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Geron Corporation (NASDAQ:GERN)

Q1 2008 Earnings Call

April 30, 2008 11:00 am ET

Executives

David Greenwood - EVP, CFO

Tom Okarma - CEO

Analysts

Glen Gechlik- Needham & Co.

Steve Brozak- WBB Securities

Graig Suvannavejh - UBS

Sanford Johnson - Retirement Planning Associates

Victoria Leasit - Private Investor

Al Pincus

Operator

Good day, ladies and gentlemen, and welcome to the first quarter 2008 Geron Earnings Call. (Operator Instructions).

I would now like to turn the presentation over to your host for today's call, Mr. David Greenwood, the Executive Vice President and Chief Financial Officer. Please proceed, sir.

David Greenwood

Good morning and welcome to the Geron earnings call. I am David Greenwood. With me is Tom Okarma, CEO. This is an earnings related call and we will begin with a summary of operating results for the first quarter. Our agenda then includes an overview of recent operating highlights at the Company and a summary of our operating plans for 2008. Following that presentation by Tom, we will have a general Q&A session.

Two informational items, in the event any forward-looking statements are made during this call, please understand those comments are made subject to the Safe Harbor provisions of the Securities and Litigation Reform Act of 1995. Any forward-looking statement involves uncertainty and we refer you to the risk factors detailed in filings with the SEC.

Secondly; as the operator mentioned, all participants are currently in listen-only mode. The lines will open for the Q&A and this call will be available for a webcast replay until the end of May. Please go to our website for more information.

As you can see on the condensed income statement attached to last night's announcement, revenues were up over the comparable three month period in 2007, principally due to a milestone payment. The milestone marks the FDA's publication of their risk assessment related to the health of food products from cloned animals. As you may recall, we formed a JV Nuco to hold the license rights for all non-human applications of our nuclear transfer or cloning intellectual property. This IP estate has been well tested over the past two or three years by others wanting into the field and has withstood every challenge.

For food producers; nuclear transfer is simply generation three breeding technology, more efficient than sorting animals on the farm or using artificial insemination to bring forward quality, quantity and disease resistance traits. Companies developing therapeutics can also use the platform to develop animal bioreactors that secrete therapeutic proteins in milk and to produce humanized antibodies for vaccine use. The potential's here to grow into an interesting commercial opportunity. And with that plug I will return to the numbers.

Our other cash inflows to the company during the quarter included $1.9 million of interest income. On the expense side, R&D expenses were essentially flat for the period, as were G&A expenses. We ended the quarter with $196 million cash on the balance sheet. Our gross cash burn in 2008 will be driven primarily by costs of clinical trials, which depends on the number of trials, five currently, three more in the works, number of sites, numbers of patients, drug and materials costs, CRO, regulatory costs, etcetera.

Our first quarter expense line minus an amount for non-cash expense related to equity compensation is probably a good indicator for the remainder of the year. Our net burn is obviously dependent on the recurring revenues, milestone achievement, new deals and so on. The company is obviously funded for the near term.

One final comment; we continue to have dislocation in the credit markets and many investment portfolios have been impacted. We believe at this point that our portfolio of marketable securities will not be impacted. We have conservative investment guidelines and we monitor the paper we buy.

At this point, I will turn it over to Tom Okarma.

Tom Okarma

Thank you, David. Good morning everyone. Thank you for dialing in this morning. So I will give a brief synopsis of the major press releases in the first quarter and a brief top down summary of the progress on the oncology side of the company today.

First; in early January we announced that we had granted to Sienna Cancer Diagnostics, an Australian diagnostic company, a worldwide exclusive license to detect telomerase activity for in vitro diagnostics. Their first application will be testing urine with their technology in a bladder cancer application. In consideration for the license we received an equity interest in the company and a royalty on sales. And just to be clear, the in vitro diagnostic rights, we convey to Sienna in this license is restricted to non-PCR and non-Elisa methods. Those technologies PCR and Elisa remain in the license to Roche.

