studies of imetelstat in hematologic malignancies and essential thrombocytopenia, and in multiple myeloma. I'd like to start by briefly mentioning the data from the multiple myeloma study.

We designed this study to directly measure the effect of imetelstat on malignant progenitor cells, provide evidence that imetelstat can impact malignant cells responsible for driving myeloma. Preliminary data, which were reported in the ASH supplement of Blood, showed a rapid and significant decrease in myeloma progenitor cells that were detected in the blood over the course of imetelstat treatment in 8 out of 9 patients. In addition, several patients experienced delayed but sustained clinical responses as measured by standard criteria.

The trial is no longer enrolling patients, and we expect the full clinical data from all patients enrolled in the multiple myeloma trial will be available in 2013. We are currently not prioritizing the further development of imetelstat in lymphoid malignancies and have no plans for further development in multiple myeloma.

Data from the Phase II study in essential thrombocythemia were presented at the 2012 Annual Meeting of the American Society for Hematology in December. Topline results were reported from the first 14 patients enrolled in the study, all of whom were refractory to or intolerant of standard therapies.

Platelet counts were reduced in all patients, producing a 100% hematologic response rate. And 13 of the 14 patients achieved a complete hematologic response with normalized platelet count.

Among the seven patients who had a JAK2 V617F mutation, the molecular response rate is 86% and responses were achieved within 3 to 6 months after beginning treatment with imetelstat. As we saw in the multiple myeloma trial, the ET data suggests a relatively selective inhibition of the malignant progenitor cells responsible for the disease.

In the ET study, imetelstat was initially administered weekly by intravenous infusion during an induction phase. After achieving a complete hematologic response, which occurred in a median time of approximately 6 weeks, a maintenance phase was begun in which dosing frequency was modified based on a patient's individual response profile, generally decreasing with time.

The responses observed being durable, all patients who achieved a complete hematologic response remain on therapy, including six for more than one year. I can also add that one patient has just begun year three on the study; the last patient, enrolled in December, has just begun dosing. Median time on this study is currently approximately 33 weeks.

As of the latest data cut for safety, from the first 16 patients in the trial, long-term administration of imetelstat was generally well-tolerated. Of those 16 patients, 15 patients remain in the trial and no patients have discontinued due to adverse event. The majority of the non-hematologic adverse events were mild to moderate in severity, with the most frequently reported being gastrointestinal events, infections, muscular and joint pain, and fatigue.

Infections appeared to be increased in incidence, although without a comparator on, it is difficult to assess this accurately. Most infections were considered Grade 1 to 2 or mild to moderate in severity, and all were managed easily with conventional therapies. No drug-related, non-hematologic, Grade 4 adverse events were reported.

Neutropenia was the most frequently observed hematologic abnormality. Two patients had Grade 4 neutropenia. No cases of febrile neutropenia were reported. No patients with Grade 4 neutropenia had a concurrent infection.

One suspected thromboembolic event, which was assessed as not being related to imetelstat, has been reported. No bleeding events associated with thrombocytopenia were reported.

At least one abnormal liver function test was observed in most patients. The majority were Grade 1 or 2 elevations in ALT or AST. Reversible Grade 2 to 3 elevations in ALT with Grade 1 to 3 elevations in AST were reserved observed in four patients within a few weeks of starting imetelstat. These abnormalities resolved and did not reoccur with ongoing imetelstat treatment.

With longer dosing, Grade 1 increases in alkaline phosphatase were in observed in seven patients. Associated with mostly Grade 1, and in some cases, Grade 2 unconjugated in four of the patients. The etiology of this is unclear and is currently being further investigated.

The ET study was closed to new patient enrollment in December last year, when we determined that we have a sufficient number of patients to be confident of the hematologic and molecular response data that we had observed and reported at ASH. A total of 20 patients have been enrolled in the trial, which includes 18 patients with ET and two patients with polycythemia vera, though. Patients on the study may continue to receive imetelstat for up to three years according to the study (technical difficulty). We expect to report periodic updates from the study at future scientific meetings.

