Geron Corporation Reports Third Quarter 2016 Financial Results and Recent Events
November 03 2016 - 4:05PM
Geron Corporation (Nasdaq:GERN) today reported financial results
for the three and nine months ended September 30, 2016 and recent
events.
For the third quarter of 2016, the company reported a net loss
of $3.6 million, or $(0.02) per share, compared to net income for
the third quarter of 2015 of $27.2 million, or $0.17 per share. Net
loss for the first nine months of 2016 was $21.1 million, or
$(0.13) per share, compared to net income for the first nine months
of 2015 of $8.5 million, or $0.05 per share. The company ended the
third quarter of 2016 with $129.8 million in cash and investments
and has not incurred any impairment charges on its marketable
securities portfolio.
Revenues for the three and nine months ended September 30, 2016
were $5.1 million and $6.1 million, respectively, compared to $35.4
million and $36.2 million for the comparable 2015 periods. Revenues
for the three and nine month periods ending September 30, 2016
included license fee revenue of $5.0 million in connection with an
upfront payment due under a license agreement signed in September
2016 with Janssen Pharmaceuticals, Inc. for certain rights to
specialized oligonucleotide backbone chemistry and novel amidates.
Revenues for the three and nine month periods ending September 30,
2015 included the full recognition of the $35.0 million upfront
payment from Janssen Biotech, Inc. (Janssen) as collaboration
revenue upon the company’s transfer of the imetelstat license
rights and completion of technology transfer-related activities
outlined under the imetelstat collaboration agreement with Janssen.
The upfront cash payment was received in December 2014 and recorded
as deferred revenue at that time.
Total operating expenses for the three and nine months ended
September 30, 2016 were $9.0 million and $27.9 million,
respectively, compared to $8.3 million and $28.1 million for the
comparable 2015 periods. Research and development expenses for the
three and nine months ended September 30, 2016 were $4.3 million
and $13.9 million, respectively, compared to $4.1 million and $13.8
million for the comparable 2015 periods. General and administrative
expenses for the three and nine months ended September 30, 2016
were $4.7 million and $14.0 million, respectively, compared to $4.3
million and $12.9 million for the comparable 2015 periods.
Year-to-date operating expenses for 2015 also included
restructuring charges of $1.3 million in connection with the
company’s organizational resizing announced in March 2015.
The increase in research and development expenses for the three
and nine month periods ending September 30, 2016, compared to the
same periods in 2015, primarily reflected the net result of higher
costs for the company’s proportionate share of clinical development
expenses under the imetelstat collaboration with Janssen, partially
offset by reduced personnel-related costs resulting from the March
2015 organizational resizing and lower costs for the manufacturing
of imetelstat drug product. The company expects research and
development expenses to be higher in 2016 compared to 2015 as the
clinical development of imetelstat continues in collaboration with
Janssen. The increase in general and administrative expenses for
the three and nine month periods ending September 30, 2016,
compared to the same periods in 2015, primarily reflected higher
non-cash stock-based compensation expense and an increased
allocation of facilities and other overhead costs to general and
administrative activities.
Interest and other income for the three and nine months ended
September 30, 2016 was $322,000 and $871,000, respectively,
compared to $187,000 and $481,000 for the comparable 2015 periods.
The increase in interest and other income for the three and nine
month periods ending September 30, 2016, compared to the same
periods in 2015, primarily reflected higher yields on the company’s
marketable securities portfolio.
Recent Company Events
- In the third quarter of 2016, Janssen conducted planned
internal reviews of initial data from IMbarkTM and IMergeTM, the
ongoing clinical trials of imetelstat.
- IMbarkTM was designed to evaluate two dose
levels of imetelstat (either 4.7 mg/kg or 9.4 mg/kg administered
every three weeks) in approximately 200 patients (approximately 100
patients per dosing arm) with Intermediate-2 or High risk
myelofibrosis (MF) who have relapsed after or are refractory to
prior treatment with a JAK inhibitor. The co-primary efficacy
endpoints for the trial are spleen response rate and symptom
response rate at 24 weeks. Janssen’s review included data from 20
patients from each dosing arm who had been followed on the trial
for at least 12 weeks. In this review, no new safety signals were
identified and the safety profile was consistent with previous
imetelstat clinical trials in hematologic myeloid malignancies.