The Sienna technology we like a lot. It uses a proprietary biosensor technology that appears to us to be quite reliable, so we are actually quite enthusiastic about a rekindling of interest in using telomerase activity assays as a predictor and a diagnostic screen in this case for bladder cancer, and other applications are in the works.

Secondly; the main public events in the first quarter really revolve around our intellectual property position and there are several important releases to highlight here. First; in early February we were issued our second broad US patent covering the production of islet cells and hepatocytes from human embryonic stem cells. This patent covers a very widely used method to produce endoderm, which is one of the three germ layers from which, among other cell types, liver cells and islets are then produced.

Geron scientists were the first to describe, publish and patent on this widely used method in the literature. So this newly issued patent in conjunction with one that was granted in '06 really solidifies broadly Geron's position on the embryonic stem cell side of the company with regard to producing hepatocytes and islets for both experimental and therapeutic purposes.

Thirdly; there were two announcements, one at the end of February and one in March, very important for both the field and particularly Geron, and these announcements have to do with the US Patent Office upholding the validity of now all three of the fundamental WARF patents covering human embryonic stem cells, both in terms of methods of derivation as well as composition of matter and methods to cultivate same. As you recall, Geron financed the work that led to the discovery of human embryonic stem cells and we have existing exclusive worldwide rights to this WARF patent estate for three broad cell types, all neural cells, cardiomyocytes and islets, as well as non-exclusive rights for a series of other therapeutic cell types.

Now the first announcement at the end of February was on the first of the three patents that is an intra partes dispute. The significance of the confirmation of validity here lies in the 82 page Action Closing Prosecution document issued by the US Patent Office which details the entire prosecution history of the re-exam, and the significance here is that the opinion of the patent office is extremely thorough and strong and fully rejected all of the arguments of the requesting party.

The reason this is important is because this decision could potentially be appealed, but the strategy of the patent office in publishing the 82 page action I think will really discourage the opposition from appealing that decision. In parallel, a few weeks later in March we enjoyed the identical outcome, namely upholding the validity of the remaining two of the three WARF patents under reexamination. And these cover the preparation and culturing of both primate and human ESCs.

That latter decision on the last two is an ex parte dispute which cannot be appealed. So the sum significance of those two actions is that, as we had predicted, this really reconfirms and upholds the validity and strengthens dramatically the WARF patent estate, which we are the exclusive benefactor of.

On a related notes in February the Wall Street Journal ranked Geron number five in the whole biotech sector on their so called Patent Scorecard. This is a four component instrument that evaluates patent portfolios in accordance to the scale, quality, impact and nearness to core science of the patent portfolio. So it reflects not only the numbers which I'll mention in a moment which are quite significant for Geron, but also the quality and breadth of the patent claims.

So on the embryonic stem cell side, Geron now owns or licenses 34 issued US patents, 60 issued foreign patents and more than 230 patent applications pending worldwide. On the telomerase side of the company, we own or license 109 issued US patents, over 170 issued foreign patents and more than 160 patent applications, also pending worldwide. So again, the intellectual property portfolio on both sides of our house is now being recognized externally in terms of its formidability and breadth.

And lastly I would call attention to my presentation at the BIO CEO meeting in February in which we for the first time unveiled our progress on the second generation telomerase vaccine platform, so called GRN Vac-2, which is based upon human embryonic stem cells. So the background here is that, as you know, we are currently enrolling in a Phase II Vac-1 trial in three soon to be four medical centers in the US, studying the optimized patient specific telomerase vaccine in AML patients at high risk for relapse.

Approximately four to five patients have gone through the full prime boost of vaccination. It's been extremely well tolerated. And soon we will receive all of the samples, which will be analyzed in a batched format for both immune response to the prime and the boost as well as residual AML cells done by a PCR assay. So that data will be forthcoming soon. In the process of developing that first generation, we've of course learned a lot about how to optimize the characteristics of priming and purifying and activating the patient's own dendritic cells to create an immune response that is still without precedent or equal in the entire field of cancer immunology.