Most ET patients are served well with currently available therapies. The purpose of the study in ET was to provide proof of concept for the potential use of imetelstat as a treatment for various other hematologic myeloid malignancies, including myelofibrosis, myelodysplastic syndromes, and acute myeloid leukemia. However, the ET data exceeded our expectations and we are currently working with expert advisers to assess whether there is any potential for the further development of imetelstat in ET.

Based on the results in ET, Dr. Ayalew Tefferi at the Mayo Clinic, who is an expert in myeloproliferative neoplasms, has begun an investigator-sponsored trial to evaluate safety and efficacy of imetelstat in patients with myelofibrosis, and to determine a dosing schedule for further trials in this indication. Myelofibrosis is a myeloproliferative neoplasm in the same spectrum of diseases as ET. Patients with myelofibrosis often carry the JAK2 V617F mutation in their bone marrow.

Occasionally, ET evolves into myelofibrosis. JAK inhibition is currently considered a standard of care for myelofibrosis in countries where ruxolitinib, a JAK inhibitor, is approved. There is no evidence that JAK inhibitors selectively inhibit proliferation of the leukemic clone responsible for the disease and, thus, they may not be disease-modifying.

The Mayo Clinic trial is evaluating the safety and efficacy of imetelstat in patients with myelofibrosis and determining the optimal dosing schedule for further evaluation. It is an open-label trial in intermediate or high risk patients with primary or secondary myelofibrosis and may enroll up to 29 patients. Patients receive imetelstat by intravenous infusion over two hours every 21 days.

The primary endpoint of this trial is overall response rate measured by criteria such as clinical improvement, partial remission, or complete remission, according to International Working Group criteria. The secondary endpoints include reduction of spleen size, transfusion independence, safety, and tolerability.

The Mayo Clinic is enrolling and dosing both JAK inhibitor naive patients and patients who have previously been treated with one or more JAK inhibitors. If no safety or tolerability issues are observed, dose escalation will be considered. We are in the initial planning stages of a Geron-sponsored trial of imetelstat in myelofibrosis which will be informed by data from the Mayo Clinic trial, if positive.

In addition, we intend to expand our directed program of investigator-sponsored trials in 2013 to other hematologic myeloid indications, such as acute myeloid leukemia and myelodysplastic syndromes.

Turning to the non-small cell lung cancer study, in September we reported an unplanned interim analysis of our randomized Phase II trial in advanced non-small cell lung cancer, evaluating imetelstat as maintenance treatment following platinum-based induction chemotherapy compared to observation. The analysis suggested a modest trend of efficacy in favor of the imetelstat arm.

Subsequently, in December we reported the analysis of a pre-specified subgroup of non-small cell lung cancer based on a retrospective measurement of tumor telomere length. This analysis suggested the patient whose tumors had short telomeres at baseline experienced an increase in progression-free survival when treated with imetelstat in comparison to patients in the control arm. The treatment effect was not observed in imetelstat-treated patients whose tumors had medium to long telomeres.

We have been refining and evaluating candidate assays to prospectively measure telomere length in individual patient tumor samples. We recently completed an updated analysis that included a more mature follow-up of the clinical data and a retest of patient tumor cell (inaudible) using a refined prospective assay to measure tumor telomere length. In this updated analysis, the magnitude of the treatment effect in patients whose tumors have short telomeres was not reproduced.

We are evaluating the impact of this updated analysis on our plans for the potential development of imetelstat in solid tumors, including non-small cell lung cancer. Data from the non-small cell lung cancer trial have been accepted for presentation at the American Association for Cancer Research Annual Meeting to be held in April of this year.

We have also begun the product process of screening tumor banks to identify other solid tumor types where a significant number of patients have tumors with short telomeres. This may help us understand the potential for imetelstat in the treatment of solid tumors outside of non-small cell lung cancer. I will now turn the call back to Chip.

Thanks, Steve. Today Geron is in a strong business position. At year end we had approximately $96 million in cash and investments.

Imetelstat was discovered and developed entirely by Geron. We own the compound with US patent protection through at least 2025, and we have no obligations to third parties.

With positive clinical data in hand, we are moving forward with applying this information to position imetelstat to become an important drug with a novel mechanism of action that gives it the potential to address currently unmet needs in multiple hematologic myeloid indications.

With that, operator, let's open the call to questions, please.

(Operator Instructions) Brian Klein, Stifel Nicolaus.

