Geron's CEO Presents at 25th Annual Piper Jaffray Healthcare Conference (Transcript)

Dec. 4.13 | About: Geron Corporation (GERN)

Geron Corporation (NASDAQ:GERN)

25th Annual Piper Jaffray Healthcare Conference Call

December 04, 2013 12:30 PM ET

Executives

John Scarlett - President and CEO

Analysts

Charles Duncan - Piper Jaffray

Charles Duncan - Piper Jaffray

Good afternoon. Welcome to the afternoon the second day of the 25th Annual Piper Jaffray Healthcare Conference. I am Charles Duncan, I am a Senior Analyst and Managing Director for the firm I cover biotech stocks. And a stock that I have covered for a several years had very interesting year, actually I could say that above many of the stocks that I have for different reasons, this one has had a really interesting year since the second half of the year and that is Geron Pharmaceuticals. Geron is a company with a potentially very proudly applicable platform, it’s been around for a while, it has undergone a major transition in terms of its focus and management team.

And here with me is Dr. John Scarlett, Chip Scarlett who is going to tell us a little bit about his perspective on why he joined Geron and their recent news flow and what could be in the future in the near term. Chip, why don’t you tell us a little bit about yourself or your forward looking statements?

John Scarlett

I’m going to read the forward looking statement and that will keep me out of trouble with my very tough general counsel. Now you know who really runs the business. Except for statements of historical fact this presentation and question-and-answer session contain forward looking statements may pursue to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 including without limitations statements regarding timelines for data reporting and clinical trial initiation, imetelstat’s clinical activity in the bone marrow and potential to the disease these modifying.

Scope of patent protections, prospects and plans for imetelstat, Geron’s expectation for the timing of the record day, and the announcement of the record date for the serious bio-therapeutic series A distribution and financial and operational expectations, projections, and requirements of these statements involve risk 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 primarily under the headings Risk Factors including the quarterly report on Form 10-Q for the quarter ended September 30, 2013. Undue reliance should not be placed on Geron's forward-looking statements, and Geron disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances.

Well, as they say wouldn't be prudent. Very well done. So I came to Geron almost exactly two years ago. I have unfortunately failed the retirement on several occasions and once again proves that I was a miserable failure of retirement. I liked Geron for couple of reasons, I thought that the underlying technologies were really science driven and really important, potentially in the world of biotechnology and therapeutic applications.

The company had a fairly hefty balance sheet at the time and as the new CEO coming into a company it's really nice to not have to about raise money immediately which has been the case. And I felt that there was a desire on the part of the Board to rationalize the business and make sure that we were really focused in a direction that was going to get real traction in the world of drug development.

As a consequence, we made some fairly quick decisions, one of them which was controversial, but nevertheless I think has worked out fine, was to exit the stem cell business. And that was the part that I read about steroids have taken our stem cell assets. The company has been known on Wall Street and outside of Wall Street as a stem cell company. And so that has ended up with us having what I think is a fairly significant change in our ownership over the past couple of years, we're now very much an oncology drug development company.

We also looked at a couple of our different oncology assets decided on the basis of clinical trial results to really focus on imetelstat. Ironically and interestingly imetelstat was really the return to the future or back to the future as the movie called it. The company with IPOed back in I believe it was 1996 on the basis to tumor biology and at the time that was very cutting edge technology, it actually remains that way Liz Blackburn and Carol Greider had not yet received the Nobel Prize for their observations at telomeres are really important in malignancy and that telomeres was obviously an important target that was to come. But nevertheless the company started being interested and looked along with many people in the pharma business for a really good telomeres inhibitor, small molecules staled miserably at that many companies staled on the small molecule inhibitors. I think we now understand some of the stoichiometry and the conformational changes that are required in making small molecule inhibitors and probably going to still be very difficult even with the crystal structure of the enzyme now known.

But instead the company persevered and developed an oligo at the time of very un-favored approach I might add developed in oligo not as an anti sense but actually as a competitive inhibitors of the enzyme which has at it’s heart an RNA template which provides the complementary RNA to add on the nucleotide repeats at the ends of chromosomes that are called telomeres.

So the observation was made that patients with malignancies and including hematologic malignancies clearly have upregulated telomeres particularly in progenitor cells and that these might be excellent targets for such an inhibitor. The company went through a variety of different transformations looking at and different targets including some solid tumors and I won’t take you through all that, we are not really here in 25 minutes to talk about that, but we set that aside certainly for the moment and we are really focus on hematologic malignancies.