Obviously the current Phase II in an AML setting where we can actually measure recurrence rates, remission kinetics and residual tumor is designed to complement the already published data in prostate cancer suggesting impact of the immune response that the vaccine generated. On the flip side of the coin, the downside of the Vac-1 approach is of course that this is patient specific. It is a complex protocol and it is of course subject to the individual patient vagaries that are real in the field of oncology, as you know.

So the ideal second generation would be one that was scalable, independent of patient variation and ready for off-the-shelf use. And in February we unveiled that so called Vac-2 platform. We have learned how to produce dendritic cells made from human embryonic stem cells. This is a highly proprietary technology based not only on Geron's own IP but on exclusive worldwide licenses from the Waldman Lab in Oxford, which is originally taught how to create dendritic cells from embryonic stem cells.

In short, we've learned now how to make these cells and they behave exactly the way the dendritic cells do that are isolated in the trials from individual patients. Moreover, they are of course infinitely scalable. They can be produced, charged with telomerase in exactly the same way en masse, alloquoted and then stored frozen for off-the-shelf use. And since they are made from a master cell bank, they do not suffer from patient variability. This is like a telomerase vaccine akin to a Gardasil approach, off-the-shelf, ready to go.

Additionally we have demonstrated that these cells made from ES cells are fully capable of processing and presenting telomerase antigen and generating telomerase restricted cytotoxic T-cells. If anything, they do it better than the patient specific DCs. And lastly and perhaps most importantly in terms of the clinical development path, we've shown that those functions of the SDCs are preserved after irradiation, and what that means is that we do not have to go through a year's long animal study to demonstrate that these cells do not form teratomas, the way we had to do with our OPC-1 program for spinal cord injury, because obviously the irradiation, while it doesn't kill the cells, it prevents the cells from dividing, thereby obviating as part of the manufacturing any possibility of untoward growth. So that means that the preclinical development path for the second generation vaccine is considerably shortened compared to other embryonic stem cell programs in the mix.

Now, turning to the highlights of the oncology program. I just summarized where we are on the Vac-1 program, so let me quickly turn to 163L. As you know the current status is that we are recruiting in four clinical trials in the United States from 15 US medical centers. By the third quarter of this year those numbers will change significantly to 23 US sites in six trials. So the brief update is as follows. We continue to dose escalate in all of the ongoing programs. We have not by any stretch of the imagination reached an MTD. We really like the data that are coming in now from all of these programs.

On the solid tumor Phase I, the objective of which is to understand how to optimally use this drug in a setting of solid tumors in patients who are extremely heavily pretreated. We continue to escalate and we are now looking at intermittent dosing schedules to optimize the tolerability of the drug in the setting of sometimes more than 12 preexisting courses of chemotherapy.

In the CLL program we've now escalated into the fifth dose cohort, that's 240 milligrams per meter square. And now, as you probably know, both the solid tumor and the CLL infusions are given over two hours rather than six, having demonstrated on the PK analysis a substantial improvement in the area under the curve when we go from a six to a two-hour infusion.

The lung combo study with Carbo/Taxol is going well. We are also looking at two weeks on, one week off schedules of our drug in combination with standard regimens of Carbo/Taxol. The myeloma study, which is really the main event for us this year, is going extremely well. We are actually ahead of schedule on the recruitment on that study. We have now entered the cohort that is dosing at 7.2 mg/kilogram and now that all of our assays are now fixed so we have now operating hair follicle assays, bone marrow assays and peripheral blood assays, the 7.2 mg/kilogram two hour infusion is one that we believe, subject to measuring actual blood levels, which is in progress, is a dose level that should hit the target. So we are ahead of schedule in terms of recruitment and the myeloma trial results will be a featured presentation at the ASH meeting at the end of this year, as will data on our ongoing Phase II for Vac-1.