Great. Thanks for taking my questions. So, first, regarding the IST trial of myelofibrosis from the Mayo Clinic, can you give us a sense of when we might see initial data out of that? And also, when would you plan on initiating the Company-sponsored trial?

I think we had previously said that we expect to have data at Geron in the summer of this year. And, clearly, we haven't yet decided -- because it's an investigator-sponsored trial, we haven't decided how that information will be disseminated into the public domain. But I think it's likely to be toward the end of this year.

The timing of the Geron-sponsored trial, I suspect, would be within six months of that, because we have really have to use -- the whole point of that trial is to guide the design of the sponsored trial. So if the data is sufficiently encouraging, then I think there is likely to be a 6 to 9 month lag time between receiving that data and us getting a trial out of the door. I think those are fairly standard metrics. I'm not sure I'm giving you any information that is terribly unique to Geron or to this program.

No, that's helpful. I guess I'm just trying to understand what ongoing clinical activities will be conducted at Geron this year for imetelstat other than your already ongoing trials.

Well, I think that we are taking the same approach with the other myeloid malignancies as we are with myelofibrosis, which is the -- we feel very strongly that our sponsored clinical program is going to be more effective and more likely to be positioned for success if we have a small amount of data from an investigator-sponsored study initially. So the investigator-sponsored approach thus far in myelofibrosis has served us extremely well, and I think it's a model that we will be applying to the other hematologic malignancies.

Great. In terms of solid tumor impact on imetelstat, would you expect that the solid tumor program at this point is not going to move forward at all? Or do you still anticipate looking at the telomere lengths to potentially revise that aspect of the clinical development?

It's very difficult for us to say. We have a lot of data. We haven't fully assimilated it yet. We are going to present it all at AACR.

And I think we will be in a much better position once we've presented it and we've had the opportunity to discuss the data with our lung cancer investigators and other advisers, and look at the data from the screening of the other tumor types. I think we will be in a much better position to map out exactly how we decide to proceed in that direction.

There are, of course -- I do want to stress, and I think this is important. There are fundamentally two separate classes of solid tumors that we have these carcinomas which we have been hitherto focused on. And then, of course, there are the sarcomas, which are predominantly pediatric diseases.

We are focusing our hematologic program on the third class of cancer, which is the leukemias. It may well be that the biology is very different across those three classes of cancer, and I don't want to preempt anything at this very early stage.

Great. Thanks for taking my questions.

Chad Messer, Needham & Company.

Yes. Thanks for taking my question. Just, again, on the assay for telomere length, you said you refined it; you went back, you had a more mature data set in lung cancers. Have you gotten the assay refined to a point where you are happy with it? Are you still refining it further? And when you go and screen other cancer types, are you using this same refined version that you did the second analysis in lung cancer?

Okay. I think -- I honestly -- I could spend an awful long time talking about this now. I honestly think that the best thing to do is to have a more informed discussion about this after we have presented the data at AACR.

The answer is, just to give you a very quick answer to your question, we have a number of different assays -- two predominant platform technologies. I think one of them is, at a research level, ready for prospective testing of tumor telomere length. And -- but we have to really spend more time thinking about how that has been applied to the clinical data set.

And, as I say, what we've decided to do is to put the data out in the public domain at AACR, spend the time between now and then getting more input on it, and then I think we can -- we will be able to give you a much better answer to your questions -- those types of questions, particularly.

All right. I appreciate that and look forward to that data next month. And then just a real quick one -- the $2.5 million for telomerase IP, can someone just explain a little bit more about what that payment to you guys was for?

Yes, Chad. The payment was in connection with assignment of intellectual property in connection with our telomerase activation platform, which is a program that we are no longer pursuing here at Geron.

Okay. You have licensed that IP to someone? Is this something you've disclosed before?

Yes, it was disclosed, and it is specifically the patent that supports the telomerase activation application.

Okay. All right. Thank you.

Charles Duncan, Piper Jaffray.

Hi, guys. Thanks for taking my question. First question is on the ongoing myelofibrosis ISP. I think you mentioned that there was an opportunity to move forward with dosing or expanding dosing, should patients be doing okay. And it's an open label trial. So I'm wondering, you've probably been in contact with the investigator. How are things going in that trial?