Activity in the 4.7 mg/kg dosing arm did not warrant further
investigation of that dose, and this arm has been closed to new
patient enrollment. In the 9.4 mg/kg dosing arm, even though at the
week 12 data assessment an insufficient number of patients met the
protocol defined interim criteria, this arm warranted further
investigation because encouraging trends in the efficacy data were
observed. New enrollment in the 9.4 mg/kg arm has been suspended
while the trial continues in order to obtain additional and more
mature data that includes a longer follow-up of these patients at
24 weeks. Enrolled patients in both arms are permitted to continue
to receive imetelstat. Janssen has submitted a protocol amendment
to health authorities that includes allowing eligible patients in
the 4.7 mg/kg dosing arm to increase their dose to 9.4 mg/kg per
investigator discretion.
- IMergeTM is a two-part clinical study in
patients with Low or Intermediate-1 risk myelodysplastic syndromes
(MDS). Part 1 is a Phase 2, open-label, single-arm design in
approximately 30 patients, which has been fully enrolled, and Part
2 is a Phase 3, randomized, double-blind, placebo-controlled design
in approximately 170 patients. Janssen’s review of data in a subset
of patients in Part 1 indicated that emerging safety and efficacy
in IMergeTM is consistent with data reported from the pilot study
conducted at Mayo Clinic in MDS patients. The primary efficacy
endpoint for the trial is 8-week transfusion independence. IMergeTM
continues unmodified at this time.
- Second internal data reviews of additional and more mature data
from both trials are planned by the end of the second quarter of
2017.
- Three abstracts describing non-clinical data on imetelstat were
accepted for presentation at the 58th American Society of
Hematology (ASH) Annual Meeting and Exposition to be held in San
Diego, California from December 3-6, 2016. The abstracts were
published on November 3, 2016 on the ASH website at
www.hematology.org.
Conference Call
At 4:30 p.m. EDT on November 3, 2016, Geron’s management will
host a conference call to discuss the company’s third quarter and
year-to-date results as well as recent company events.
Participants can access the conference call live via telephone
by dialing 877-303-9139 (U.S.); 760-536-5195 (international). The
passcode is 6488635. A live audio-only webcast is also available at
http://edge.media-server.com/m/p/ci36i65z. The audio webcast of the
conference call will be available for replay approximately one hour
following the live broadcast through December 3, 2016.
About Geron
Geron is a biopharmaceutical company supporting the clinical
stage development of a first-in-class telomerase inhibitor,
imetelstat, in hematologic myeloid malignancies. For more
information about Geron, visit www.geron.com.
Use of Forward-Looking Statements
Except for the historical information contained herein, this
press release contains forward-looking statements made pursuant to
the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that statements in this
press release regarding: (i) continued conduct by Janssen of
IMbarkTM or IMergeTM; (ii) Janssen obtaining additional or more
mature data from IMbarkTM or IMergeTM; (iii) that Janssen will
conduct any additional or further data reviews in IMbarkTM or
IMergeTM, and the timing of such data reviews; (iv) potential
outcomes of any data reviews conducted by Janssen; (v) the safety
and efficacy of imetelstat; (vi) submission of a protocol amendment
to health authorities; (vii) financial projections and
expectations; and (viii) other statements that are not historical
facts, constitute forward-looking statements. These 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, risks
and uncertainties related to: (i) whether imetelstat will succeed
in IMbarkTM and IMergeTM by overcoming all of the clinical safety
and efficacy, technical, scientific, manufacturing and regulatory
challenges; (ii) whether health authorities permit IMbarkTM or
IMergeTM to continue to proceed under the existing protocols, the
referenced protocol amendment or any other amendments
thereto; (iii) Janssen’s ability to collect additional and more
mature data from current clinical trials of imetelstat; (iv)
whether Janssen continues to conduct IMergeTM or IMbarkTM; (v)
Geron’s dependence on Janssen for the development, regulatory
approval, manufacture and commercialization of imetelstat,
including the risks that if Janssen were to breach or terminate the
collaboration agreement or otherwise fail to successfully develop
and commercialize imetelstat and in a timely manner, or at all,
Geron would not obtain the anticipated financial and other benefits
of the collaboration agreement with Janssen and the clinical
development or commercialization of imetelstat could be delayed or
terminated; (vi) whether imetelstat is safe and efficacious, and
whether any future efficacy or safety results may cause the
benefit/risk profile of imetelstat to become unacceptable; (vii)
the fact that Geron may not receive any milestone, royalty or other
payments from Janssen because Janssen may terminate the
collaboration agreement for any reason; (viii) the ability of Geron
and Janssen to protect and maintain intellectual property rights
for imetelstat; and (ix) the need for future capital. Additional
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
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, 2016. 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.