Two new programs have had both protocols submitted and is under review. So the breast combination study, which is looking at 163L in combination with either paclitaxel or Avastin, should begin within a month, and the first site there will be University of Indiana. And then lastly, the multiple myeloma combination study, which is our drug in combination with Velcade, should begin in two or three months.

So in summary, the program has progressed from the two Phase Is, which are ongoing and continue to provide important tolerability, dosing frequency and dose PK relationships, to now what it will be four Phase I/II studies, non-small cell lung combination that's ongoing, breast combination that's about to start, multiple myeloma single agent ongoing, and multiple myeloma combination that will begin in two to three months. So the top line summary here is that 2008 really is the year that we expect to demonstrate biological activity of 163L.

So with that, I'll open the call to Q&A.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of [Glen Gechlik] with Needham & Co. Please proceed.

Glen Gechlik- Needham & Co.

[Technical Difficulty] any further follow-up on the stem cell program and when the IND might be expected.

Tom Okarma

Well fair question. But again, we will stick to our statements that we're not giving any guidance on the status of that IND, whether or not it's been filed and what's going on, basically to allow the process to run its uninhibited course.

Glen Gechlik- Needham & Co.

That's very, very fair. Second question, there'll be an ASCO presentation on solid tumors for Geron 163L?

Tom Okarma

Yes.

Glen Gechlik - Needham & Co.

I take it that won't have a maximum dose but will have information on how the patients are doing?

Tom Okarma

Right. I mean the main issue there is PK and tolerability. We, for obvious reasons, began the solid tumor Phase I in subjects who have been heavily pretreated and have failed in many cases over a dozen prior courses of chemotherapy. And the world of human telomerase biology in cancer is completely unexplored. We are really writing the book here. And so it was important that we fully understand how to use this drug as a single agent in patients who are in extremis with regard to prior chemotherapy. And that's really the lesson that we are learning in that trial.

So you're correct. We will have a presentation at ASCO on that solid tumor trial, and there'll be a second presentation on an ex vivo study that actually may lead to a clinical trial in Europe on T-cell prolymphocytic leukemia, which is an unusual opportunity in that this is a disease in which the telomeres of the malignant cells are extraordinarily short. And what the data will show is an extremely rapid lysis of the cells by our telomerase inhibitor in vitro. And that will probably lead to a clinical study in Europe perhaps next year.

Glen Gechlik - Needham & Co.

Thank you very much.

Operator

Your next question comes from the line of Steve Brozak with WBB Securities. Please proceed.

Steve Brozak- WBB Securities

Hey, gentlemen. Good morning. Let's go back in history here because you've given some color on the telomerase bladder assay system. As far as the platform goes, because you've got a long history, more than ten years of finding telomerase is a wonderful marker for cancer, would you, given the history, at the background and all the research that has been done on the bladder side, would you then look at using the platform because it's ubiquitous as far as detection of other cancers as far as your IP has been filed in the past. What are your thoughts on that?

Tom Okarma

Thank you, Steve, for that. So to answer your historical question in an historical context, the bulk of the capability existing in the world today to measure telomere length and telomerase activity as you know, emanated from Geron's original discoveries of how to do that. And we currently market a broad variety through sub-licensees of tests to measure telomerase activity in vitro. And these are the gold standards that everyone in the field uses today to do experiments on telomerase positive cells. Now that's the good side of the coin.

The downside of the coin is that all of those assays were optimized for use in experimental settings basically where you take a microtiter plate out of the incubator, harvest the cells and make the measurement. They are very sensitive. They all require amplifications of one kind or another of the signal because, as you know, telomerase is a very rare enzyme in cells with estimates as low as a dozen copies of the molecule per cell nucleus.

Now the problem that we and others have had in extending that technology from a research setting into a clinical setting is it has been daunting. And it has actually caused us a lot of vexation internally until very recently as we have learned how to reverse the issues. So you have problems of how long does it take to access, store, preserve and ship the sample in a clinical setting that in many cases in our early work actually destroys the activity of the enzyme. So we have to learn how to preserve the activity of the enzyme in ways that were clinically appropriate in a clinical setting, where you have a busy clinic, nurses are collecting samples, and the tubes sit at room temperature for six hours before they're shipped to the lab. That's just the reality.