I think at this stage, all we are prepared to say is -- as it is at a very early stage in the management of what is essentially a chronic disease, I think all we are prepared to say is things are going according to plan.

Are you seeing anything in terms of being able to expand dosing or transfusion independence or sort of it is just too early to say?

It's really too early to make those types of the evaluations. The study started -- if you remember, the study actually started enrolling in late October of last year. So we are really only, what, three months into dosing in the very first patient. So I think really it's too early to make those types of judgments.

The one thing that we are likely to get sooner is information on tolerability, and we do have the opportunity to either increase the dose or increase the intensity of dosing as we did in the -- as I have described for our essential thrombocythemia study. And I think we had already decided our priority, that that would be desirable if we were able to do that. So the reference to that was really to do with the fact that the tolerability data is likely to be available to us before the efficacy data.

Okay. That's helpful. And then, with regard to myeloma, we've talked about this, but I just wanted to clarify. You said earlier in the call that you are not prioritizing myeloma. Does that have more to do with the very robust competitive environment and the dynamics around that? Or is there a concern that you have with regard to potential efficacy or safety of imetelstat in that setting?

I think it is a combination of both. We did Phase I trials in multiple myeloma and I think that we really -- we saw two things that made us de-prioritize lymphoid malignancies in general, and myeloma specifically. One was the fact that we did not see single-agent responses to the extent that had been observed for the other agents that have been successfully developed in multiple myeloma, particularly the IMiDS and the proteasome inhibitors.

And so it's not just an internal decision, but also our investigators felt that they had better agents to be spending their time developing in that disease. The second thing is that if you look at the standard of care for most of the lymphoid malignancies these days, it's really difficult to get away from combining with something that is also cytotoxic. There are some drugs being developed in niche -- or have been developed in niche indications as single agents, but the likelihood is, sooner or later they are going to have to be combined with cytotoxic chemotherapy.

And we already know from our breast cancer program that imetelstat has overlapping toxicities besides toxic chemotherapy. In myeloid malignancies, there is a much greater opportunity to move ahead with single-agent therapies, and so that is why -- one of the reasons why we are -- notwithstanding the efficacy data that we've observed, that is one of the reasons why we are prioritizing that.

Okay. That makes sense to me. I guess I'd like you to kind of wax poetic. If you look out say year-end 2013, 2014 maybe, and fast-forward to say 2016, 2017, where -- what is your vision for imetelstat in terms of clinical development? Is it -- do you have a sense of wanting to be in three different indications and pivotal studies, or where would you like to be in the next few years?

I think this is going to be covered under the forward-looking statement. Is that correct?

Yes. Crystal balling (laughter).

Well, I -- so we've always -- let's firstly remind -- let's remind ourselves where the drug is currently being tested. So currently, first and foremost, we have a program in hematologic myeloid malignancies. And it would not surprise me if the data that we've seen in one of those diseases, ET, is applicable to the other myeloid malignancies.

Now there are going to be subtleties in the clinical differences based on standard of care and biology and what have you. But general principles, it would not surprise me if we were able to develop imetelstat in more than one of the myeloid malignancies, including myelofibrosis, myelodysplasia, possibly even AML and polycythemia vera. So that's that.

The second string to this particular bow is really further evaluation of whether there is any mileage in carcinomas with short telomeres. That, as I said, requires a lot more thought and will be enabled -- that that discussion will be enabled by the publication of the data at AACR.

The third thing, which is really flying under the radar screen -- we don't talk about it very much -- but is definitely happening, is the pediatric program, in which we are collaborating with NCI and, in particular, Children's Oncology Group and the Pediatric Brain Tumor Consortium. Pediatric tumors, as you know, again, biologically very distinct tumors. They are not carcinomas in the main. They are a combination of leukemias and sarcomas and other sort of neuroectodermal type tumors.

And the biology may be much more closely aligned with the adult leukemias than with the adult carcinomas. And so I think we should keep an open mind about the potential for imetelstat in that space as well.

Thanks for the added color, Steve.

Ryan Martins, Lazard Capital Markets.

Hi. Thanks for taking the questions. Steve, just wanted to clarify the information you provided today on the ET trial, was that an update from what was presented at ASH?

