Geron Corp (GERN) 2022 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. My name is Abby, and I will be your conference operator today.

At this time, I would like to welcome everyone to the Geron Corporation First Quarter 2022 Conference Call. Today's conference is being recorded. (Operator Instructions)

And at this time, I would like to turn the conference over to Aron Feingold, Vice President of Investor Relations and Corporate Communications. You may begin.

Good afternoon, everyone. Welcome to the Geron Corporation First Quarter 2022 Conference Call.

I am Aron Feingold, Geron's Vice President of Investor Relations and Corporate Communications. I'm joined today by the following members of Geron's management team: Dr. John Scarlett, Chairman and Chief Executive Officer; Olivia Bloom, Executive Vice President of Finance and Chief Financial Officer and Treasurer; Dr. Aleksandra Rizo, Executive Vice President and Chief Medical Officer; and Anil Kapur, Executive Vice President of Corporate Strategy and Chief Commercial Officer.

Before we begin, please note that during the course of this presentation and question-and-answer session, we will be making forward-looking statements regarding future events, performance, plans, expectations and other projections, including those relating to the therapeutic potential and potential regulatory approval of imetelstat, anticipated clinical and commercial events and related time lines, the sufficiency of Geron's financial resources and other statements that are not historical facts.

Actual events or results could differ materially. Therefore, I refer you to the discussion under the heading Risk Factors in Geron's quarterly report on Form 10-Q for the quarter ended March 31, 2022, which identifies important factors that could cause actual results to differ materially from those contained in the forward-looking statements. Geron undertakes no duty or obligation to update our forward-looking statements.

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

Thanks, Aron. Good afternoon, everyone. Thanks for joining us today.

This quarter, we continued to build on the momentum from our clinical execution throughout 2021. We believe we're well positioned to realize the transformative potential with imetelstat in hematologic malignancies. Most importantly, we're only 8 months away from the top line results from our IMerge Phase III trial in lower-risk MDS, which we expect in early January 2023. This is the first of 2 significant data readouts for imetelstat over the next 2 years. Let's speak about the other one in a few minutes.

In their lower-risk MDS patients, key opinion leaders and community hematologists underscore the significant unmet need for durable transfusion independence. If the durability and safety data from our Phase II study are confirmed in the Phase III trial, imetelstat could represent a significant treatment advance for these patients because we believe no other product has provided the rates of 24-week and 1-year transfusion independence seen in the IMerge Phase II study.

In addition, unlike currently approved therapies, imetelstat offers the potential to treat both RS-positive and RS-negative patients as well as to provide potential disease modification. We expect these characteristics to strongly differentiate imetelstat in the lower-risk MDS treatment landscape and to create a broad commercial opportunity.

We're also making steady progress in opening clinical sites for our IMpactMF Phase III refractory MF trial, which is expected to enable an interim analysis in 2024. This interim analysis will be the second significant data readout for imetelstat.

With the recent start of our IMproveMF Phase I combination study, our pipeline expansion program is picking up momentum. That pipeline expansion program, including the IMproveMF Phase I study in frontline MF, and the 2 investigator-led studies in AML enables us to study the potential of imetelstat as a combination therapy and in additional indications.

A key objective for this quarter was to raise additional capital to provide financial flexibility as well as to broaden our investor base. We're pleased that we achieved both goals with the closing of the $70 million net public offering on April 1. This public offering garnered keen interest from biotech specialist investors, including Vivo Capital, RA Capital, TCGX, EcoR1, New Enterprise Associates and HealthCor Management.

We believe that Geron represents a strong investment opportunity for these and other investors due to our compelling Phase II data, the nearness of our lower-risk MDS Phase III readout, the commercial opportunities of our potential indications and the strength of our internal capabilities and management team.

Our current financial resources plus the net proceeds from this financing, plus the additional funding in 2023 from potential warrant exercises are expected to provide the financial resources necessary to support our planned key milestones through the end of 2023.