So we've learned how to do that and that is why we're now much more optimistic of about being able to understand the relationship between PK and PD in our 163L trials. Now turning to the heart of your question, how can we use these assays in a diagnostic setting for cancer? Our initial hope was that the use of these reagents for the so called gray zone samples, for example frozen sections removed in the OR where there's an exploratory laparotomy to determine, are the margins of the bowel rescission clean of tumor and the guy and the pathologist on the hot seat looks at a stained sample and he has to make the call, does the surgeon remove more bowel or is the operation complete. And that's often this pathology decision that has a large error bar.

We've just not been able to generate much interest in that utility of these reagents. We then went to looking at measuring telomerase activity in fluids, pleural effusion fluids, plasma of patient bearing tumors, and more recently in bladder. And the simple bottom line with regard to Roche's efforts in that regard is that their PCR and Elisa technologies simply were not sensitive enough to reliably pick up telomerase early enough in the course of an evolving tumor to give it prognostic or even diagnostic value. We think that that problem will be solved by the Sienna biosensor technology, which is a lot more sensitive, at least in the urine bladder cancer scenario.

So there, as you know urine is essentially a wash of the lining of the bladder and therefore contains low amounts of telomerase activity which their assay reliably measures. And that can be used as a valuable screening for patients with asymptomatic hematuria who may have a sub-clinical bladder malignancy that is not detectable by cystoscopy. So that's the screening application.

The second application would be for follow-up on patients with bladder cancer who make the diagnosis, who were then treated, but as you know, bladder cancer has a high recurrence rate and the detection of recurrence by repeat invasive cystoscopy is fraught with difficulties, both practical and technical. So if you had an assay that really worked and detected nascent recurrence of bladder cancer in urine, it would become widely used. And that remains the number one application of telomerase technology for detecting cancer.

Operator

Your next question comes from the line of Graig Suvannavejh with UBS. Please proceed.

Graig Suvannavejh - UBS

Hi, guys. Good morning. How are you today?

Tom Okarma

Fine, Graig. How are you?

Graig Suvannavejh - UBS

Good. Just two questions, if I may. One, on the four Phase I, Phase II trials that will be up and running, let's just say by the next three to six months or so, while you've given some guidance around data in the multiple myeloma study for ASH of 2008, is there a way you might be able to provide just a very rough guidance on when we might be able to get some initial results from the other three trials? And then my second question just has to do [Technical Difficulty]

Tom Okarma

Your second question is what? I think we've lost him. Operator, are we live on the line?

Operator

Yes, sir. I apologize. Your next question comes from the line of --

Tom Okarma

Wait, wait. Graig, I've lost your line.

Operator

Oh, yes, Graig disconnected.

Tom Okarma

I will try to answer what I think you asked first. I did not hear your second question. So the two new trials that are Phase I/II that are about to begin are a combination myeloma and a combination breast. I doubt very much that we will have significant validated vetted data on either of those two trials by year's end to present at a cancer meeting. So the main event at end of the year will be the single agent multiple myeloma study, which, as we've said many times, is really our main event this year in terms of it being the earliest possible registration pathway. And to reiterate, our enthusiasm for the myeloma target is that it very dramatically fits our four criteria for tumor target on our 163L program.

And those criteria are that the tumor has a high expression of telomerase in the tumor cells and that the outcome of patients with that tumor is highly correlated with telomerase expression. The more telomerase activity, the worse is the outcome, the more rapid and complete are the relapses, the more difficult and recalcitrant they are to therapy.