Well, the safety information, I think, was a little bit of an update. I don't think the efficacy information was an update. But we will be updating the efficacy data throughout the year. There are a number of opportunities for us to present updated information at various [types of] meetings throughout this year. But I think the safety information may have been -- if not an update, at least a little bit of an elaboration.

Again, just to follow up on that, the little bit increases you've talked about, is that at the ASH update and --?

Well, here is the issue. The reason we are doing this is because, when we presented the data in December at ASH, we basically had to get the data -- the pertinent data into 12 slides. And we focused largely on the efficacy data -- the clinical responses, the molecular responses.

I think we had two slides on safety, and I don't think that the two slides that we presented on safety did full justice to the clinical picture.

We did present at ASH that there were rises in alanine transaminase and aspartate transaminase. What we did -- what we had not observed at the time of the ASH meeting, and I think where you are -- just to really get into the meat of your question, what we had not observed at the time of the ASH presentation were the increases in alkaline phosphatase that had been observed with chronic dosing.

Okay. But were any of these patients qualified to be under [High's Law]?

Sorry. Can you repeat the question?

Were any of these patients High's Law patients as a result?

No, no. No. None of them fulfill the criteria for High's Law or really meet any criteria for hepatocellular damage. But there are two distinct clinical pictures, though. The immediate rises in alanine transaminase appear to be self-limiting and have been observed with drugs where there is some sort of compensation that occurs with continued dosing, and the alanine transaminase tends to resolve.

I have really no idea what the rises in alkaline phosphatase are due to. We were initially concerned because they were associated with an increase in bilirubin, but it turns out that the increase in the bilirubin is almost all unconjugated bilirubin. And that is not consistent with the clinical picture of chemostasis. And so we need to spend a lot more time digging that out.

Okay. And also just to follow up a little bit on another question, I think this was related to your future -- your profile for the Company in terms of the assay in development. Is the focus purely going to be just imetelstat now? Or is there a possibility you could move something else into development, maybe even license in something from another company?

Ryan, this is Chip. As I think everyone knows, we do have a discovery program. We don't feel like we have any particular programs that are ready for public dissemination as of this moment. But we do have an active discovery program that utilizes a proprietary oligo platform that we have utilized for imetelstat. So I think it's a little early to be talking about that, but that is the potential.

At this time, we don't have any plans to go out and acquire other products. Never say never, but at the moment I think we are really focused on telomerase inhibition and imetelstat and the oligo platform. So I think that's where you will see, at least for the foreseeable future, most of our future activities.

Okay. And just finally, on the expense side. I know you are not going to give guidance. But given that some trials have been closed down, how do we think about the R&D and SG&A going forward in 2013? Should we just think about some sort of reduction from what we've seen in 4Q?

Yes. That's correct. Overall, the entire budget for the Company is going to be lower than it was in 2012. As I said, the overall guidance that we are giving for operating expense burn for 2013 is $33 million. And the total R&D expense, as you saw for 2012, was in excess of that.

Okay. Thanks.

George Zavoico, MLV and Company.

Thanks, and hi, everyone. Thanks for taking the question. Steve, thanks for the update -- a little bit of update on the ET. It's nice to see that the results you presented at ASH -- that the durability is sustained in the patient responses.

I have a question regarding the IST with Dr. Tefferi. ISTs are great for signal seeking, but with the focus now start of shifting more on myelofibrosis away somewhat based on the results of the solid tumor, have you considered expanding that IST into more of a Company-sponsored trial; get another site going; enroll it a little bit faster; get to an endpoint a little bit quicker to be able to accelerate the development in myelofibrosis?

Well, I think we have -- certainly are thinking of ways to expedite the development in myelofibrosis, but that would be contingent upon the efficacy and tolerability data from the IST being sufficiently encouraging to do that. I have to say that our plan had been to convert the entire program to the Geron-sponsored program as quickly as we possibly can. But trying to cut as much time off the front end of that program by using the information that we get from the IST.

So the objective is to do two things with this IST. One is to get as much information as we can, so that we don't have to spend time getting that in the Geron-sponsored trial, and secondly, positioning the design of the trial so that we are optimized for success when we do it. And I think it's a delicate balancing act between letting the IST continue to churn out data while we are not finalizing a Geron-sponsored study versus designing a Geron-sponsored study, which actually at the end of the day only does what we could have done more quickly in an IST.