Financial table follows.
GERON CORPORATION |
CONDENSED STATEMENTS OF
OPERATIONS |
(UNAUDITED) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
(In thousands, except
share and per share data) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
|
— |
|
|
$ |
|
35,000 |
|
|
$ |
|
— |
|
|
$ |
|
35,000 |
|
License fees and royalties |
|
|
|
5,108 |
|
|
|
|
363 |
|
|
|
|
6,068 |
|
|
|
|
1,151 |
|
Total revenues |
|
|
|
5,108 |
|
|
|
|
35,363 |
|
|
|
|
6,068 |
|
|
|
|
36,151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
|
4,319 |
|
|
|
|
4,050 |
|
|
|
|
13,927 |
|
|
|
|
13,849 |
|
Restructuring charges |
|
|
|
— |
|
|
|
|
(41 |
) |
|
|
|
— |
|
|
|
|
1,306 |
|
General and administrative |
|
|
|
4,666 |
|
|
|
|
4,334 |
|
|
|
|
14,006 |
|
|
|
|
12,911 |
|
Total operating expenses |
|
|
|
8,985 |
|
|
|
|
8,343 |
|
|
|
|
27,933 |
|
|
|
|
28,066 |
|
(Loss) income from
operations |
|
|
|
(3,877 |
) |
|
|
|
27,020 |
|
|
|
|
(21,865 |
) |
|
|
|
8,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on
derivatives |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
16 |
|
Interest and other
income |
|
|
|
322 |
|
|
|
|
187 |
|
|
|
|
871 |
|
|
|
|
481 |
|
Interest and other
expense |
|
|
|
(21 |
) |
|
|
|
(22 |
) |
|
|
|
(61 |
) |
|
|
|
(68 |
) |
Net (loss) income |
|
$ |
|
(3,576 |
) |
|
$ |
|
27,185 |
|
|
$ |
|
(21,055 |
) |
|
$ |
|
8,514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
|
(0.02 |
) |
|
$ |
|
0.17 |
|
|
$ |
|
(0.13 |
) |
|
$ |
|
0.05 |
|
Diluted |
|
$ |
|
(0.02 |
) |
|
$ |
|
0.17 |
|
|
$ |
|
(0.13 |
) |
|
$ |
|
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing net (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
159,140,254 |
|
|
|
|
158,151,747 |
|
|
|
|
159,011,741 |
|
|
|
|
157,922,075 |
|
Diluted |
|
|
|
159,140,254 |
|
|
|
|
162,669,681 |
|
|
|
|
159,011,741 |
|
|
|
|
162,448,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
(In thousands) |
|
2016 |
|
|
2015 |
|
|
(Unaudited) |
|
|
(Note 1) |
Current assets: |
|
|
|
|
|
|
|
Cash, cash equivalents and
restricted cash |
|
$ |
6,151 |
|
|
$ |
21,515 |
Current marketable securities |
|
|
102,655 |
|
|
|
92,524 |
Other current assets |
|
|
6,250 |
|
|
|
1,853 |
Total current assets |
|
|
115,056 |
|
|
|
115,892 |
|
|
|
|
|
|
|
|
Noncurrent marketable
securities |
|
|
21,005 |
|
|
|
32,661 |
Property and equipment,
net |
|
|
170 |
|
|
|
207 |
|
|
$ |
136,231 |
|
|
$ |
148,760 |
|
|
|
|
|
|
|
|
Current
liabilities |
|
$ |
7,319 |
|
|
$ |
6,634 |
Stockholders’
equity |
|
|
128,912 |
|
|
|
142,126 |
|
|
$ |
136,231 |
|
|
$ |
148,760 |
|
|
|
|
|
|
|
|
Note 1: Derived from
audited financial statements included in the company’s annual
report on Form 10-K for the year ended December 31, 2015.
CONTACT:
Anna Krassowska, Ph.D.
Investor and Media Relations
650-473-7765
investor@geron.com
media@geron.com
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