Assuming positive top line results from the IMerge Phase III trial, these key milestones include submission of a U.S. New Drug Application or NDA in the first half of 2023, submission of a European marketing authorization application or MAA in the second half of 2023, and preparatory activities for a potential 2024 U.S. commercial launch of imetelstat in lower-risk MDS.

We also expect these current and projected financial resources will provide us the cash runway to consider various strategies to maximize the value of imetelstat for patients and shareholders. These could include partnering, additional debt, structured instruments, such as royalty monetization, or other strategic options.

Before I turn the call over to my colleagues, I'd like to highlight my very strong confidence in and appreciation for my remarkable Geron colleagues. It's the collective excellence in execution across the company as we approach significant milestones that will unlock value for patients and for shareholders.

With that, I'll turn the call over to our Chief Medical Officer, Aleksandra Rizo, for a clinical update. Alex?

Thanks, Chip, and good afternoon to everyone on the call.

As Chip mentioned, we're excited to be just 8 months away from the planned top line results of our Phase III lower-risk MDS trial. As such, our teams are focused on preparations for a high-quality data readout, which requires collaboration and execution across the clinical operations, data management and biostats teams as well as partnerships with our CRO, investigators and study sites. We remain confident that the readout will occur in early January 2023.

I'd like to remind everyone that the IMerge Phase III trial is designed to confirm the Phase II results since the trials use the same patient population, dosing regimen of imetelstat, primary and secondary endpoints and geographies for clinical sites with many of the same investigators.

We believe that if the Phase III trial confirms similar depth, breadth, durability of transfusion independence and safety, imetelstat could meet significant needs for all patients with lower-risk MDS, who have failed or are refractory to ESA treatment. Moreover, imetelstat would address the approximately 75% of lower-risk MDS patients who are RS negative and are underserved by current treatment options.

Furthermore, the unique telomerase inhibition mechanism provides disease-modifying potential, which we believe differentiates imetelstat from other currently approved or investigational treatments for lower risk MDS.

In addition to preparing for top line results, our regulatory team has initiated NDA submission preparation. As Chip mentioned, assuming the result of IMerge Phase III support regulatory submissions, we plan to submit an NDA in the U.S. in the first half of 2022 and an MAA in Europe in the second half of 2023.

With regards to our Phase III refractory MF clinical trial, we continue to make progress with site activation and remain confident we'll open the remaining selected sites in 2022. We believe this progress will enable completion of enrollment and a potential interim analysis in 2024.

As a reminder, IMpactMF is the only Phase III trial in MF using overall survival as the primary endpoint. We believe that if the improvements in OS observed in our Phase II trial can be confirmed in IMpactMF, imetelstat would represent a potentially transformative treatment option for MF patients who no longer respond to JAK inhibitors given their dismal prognosis and lack of treatment options.

Of note, a recent publication in Cancer Journal co-authored by Dr. Mascarenhas and Dr. Verstovsek, both principal investigators in our Phase III IMpactMF trial, describes the clinical dilemma for treatment of JAK inhibitor failures. This paper reinforces the poor outcomes in the many MF patients who are refractory to JAK inhibitors and highlights the unmet need for survival improvement in this patient population.

Moving on to the earlier-stage programs in our pipeline. This month, we opened our first clinical site in the IMproveMF study. This Phase I study is designed to evaluate the safety and clinical activity of imetelstat in combination with ruxolitinib in patients with frontline MF. In this study, we want to explore the potential for disease modification with imetelstat treatment in the earlier frontline MF disease setting.

As a reminder, IMproveMF is a single-arm open-label study in patients with frontline MF consisting of 2 parts. Part 1 will enroll up to 20 patients, with the objective to identify a safe dose for the combination of imetelstat and ruxolitinib while efficacy data are being collected.

In Part 2, we also plan to enroll approximately 20 patients with the objective to confirm the dose identified in Part 1 and collect further safety and efficacy data. In both parts, patients who receive ruxolitinib followed by imetelstat, a dosing schedule that shows synergistic and additive effect of the 2 drugs in preclinical experiments.