The background was that we -- the first question, well if the drug gets to the bone marrow which it does, if the drug gets to the spleen liver which it does, would this be potentially useful in diseases such as myelofibrosis which are diseases of progenitor cell neoplasms, malignant progenitor cell clones in the bone marrow [and so as he asks] one of the concerns that we had was that the on target toxicity of imetelstat is clearly myelosuppression. And so patient with patients with myelofibrosis are known to have some relative degree of loss of bone marrow reserve especially if they had advance disease, where their bone marrow is replaced by fibrotic material.

And so we elected first before I ever got to the company to study a wide disease that is capable of transforming into myelofibrosis which is essential thrombocytopenia ET. The results there were quite stunning, not only that we have a very high degree of complete hematologic remissions, meaning the platelet counts came down for many million and in some cases to normal, but even more impressive, we saw that the allelic burden of the JAK2 V617F mutation was reduced substantially in most patients in human could be measured.

Might we recall that these malignant progenitor cell clones often are associated with a variety of different mutations, there has been to-date no specific driver in MF or ET or PV for that matter. It was hoped that the V617F mutation of the JAK step pathway of the JAK2 would be such a driver mutation, it’s not, that's pretty clear. But all of the progeny, all of the cells that come from the underlying disease clearly carry that mutation. And therefore, if you measure granule sites in the periphery over the course of treatment and you see the numb percentage of cells that carry this mutation go down further and further, you assume, the rest of the academic world assumes, we didn’t make this up, that you are having a disease modifying effect, you are having affect on the underlying clone. That gave us the comfort that in a pretty good safety profile gave us the comfort to go into myelofibrosis.

And just to finish this beginning, so in the spring of last year, we took that early ET data that had not yet been presented at ASH last year, we took that data to Ayalew Tefferi at the Mayo Clinic, a very well known, investigator who had an amazing set of patients and who had a big appetite for looking for drugs that might have an effect on the underlying disease. We took that data to him and said what you think, you said I think this is exactly the kind of drug that I would like to study. We have a lot of confidence in him as a clinician. We felt like we needed to take it very slow it first because again as the potential for myelosuppression. And so we started the study. it was done as an ISP, but nevertheless we were obviously in very close communication with Dr. Tefferi throughout the course of the study and continue to be.

The results were first made known, when the abstracts published a couple of months ago. But weeks, yes, that’s right I guess …

Charles Duncan - Piper Jaffray

Been a long time.

John Scarlett

It seems like…

Charles Duncan - Piper Jaffray

You’ve been having this…

John Scarlett

Yeah. It seems like I have been having this conversation for a long time I guess. The results were published not too long ago. The abstract will be presented by Dr. Tefferi in a podium presentation on Monday late afternoon. I think it's 4.45 something like that at ASH in New Orleans. I encourage everyone to go and listen to it. And we'll probably have some comments hopefully in the investor event shortly thereafter.

So at the end of the day, we have not commented very much about the specifics of the abstract, we're still under in a embargo from ASH in doing so. So I'm afraid, probably you have to come to ASH or look into our webcast in order to hear our take on it. But I'm happy to answer any other questions that I can. Hopefully that's a good background for what we hear.

Question-and-Answer Session

Charles Duncan - Piper Jaffray

That's a great background Chip and I appreciate you sharing with us that kind of evolution of the story. You answered many of the questions that I had. But one of the questions that I had was, why you chose Dr. Tefferi to work with? And really what it was that you hope to get out that study? Was it signal seeking or was it meant to inform call it a registrational task?

John Scarlett

So, I think that our first major decision was whether to do this as a single site or a multi site study. Regardless of investigator. And we chose a single site study and the reason we chose that was again the concerns around the need to seal our way into the treatment of this disease with a drug that was obviously very potent and have the potential in a patient with a compromised marrow for causing significant depression. So one of our goals was to feel our way into that and to not have five investigators enrolling patients all at the same time; and we knew that there would probably need to be some adjustments and so on. So that was point one.

Point two was we wanted to go to an investigator who clearly not only understood the disease but understood all of the nuances of the disease. And I think Ayalew Tefferi clearly meets that criterion. He was the first author on both of the recent -- the original 2006 and then a more recent 2013 paper on the IWG criteria for the response assessment in the disease. He is clearly one of the members of the intelligentsia of this world of myelofibrosis and MPNs, and for that matter AML and MDS.

The third was we had to go to somebody who had a big patient population. We knew that if you are going to only have one investigator, obviously you can’t meet some reasons that are put on the patient (inaudible) it had to be more than that and so the Mayo Clinic at Rochester clearly qualified for that.