Thirdly; we obviously have to have in vitro xenograft activity of the drug as a single agent or in combination, which we have in spades for myeloma. And then fourthly and most importantly, all of the tumors need to have identified tumor stem cells in their tumors. And that is the case for myeloma, lung and breast. And the case of myeloma, we have demonstrated at Johns Hopkins that our drug as a single agent is not only effective at killing the mature myeloma cell, but in a matter of days inhibits the myeloma stem cell. And that is the reason that we are pushing ahead aggressively in the clinic with the myeloma study.

So again, and our objective here is not just to achieve an approval of a new cancer agent based on some marginal clinical outcome. We are going for major changes in cancer outcome based upon the inhibition of a widely expressed and critical target in cancer that this drug shuts down completely and which is highly involved in the entire field of tumor stem cell biology. There's more data that will be coming out in the peer reviewed literature over the year that is this year detailing the role of telomerase in cancer stem cells.

So we didn't invent that. That just happened to be the case. And for reasons that we're still exploring with a variety of [SRAs], the activity of the drug in cancer stem cells seems to be enhanced over the activity of the drug compared to mature cells from the same tumor sample. So as you know, the world of tumor stem cells is exploding in importance. There are companies that are being founded solely to explore the biology of tumor stem cells. We have a drug that uniquely hits them all.

David Greenwood

May I have the next question?

Operator

Your next question comes from the line of [Sanford Johnson] with [Retirement Planning Associates]. Please proceed.

Sanford Johnson - Retirement Planning Associates

Morning gentlemen, I have just a couple of questions. The first question is with our patents on the hepatocytes. Somewhere a few months back the major pharmaceutical companies were talking about developing this type to study the events in the liver and so forth. Would they have to go through us in order to develop these hepatocytes?

Tom Okarma

Yeah. Short answer is yes. And you're referring to a consortium in the UK that several large pharma companies have contributed to. Our hepatocytes are being evaluated by a pharma for that exact same purpose.

We do own the field of generating liver cells for ADMETox, and honestly we have a ways to go yet before these hepatocytes are fully matured, but we're getting there.

Sanford Johnson - Retirement Planning Associates

But my question was that can they circumvent us and develop their own, since I thought we had the patent on

Tom Okarma

The simple answer is that no patent can be construed to give full protection for anything. There's always the possibility of an inventive step that circumvents the methods of compositions that are claimed in the IP.

However, we don't see that as being likely in the hepatocyte case both because of our IP on the hepatocyte itself and because of the IP that was granted to us in February, which covers our method of generating the precursors to hepatocytes. So the likelihood of your hypothesize happening is very, very low.

David Greenwood

Next question?

Operator

Your next question comes from the line of Graig Suvannavejh with UBS. Please proceed.

Graig Suvannavejh - UBS

Hey, thanks. Sorry about that before. Thank you for answering the first question. My second actually had to do with just your overall thoughts now that the FDA's advisory panel meeting on stem cells has passed. And certainly there was a lot of at least media attention on that event.

I think it was clear it wasn't a review of any of your programs, but now that's kind of settled and is in the background. Just wanted to know what your just overall thoughts were?

Tom Okarma

Well, I guess it's an example of the excessive froth that's in the media, in the lay public on this issue. As you probably know, this is a standard check-the-box exercise that FDA frequently uses when it begins to seriously regulate new technologies.

So as you know, we have been in direct communication with the agency on our embryonic stem cell program since 2004. And all of the points to consider and the principles that were illustrated in that public meeting are consonant with and in part driven by our direct interactions with the agency.

So we didn't see that this meeting was going to shed any new information on the regulatory strategy over embryonic stem cells and in fact, it did not. It did give the public, both the lay public and the academic science community, an opportunity to comment on both the FDA's position and on the generic positions that were promoted by both Geron and other invited companies who presented there.

We did not learn anything. There were no surprises for us. And simply stated, our philosophy I think of the content of the IND is right on point with theirs.

David Greenwood

Next question?

Operator

Your next question comes from the line of [Victoria Leasit] a Private Investor. Please proceed.