So at the moment, we don't have plans to expand the myelofibrosis IST because it's actually doing pretty well as it currently is set up. But we are planning to move into Geron-sponsored -- a Geron-sponsored program as quickly as we possibly can.

You just answered my next question, was whether you were satisfied with the way it's going. And, clearly, to -- and it seems to me that if you are, and if the enrollment is progressing well, then the timing it would take and the effort it would take to open up another site, by that time you might just have full enrollment at the Mayo Clinic. So, yes, you're right. I guess at this point it becomes more of a balancing act where time and effort would be best spent.

And then, like I said -- like you said, if you are satisfied with the way it is going, then perhaps actually growing and expanding the trial, the IST would actually be counterproductive.

Yes. As I said, right now the first part of the trial was largely directed toward getting safety tolerability data on the initial dosing schedule. And I think that the Mayo Clinic at Rochester is doing a fine job at getting that information for us. So I don't think that we need to work with them to change that right now (multiple speakers).

Really, we have a very, very dynamic relationship with Dr. Tefferi. And I know that the collaborative nature of this arrangement is such that is there is -- if it is desirable to make changes to the way the trial is set up that we will be able to do that very quickly.

And Dr. Tefferi's clinic is well-recognized as a national center of excellence for myelofibrosis. I presume the patients are coming in from pretty much all over.

I think his reputation extends beyond the United States. I would say he is an internationally recognized expert and, yes, patients are coming in from all over.

Okay. Good.

It's a very, very -- it's a very well-renowned, highly efficient outfit. And, of course, this is -- for them, this is bread and butter to them. Evaluating new drugs in myelofibrosis is something that they do very effectively.

Okay. Great. Thank you very much.

Robert Lawton, Catoosa Fund.

Hi. Thanks for taking the call. Couple of questions. First as a bit of housekeeping, it seems to me that the Company has a tradition of conducting the conference calls -- sorry. Let me rephrase that.

You guys put out your Ks on one day after the bell and you have a conference call typically the following morning prior to the bell, which is, A, unusual and, B, in my view, if you will forgive me, kind of dumb, as we are having this conversation 15, 20 minutes into the trading day. Is there some reason for that that I am failing to understand? And if -- period; that is the core question mark.

Robert, I don't think that we have any particular strategy or plan. It plays out on an individualized basis each time. Basically, we put out the K when it's ready. And we don't try to time it specifically, so there is no specific intent there.

No, no. Sorry. The question has to do with the difference between the K versus the conference call. Why not just have, as pretty much every other Company that is listed, in my view, does, have a conference call at the same time as the K, meaning after it's released, A, and, B, when the market is not in session?

We understand. We will take your points and certainly consider them for future calls. Thanks.

Sure. Okay. A couple other follow-up questions. Chip, I guess I'll direct this question to you. And, you know, with the greatest respect and my personal feelings for you aside, the fact remains, since you have arrived at the Company, the share price is down in the neighborhood of 40%, whereas the broader indices are up around 40%.

The pipeline has been reduced by about two-thirds and the headcount has also been reduced by about two-thirds. Meanwhile, if you walked away with about $900,000 in cash, including about $300,000 in a cash bonus for 2012, A, I guess the question is, do you feel that's appropriate in light of what I've just described? And, B, I guess, put simply, what are you doing on a daily basis in 2013 to sort of earn your $450 per hour?

A little hard for me to respond to, Robert. I would say that the compensation for this Company, and myself, for that matter, is set in the context of the industry as a whole with the use of external advisors and consultants who are very knowledgeable in this area. I don't have anything to say about my own compensation, so I'm not going to go anything further on that.

The second thing is that we have a very -- we have a set of corporate goals. I get judged on the corporate goals, as does everyone else. The goals are related to the incentives that we put in front of people to achieve outcomes that we think are long-term very valuable for the Company, and we are proceeding in that manner. And I think that's very consistent with industry practices and I think very good governance in industry practices.

The third comment would be related to what are we doing and what do I do every day. I think I could just simply say that the efforts to bring a product to the market are long and they take a lot of time. There are a lot of twists and turns. We've seen this with many companies.