Beyond that I think that we also look for someone who was hungry for the opportunity to consider scientifically where a signal seeking study might go. I mean we did not know whether we would have any effect at all in this disease. And so you need to be someone with a great laboratory capability and the ability to judge the value of any signals that we did see.

We had relatively little expectations. We have lot of other programs ongoing at the time that was one other reasons we did it as an ISP. So we had relatively few direct expectations. We wanted to see what would happen and we wanted to do it in a responsible way. So that was pretty much the background.

Charles Duncan - Piper Jaffray

So it sounds like it was really driven by some consideration as to being an unknown paradigm and potential toxicities….

John Scarlett

Right.

Charles Duncan - Piper Jaffray

And things like that. That said, you said that you had been very actively engaged with Dr. Tefferi over time. Were you engaged in patient selection or did he have absolute control?

John Scarlett

So, we worked through the protocol with him, which obviously has a great deal to do with inclusion and exclusion criteria and so forth. But basically it’s a pretty open protocol; patients are pretty much all comers by the way that we think of them traditionally. Patients did not have to had experience, prior experience with JAK2 inhibitors, they could have been experienced with JAK2 inhibitors, they could have been experienced with Pomalidomide, he had been a Pomalidomide investigator and so we had some patients with (inaudible)

Similarly, patients did not have to have been treated previously with, although some have been treated with hydroxyurea and other drugs. So there were -- it was pretty open minded. The main criteria were that they had to be intermediate. By DIPSS 2, they had to be intermediate-2 and high risk patients, which is pretty standard in the business. So we had nothing to say about individual patients. We exerted no control over that at all.

He took patients; some were de novo patients, some were older patients of his.

Charles Duncan - Piper Jaffray

Okay, but they were all symptomatic at all the…

John Scarlett

They all had intermediate-2 or high risk disease. Some might not have had a spleen. Some actually had splenectomies, not every patient was intermediate-2 or high-risk disease has splenomegaly and not every patient has symptoms. So it was -- that was the funnel with intermediate-2 and high-risk, unlike many of the studies with JAK inhibitors where of course you are expecting to see a spleen response, I think most of those studies, if not all, have required the patients have spleens and they that have splenomegaly, we didn’t require that for the study.

Charles Duncan - Piper Jaffray

Okay. And the dosing regimen…

John Scarlett

So, the regimen…

Charles Duncan - Piper Jaffray

The different one?

John Scarlett

Yeah. So the original regimen, the so called cohort A was dictated by our experience in ET where we had given the drug 9.4 milligrams per kilo every week, until the patients platelet count had come to normal and then started lengthening out the dosing interval. We picked Q3 weekly intervals from 9.4 milligrams per kilo, given every three weeks for the initial dosing. And that was out of the surface of caution. Again concerns about myelosuppression, make sure if it’s not going to crater of the first couple of patients that we did. We also allowed very clearly dose reductions, the first dose reduction will be down to 7.5 milligrams per kilo, a second dose reduction all the way down to 6, I am not sure that anybody is there but that would be allowed.

Then after the first 11 patients and they were just sequentially enrolled, kind of who rolled through his clinic and his colleague’s clinics, then the next 11 patients were treated with every week 9.4 milligrams per kilo weekly for four weeks, then going to a Q3 week interval. Again dose reductions and dose holds were certainly permissible.

Charles Duncan - Piper Jaffray

What do you think is better?

John Scarlett

Well, I think that the data that will come out of ASH will give a little bit more clarity around that. And I'm not going to try to say too much about that. But I think that we have a pretty a reasonable feeling for dosing now and I think I'll have to just leave the rest for ASH.

Charles Duncan - Piper Jaffray

Okay. And then in terms of the administration and shortcomings, you mentioned that this is an (Inaudible). So it has to be injected. And it's a potent drug. What do you see as some of the shortcomings with the drug? Did you do anything to improve it or do you think it's going to be sufficiently active to serve the role in myelofibrosis?

John Scarlett

Well, I think that if you just read the abstract on its face regardless of all the passing that's gone on, if you read abstract on face, it's done things that no other drug has been able to do. So, I think it's -- you see the actual abstract and just read it.

Charles Duncan - Piper Jaffray

Yeah.