For our investigator-led trials in higher-risk MDS and acute myeloid leukemia or AML, we continue to expect to start in the second half of 2022. A recent nonclinical publication in the Journal of Clinical Medicine, although in pediatric AML, further supports the development of imetelstat in these diseases.

Lastly, and in anticipation of likely questions, I want to comment that we have limited clinical trial activity in Ukraine and Russia across all of our ongoing trials. At the moment, we believe that the conflict will have no significant impact on our trials or on our timelines, including top line results for IMerge Phase III and enrollment and interim analysis for IMpactMF.

I would now like to turn the call over to our Chief Financial Officer, Olivia Bloom, for a financial update. Olivia?

Thanks, Alex, and thanks to everyone on the call for joining us today.

Please refer to the press release we issued this afternoon, which is available on our website for detailed financial results.

As expected and in line with our financial guidance, overall in our first quarter 2022 financials, there was an increase in operating expenses compared to the same period in 2021, which was primarily driven by higher development expenses. The increase in R&D expenses for the first quarter of 2022 compared to the same period in 2021 primarily reflects higher personnel-related costs for additional headcount.

The decrease in general and administrative expenses for the first quarter of 2022 compared to the same period in 2021 primarily reflects the net results of reduced costs related to modernizing the internal infrastructure to support commercial launch and lower legal fees, partially offset by higher personnel-related expenses for additional headcount.

Turning to our financial resources. As of March 31, 2022, we had approximately $177.8 million in cash and marketable securities. On April 1, we closed the underwritten public offering of common stock and warrants that Chip mentioned earlier on the call. The estimated net proceeds are approximately $70 million after deducting the underwriting discount and other estimated operating expenses payable by us.

We continue to expect non-GAAP total operating expenses up to $150 million for the full year of 2022.

The fiscal year 2022 financial guidance reflects costs to support clinical execution in IMerge Phase III, IMpactMF Phase III and new clinical studies associated with the imetelstat pipeline expansion as well as readiness activities for top line results due to regulatory filings and pre-commercial preparation.

With the additional capital from the recent financing and our existing financial resources, we expect to have approximately $130 million in cash and marketable securities at the time of the lower-risk MDS top line results in early 2023. We also project up to $125 million in additional funding in 2023 from potential exercises of currently outstanding warrants. When added to the projected $130 million on the balance sheet at the beginning of 2023, we expect the projected financial resources to be sufficient for planned milestones through the end of 2023.

These milestones include regulatory filings in lower-risk MDS in the U.S. and in Europe as well as preparatory equity for potential U.S. commercial launch of imetelstat in lower-risk MDS in the first half of 2024.

With that, I will now hand the call back to Chip for closing remarks. Chip?

Thanks, Olivia. As you've heard throughout this call, 2022 marks an important year of execution for Geron to deliver on key milestones, which we believe will bring significant value to patients and shareholders. So I'd like to end this call by reiterating our excitement for where we stand as a company today.

We believe we have 2 well-designed Phase III trials with registrational intent that are supported by compelling Phase II results in commercially attractive markets and with data readouts expected to create significant value over the next 2 years. We have a pipeline expansion program representing opportunities for additional imetelstat indications and combination regimens. We believe we're financially well positioned to execute on key clinical and regulatory milestones with projected cash runway through the end of 2023.

We expect that runway will provide for strategic optionality to maximize shareholder value, following top line results from our lower-risk MDS Phase III trial expected in early January 2023. We're building the capabilities to establish ourselves as a commercial company and to prepare for a potential U.S. launch as early as the first half of 2024.

And we have a highly experienced management team as well as a passionate focused employee base that is deeply committed to bring imetelstat to patients and create value for our shareholders.

I hope you share in our enthusiasm for the future of Geron and understand our deep belief in our ability to help patients suffering from hematologic malignancies.

Thank you for listening today, and operator, please open the call to questions.