And my activities and the activities of the entire both the senior staff and all of the members of the Company are obviously directed at doing that in the best manner that we know how, with substantial oversight from our Board. That's what we do every day.

Okay. And final question. Along those lines, I guess, you guys just reported, by my count, I think 70th consecutive money-losing quarter for Geron, which may be some sort of a record for going concern.

Be that as it may, let me just sort of couch the question like this. I guess, perhaps, it's for you, Steve. Is it fair to say that the Company has no present -- or does the Company presently -- are you engaged in any Geron-sponsored ongoing clinical trials this calendar year, A?

And, B, completely separate question, when do you anticipate conducting a Phase III trial? And if I could sort of load the boat here, C, is it fair to say -- am I understanding correctly that, with the myelofibrosis trial, you are waiting to see how the Mayo Clinic trials plays out, which is not a Geron-sponsored trial, obviously, before you begin?

I think you said there is about a 6 to 9 month lag time before you even begin a Phase -- a he trial in that regard, in that indication. And will it just be a Phase II trial? So are we looking at about -- and think that trial ends March 2014, then we have about nine months of lag time and then you guys start a Phase II, nine months later. Am I correct?

Robert, let me try to take that question first. I think, to reiterate what Steve had said earlier in the call, and the way that we approach this, first of all, I think that the distinction between Geron-sponsored and non-Geron-sponsored trials is a little bit artificial. Not in a technical sense, but I think we believed and continue to believe that using -- in hematologic malignancies, using ISTs is the most efficient, quickest, and the best way to get the kind of basic information on safety, tolerability, efficacy, and dosing, in order to inform the design of a much larger study.

Whether that study will be a Phase II, a Phase II-III, a Phase III, we just really can't say right now. It depends on the magnitude of the response, any questions of tolerability and safety that come up, and so forth. But I do think that we are getting the kind of data that one absolutely wants to get, in order to make really good decisions when you go into a larger, more sophisticated and -- well, maybe not more sophisticated, but a larger trial.

And so we believe in this strategy. I think we are going to implement it. The intentions are to implement it in several other hematologic myeloid malignancies. And so I think the information that we get from these is extremely valuable, and Steve has already spoken to that.

Once we believe that we have enough information in order to actually reliably start the process of design of the next Geron-sponsored study, it normally takes anywhere from 6 to 9 months from the day that you know what you want to do to actually getting that implemented. It involves a lot of discussion with investigators, protocols, going through IRBs, all the rest. But that is irrelevant, whether it was an IST or whether it was not an IST that gave you that information. You still have that lag time.

So I think that we do not anticipate -- to answer your question very directly, we don't anticipate doing any Geron-sponsored studies this year. But I don't think that that is really the point. I think the real point is, we are getting important information and data that will inform the best possible design going forward and, hopefully, into very successful future studies.

Okay. And just the last follow-up, then, in that regard. Was it the Company's intention -- naturally, hindsight is 20/20, but was the Company's intention all along in the design of the MM and ET trials, not to pursue those further, but just to have those inform other Phase II, for example, trials in other hematological cancers?

Yes. Going right back to the conception of those trials, we had a number of hematologic malignancies that we wanted to pursue development of imetelstat in the -- at the time, there were concerns about the evidence to support the biologic rationale and there were concerns about tolerability. And so we did those studies to provide support for the biologic rationale and to provide evidence of tolerability in order to expand the program into the diseases where we thought that we could have a much clearer line of sight to market.

As we've explained to you, the data from the myeloma study has supported the hypothesis, but has done really not much more than that because it was never really designed to do so. The data from the essential thrombocythemia study actually exceeded our expectations and has forced us to reconsider whether, in fact, there is a development (inaudible) in essential thrombocythemia, which is an exercise that is currently ongoing. But fundamental premise of your question, I think is correct.

Okay. That's all I have.

Thank you.

Thank you very much. That completes our Q&A session. I'd like to turn the call over to Dr. Scarlett for closing remarks.

Thanks, everyone, for your time today and we look forward to providing further updates as our plans with imetelstat develop. Thanks. Bye.

Thank you. Thank you for your participation in today's conference. That concludes the presentation. And you may now disconnect. Have a good day.