John Scarlett

My feeling is that, it is a different paradigm than the JAK inhibitors. All the JAK inhibitors today are orally available drugs; they are given once or twice a day. In general, patients are given a prescription. They come back; they get their counts checked initially. And then if they are reasonably stable and they go on and they come back at whatever a physician feels is appropriate. This is much more of a chemotherapeutical like paradigm. It's not chemotherapy; it's far more targeted than that. But it's an infusion chair. You come in, you sit in an infusion chair, you get your counts checked. But people get the counts checked the day before. You look at the counts, you decide whether or not the patient should have a reduction in the dose, you decide whether the dose needs to be held or whether it should go forward.

There is clearly going to be individual personalization of this on the basis of individual patient response.

Charles Duncan - Piper Jaffray

Dosing

John Scarlett

On a dosing basis, I don’t have any doubt that this -- much like is the case with other infusion chair settings. So it’s really quite different. Another thing that I might clarify is that a lot of people have asked us, well, don’t I understand how can you have these responses if in fact you are causing myelosuppression? Well obviously, the myelosuppression can only be a periodic myelosuppression associated with dosing. You have to have recovery of the counts or you wouldn’t be doing anything that was really terribly helpful. So, the expectation is that while you may see and not every patient by the way gets myelosuppressed, but while you may see some degree of effect on the peripheral count, it’s really in the trough periods when the drug effect is over that you are really judging responses that in the course when we look at bone marrows et cetera.

Unidentified Analyst

(Inaudible)

John Scarlett

Well, I think you have to realize that this is an IST. And at the end of the day I Ayalew Tefferi wrote that abstract and had a definitive decision making capability as to what he thought were the important things to emphasize and I would recommend that anyone who read the abstract again with that in mind, these were the things he emphasized the things that he thought were important in the field. And he is not a he is a very thoughtful person. So, I would just say that. We didn’t write it and we didn’t have control over it. For that reason, one of the things that we hope to be able to do at ASH, at an investor presentation and analyst presentation that evening after, we will send a press release out about that, but at that evening after this presentation, we hope to be able to make some further commentary that will clarify some of these questions as to individual patient responses and so forth. But that was -- those were -- that’s what he thought was important.

Charles Duncan - Piper Jaffray

So it sounds like there might be more data presented, more full some data, and what he focused on because an abstract is there; I don’t know if you’ve ever written on it, but it's hard, you only have a certain amount of space. Sounds like key focused on what was important to him.

John Scarlett

Well, he thought his academic colleagues wanted to hear him talk about.

Charles Duncan - Piper Jaffray

I see.

John Scarlett

I think that’s really the way that I would put it. I mean he is a big time academic, ASH is and academic meeting. Investigators get up not just speak to investors, they get up to speak to other academic hematologists. I know that’s strange thought but it’s true. And so those were his thoughts. And I feel fine about that. Look, he has done a wonderful job. He is a very, very thoughtful man and he’s treated a lot of the patients quickly.

Charles Duncan - Piper Jaffray

So you feel good about this study being a signal seeking study?

John Scarlett

Yes. Feel very good about it being a signal seeking study. I think we have been clear publically that whatever we do, and I will get to that in a second, I think there is no question that we need to follow this with a multi-center study.

Charles Duncan - Piper Jaffray

Yeah.

John Scarlett

Everybody knows that there is always the potential for single center effects. I won’t invoke the name of the other major academic institution that studies diseases like this but it’s often called that’s noted that you can have, in these large academic centers, a slightly different thing. I don’t know of any reasons to believe that will be the case by the way, I’m not trying to forewarn anybody about anything.

It’s just -- of course, it’s the next thing to do as a drug developer. So you start off -- and if I might be permitted just a moment of nostalgia, I’ve been doing this for over 30 years, and this was the way we used to always do it. When I got to starting the business 30 years ago, you always did a signal seeking study with a single investigator. You really learned an enormous amount in a very quick period of time and then you went to a Phase II or whatever your next study was going to be, went to your next study and you made that a multi-center study and with reasonably rigid criteria and so forth and so on.

I think that's the paradigm that is going to be followed here.

Unidentified Analyst

(Inaudible)

John Scarlett

I think that we hope to clarify patient responses; I’ll just leave it at that.

Unidentified Analyst

(Inaudible)

John Scarlett

Well, the patients are seeing at a minimum assuming they’re still being treated according to protocol. They are being seen in a minimum of once every three weeks and they get all of the assessments made at those three weeks as far as I know.

Charles Duncan - Piper Jaffray

Chip, unfortunately we’re out of time, Chip thank you very much for sharing your story with us. Look forward to seeing everyone at ASH or afterwards. And thanks for your interest.

John Scarlett

Thank you.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!