(Operator Instructions) And we will take our first question from Gil Blum with Needham & Company.

So maybe a quick one on for the MF study, how do you think the positioning of imetelstat might look like in additional drugs that may be approved by that time in the second-line setting, for example, momelotinib?

I think Anil is going to take that question.

Thank you, Gil, for the question. So Gil, I think importantly, the space continues to evolve with multiple mechanisms under investigation. We expect patients to be treated with combination therapies, therapies that address symptomatic patients and also addressing the needs of similarly cytopenic patients. Momelotinib approval is in a transfusion-dependent population, which represents a fragment of the eligible patients for our study.

Our study, as you know, Gil, is the largest effort ever in myelofibrosis, looking at a JAKi refractory patient population, and it remains the only study with overall survival as a primary endpoint. In all our market research, discussions with physicians, KOLs, this is expected to be a highly compelling study. And if the results are proven, we would expect to become part of the standard of care for myelofibrosis.

That makes a lot of sense. (inaudible) standpoint is definitely differentiated.

Maybe a related question. So we're going to be looking at a frontline combination study with RUX, and I noticed that the primary endpoint is TSS and SVR35, which is kind of the usual endpoint. But any thoughts on the other assessments like response rates or something a little more outside of the SVR realm?

Yes. Alex will take that, Gil.

Yes. Thanks, Gil. So again, let's repeat that this is a Phase I dose-finding study. We want to first confirm that we can combine the 2 drugs, identify a safe dose. And then in the second part of the study, we want to confirm this dose.

So while we're doing this, we will be collecting every efficacy data that is out there that's known for myelofibrosis in addition to SVR and TSS. We will be collecting all the biomarker data for which we distinguish from other drugs in development. So that is, one, we will be collecting fibrosis data -- or improvement in fibrosis data as well.

And think this will be -- and as we will be conducting narrow assessments for, right, potential CRs and PRs as well. So it will be a comprehensive data collection that we believe will inform us on the next steps.

We'll take our next question from Stephen Willey with Stifel.

Maybe just a follow-up on the last question with respect to IMproveMF. I know the intention here is to evaluate the potential for disease modification in frontline patients, but just curious what you think the efficacy bar and tolerance for incremental toxicities is here. Just given the treatment of frontline patients with RUX is currently very focused on symptomatic improvement. And then I just have a follow-up.

Yes.

Go ahead, Alex.

I can take that one, Steve. So a couple of points, I believe, here are also important to make. So thresholds in terms of drug safety or toxicity are very important. Our drugs do have overlapping thrombocytopenia, and for that reason, we are starting very carefully with the dosing of the 2 drugs. We're stabilizing RUX first, and then we're adding imetelstat. And I think -- we believe that with this approach, we will find the best tolerated dose for the combination.

In terms of efficacy, the bars are set in frontline, and they're being set in second line as well. But we believe that, again, we will see -- or we hope to see, right, other improvements, in addition to the SVR and the TSS. And I think the disease-modifying potential that we hope for in terms of reduction in allele burden, improvement in fibrosis is something that will take our drug, right, in a different position than the other drugs in development.

Okay. And then just on the disease modification front, are you going to be requiring patients to undergo marrow assessment and fibrotic assessments? And I guess with respect to fibrosis, I know it's kind of a bit of a subjective endpoint. Would you also be looking at allele frequencies in these patients? And if so, can you remind me does -- is the rate of secondary mutations in these frontline patients, are those observed at the same kinetics that is seen in the JAK refractory patients?

So a couple -- I think you had a couple of very good points. Let me address them one by one.

So we do -- or we will be collecting marrows to assess fibrosis as well as allele frequencies for various mutations. The fibrosis assessment that we have begun on our study so far, and we plan to continue assessing it the same way, is done by an independent review committee. So while it is, some people say, subjective, I think we are doing a fairly good job in having been done by an IRC, which kind of makes us confident about the fibrosis improvement -- or the fibrosis data that we will be collecting and assessing.