Victoria Leasit - Private Investor

Gentlemen. I was just wondering, going to the financial side of the issue here. Two questions, one, I noticed that interest income was down for the first quarter pretty substantially, as we should have come to expect given the market. But do you anticipate a need to.

David Greenwood

Hello?

Tom Okarma

Sorry, we lost you again.

Operator

One moment, please.

David Greenwood

Hello?

Operator

Ma'am, your line is open again.

David Greenwood

Victoria, would you just repeat your question? Thanks.

Victoria Leasit - Private Investor

Okay. Do you anticipate the need to raise additional capital, is the first question. And then do you have any projection for revenues on the licensing or other revenues that you anticipate in '08?

David Greenwood

Yeah, so three questions. First, back on the portfolio. Our interest income is a function of market rates and market rates have been tracking down as the yield curve gets back to a normal shape.

Having said that, when we benchmark our portfolio yields against comparable portfolios by fund managers, we actually outperformed them period-to-period by some number of basis points, that's not because we're risk takers because, as I said earlier, we're very careful about what paper we buy, and for instance, made a conscious decision three years or so ago to not invest in the auction rate reset notes and so on. So our earnings from the portfolio will track the yield curve.

Your question on financing, we've got almost $200 million in the bank. Our net burn, cash burn in '07 was about $40 million. It'll be a little higher than that this year. It's a little hard to predict with accuracy. But somewhat north of 40, so I think we've got three year's capital on the balance sheet. So I think we can plan strategically and invest strategically.

Having said that, we will never find ourselves in a situation where we have lost the ability to do that, so we will keep the balance sheet strong. Having said that, we're not interested in selling a lot of stock at $5, so that's the best answer I can give you on the financing question.

And thirdly, your third question was revenue. And our revenues are sort of operating revenues, only amount to a couple million dollars a year. And I think history's a good predictor of the near future on that. There are other milestones associated with different licensing deals that are in place and those could be triggered, which would mean inflows.

But those are unpredictable with respect to their success and timing both. So I do think the interest income which probably ought to be around $7 million or $8 million for the year, will be our principle line of business in '08 with respect to generating revenues.

Victoria Leasit - Private Investor

Thank you.

Operator

Your next question comes from the line of Graig Suvannavejh with UBS. Please proceed.

David Greenwood

I think, operator that we circled back to Greg and got his second question.

Operator

Okay. He was still in queue again. And so your next question, then, comes from the line of [Al Pincus], one moment. Please proceed, sir.

Al Pincus

Yes, good morning. I also have a question about the FDA meeting on April 10th. I read a lot of what was said in the meeting. Is it fair to say that this IND for the spinal cord therapy is actually going to be long, long, time away, sir, or am I just reading something else into this?

Tom Okarma

There have been comments in the analysis lay press that were, surprisingly to me, dower and predicted just as your question frames, that the FDA is very resistant to granting INDs generally in the field of human embryonic stem cells.

While again I can't give you any specific commentary or color on our application, I can tell you that generally speaking, from multiple interactions face-to-face with the agency we do not detect any such resistance that is specific to ES cells or general about cell therapy.

There is a widespread notion that for example, the regulatory pathway for embryonic stem cells, be it IND approvals or product approvals, is somehow tortuous or undefined. And that is anything but the truth. And that's coming from someone who's been in the cell therapy field for longer than I care to admit.

So we do not in any shape, manner or form subscribe to the crepe hangers who are out there predicting that there is a higher bar for embryonic cell based therapies than for other kinds of cell or gene therapy.

Now, having said that, there are of course unique issues surrounding embryonic stem cells and we are quite confident that we and our application have traversed them. So we do not see any generic or specific barriers to proceeding down the clinical pathway in the near-term with embryonic stem cells from Geron.

Al Pincus

Thank you.

Operator

(Operator Instructions).

Tom Okarma

Okay. Well I think if there are no other questions then we will bring today's conference call to a close. Again, I thank you all very much for your good questions and for your participation. Have a good day.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.

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