So yes, to fibrosis, right? So we are doing this in an independent review manner, and we will be collecting samples to assess allele frequency. And in addition to that, we will be coordinating these 2 with disease outcome.

Now your last question, whether these -- whether these mutations occur in the same frequency in frontline and second-line setting, I think we'll have to discuss which ones because as the patients progress, I would guess -- I would say in their disease, they tend to have the high-risk molecular characteristics. But nevertheless, a lot of these mutations are linked to the disease itself, right? So just -- and like the driver mutation itself.

So I don't know exactly about the frequency of each of them, but I would say that at least the combination of all of them, and for example, the HMRs, do increase over time as the patients progress.

And we will take our next question from Joel Beatty with Baird.

This is Benjamin on for Joel. Just a few questions for us. Could you maybe describe the level of physician engagement in enrolling patients and IMproveMF? And maybe you can provide a little bit of color on the number of sites coming online.

I'll take that one as well. So I think that what we've guided so far is that we've opened more than 50% of our sites. And we do remain confident that we will open the rest of the sites by the -- selected sites by the end of the year. I don't think we have really put a number there, but this is what we are expecting to do.

The space is competitive, as I'm sure you know. However, taken the fact that we have an overall survival as the primary endpoint, which has been multiple times repeated that is very -- it is an endpoint that is needed in this space and our PIs really remain enthusiastic about it, we do see enrollment moving in the right direction.

Great. And then just one more, on the lower risk MDS, are there any early commercial prep underway for the readout anticipated in early January?

Joel, (sic) [Benjamin] this is Anil. I'll take that question.

So yes, there is extensive effort underway for us to characterize the market, understand the physician base, really see where all the treatments are coming from and also extensive efforts, which you will start to see over the next 12 months as we bring imetelstat data to the market and start to educate physicians around the unique mechanism of action from our perspective.

All of these events are stage-gated. They are all tailored post low-risk MDS. And I want, as a reminder, one more time that vast majority of our commercial hiring is gated post-TLR as well. So I'll just stop here to see if I answered your question.

Yes, all set.

(Operator Instructions) And we will take our next question from Justin Walsh with B. Riley Securities.

With respect to IMproveMF, do you anticipate frontline MF patients having any hesitancy about starting with the frontline combo given that RUX alone can provide benefit in patients for some time before they inevitably relapse?

Thanks for that question. I don't see why. I think that just in addition to the benefits that they can have with RUX, they might have additional benefits from treatment with imetelstat. So we have not heard that concern, nor we have any hesitancy about that. Anil?

Go ahead, Anil.

So just to add on to what Alex said, there are multiple trials underway in myelofibrosis, upwards of 10 Phase III trials, 6 of them in frontline with combination strategies with JAKis. So our expectation is what we would hope to bring to the table is the potential for disease modification with a novel non- JAKi mechanism over time as the improved MF data starts to establish itself.

Got it. And maybe building on that, as my last question, do you have any concern that there will be challenges in enrolling patients since you'll be competing with all of those other trials that you just mentioned?

I'm not sure for which study you...

IMproveMF.

IMproveMF the for the frontline setting?

IMproveMF, but I guess we could -- that's true for IMpactMF as well.

Right. I don't think so. I don't think so. I mean, again, the drug offers really different benefits and distinct value, right, for the patients. The potential for overall survival in the refractory space, it's really received with enthusiasm.

And bringing the disease modification to the frontline setting, where patients should respond even better, right, because these are less sick patients. I think it's still uniquely attractive to both PI and investigators.

So with that, at least, I don't expect any problems with enrollment. But still this is competitive nevertheless, but we do stand out for a couple of good reasons, I believe.

And there are no further questions at this time. I would like to turn the call back to Aron Feingold for closing remarks.

Thanks so much to everyone for joining us today and for your questions. We look forward to keeping you posted on our progress. Be well.

And ladies and gentlemen, this concludes today's conference call. We thank you for your participation, and you may now disconnect.