Geron Corporation (GERN) Imeteslstat Program Update Call Transcript

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About: Geron Corporation (GERN)
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Geron Corporation. (NASDAQ:GERN) Imeteslstat Program Update Call May 16, 2019 9:00 AM ET

Company Participants

Suzanne Messere - Investor Relations

John Scarlett - Chairman and CEO

Olivia Bloom - Chief Financial Officer

Andrew Grethlein - Chief Operating Officer

Aleksandra Rizo - Chief Medical Officer.

Conference Call Participants

Chad Messer - Needham & Company

Tom Shrader - BTIG

George Zavoico - B. Riley FBR

Operator

Good day, ladies and gentlemen and welcome to Geron’s Imetelstat Program Update Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions].

I would now like to introduce your host for today’s conference, Ms. Suzanne Messere, Investor Relations from Geron. You may begin, Ma’am.

Suzanne Messere

Thank you, Kevin, and good morning, everyone. Thank you for joining us for today’s conference call. I am joined today by Dr. John Scarlett, Geron’s Chairman and Chief Executive Officer; Olivia Bloom, the Company’s Chief Financial Officer, Dr. Andrew Grethlein, Geron’s Chief Operating Officer and Dr. Aleksandra Rizo, the Company’s Chief Medical Officer.

This morning, we published two press releases that are now available on our website at www.geron.com/investors.

The first press release announced the appointment of two additional members to our senior leadership team. The second press release was an Imetelstat Program Update announcing the transfer of the Imetelstat IND sponsorship from Janssen to Geron. In that press release, we also provided updates to our 2019 objectives and affirmed our plans to open the Phase 3 portion of IMerge to screening and enrollment by mid-year. Our expected plans and timing for conducting an End of Phase 2 Meeting with the FDA to discuss potential regulatory strategy for Imetelstat in relapsed/refractory myelofibrosis patients, our revised financial guidance for 2019.

This morning, management will discuss the information from today’s press releases as well as the discussion of future presentation of Imetelstat clinical data. A live webcast of the call is also available on our website and will be archived for 30 days.

Before we begin, please note that except for statements of historical fact, the statements during this conference call and question and answer are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These include, without limitation, statements regarding, the expectations, plans, timelines and prospects for the Imetelstat and Geron including without limitation that patients screening and enrollment for the Phase 3 portion of IMerge will open by mid-year 2019, that the transition of the Imetelstat program will be complete by the end of the third quarters of 2019. That more mature data from the Phase 2 portion of IMerge will be available and submitted for presentation at a medical conference in 2019.

That Geron will conduct an End of Phase 2 Meeting with the FDA by the end of the first quarter of 2020 and subsequently provide a decision regarding the potentials of late-stage development of Imetelstat in relapsed/refractory MF patients.

That the Company’s operating expenses will be $80 million to $85 million in 2019 and other plans, expectations and projections 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 whether the Company overcomes all of the A; Challenges of completing the transition of the Imetelstat program from Janssen and B; clinical safety and efficacy, technical, scientific, manufacturing and regulatory challenges to enable the screening and enrollment of the Phase 3 portion of IMerge to open by mid-year 2019.

Whether regulatory authorities permit the further development of Imetelstat on a timely basis, whether any future efficacy or safety result may cause the benefit risk profile of Imetelstat to become unacceptable. Whether Geron is able to perform the analysis and complete the required activities in order to conduct an End of Phase 2 Meeting by the end of the first quarter of 2020, and whether Geron has underestimated its 2019 operating expenses or has not anticipated contingencies that may require more expenditure.

Additional information and factors that could cause actual results to differ materially from those in the forward looking statements are contained in Geron’s periodic report filed with the SEC under the heading “Risk Factors”, including Geron’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2019.

Undue reliance should not be placed on forward-looking statements, which speak only as of the day 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.

With that, I'd like to turn the call the call over to Dr. John Scarlett, Geron’s Chairman and CEO. Chip?

John Scarlett

Thanks very much Suzanne and good morning everyone. 2019 is off to a strong start with the IND transfer now complete. By completing transfer, the sponsorship of the IND, we will gain full access to the Imetelstat data accumulated over the past four years, and have full control of the development decisions for the drug.

This also enables us to move forward with the opening of the planned Phase 3 clinical trial in low risk MDS for which we expect site initiations to begin in July and screening and enrollment to begin in August.

As Suzanne mentioned, we're joined today by Dr. Andrew Grethlein, our Chief Operating Officer who will discuss the IND transfer and other elements of the transition of the Imetelstat program from Janssen back to Geron.

He will also comment on our plans to purchase significant inventory of Imetelstat materials from Janssen. Andy?

Andrew Grethlein

Thanks, Jeff. The formal transfer of the Imetelstat IND sponsorship occurred earlier this week. Before I go any further, I'd like to thank our employees and consultants as well as our Janssen and CRO colleagues who have all worked tirelessly since the end of last year to achieve this important objective.

With the IND transfer complete, and the hiring of very experienced employees this year, we can now accelerate our startup activities for the planned Phase 3 portion of IMerge. We expect to complete numerous other transition activities for the Imetelstat program by the end of the third quarter, including the transfer of remaining non-clinical, manufacturing, and ex-U.S. clinical and regulatory responsibilities from Janssen.

I'd also like to comment on the manufacturing status for Imetelstat. We are making good progress in re-establishing the Geron supply chain for the product, which is aided by the fact that Geron established the original supply chain before the Janssen collaboration, much of which has remained intact with Janssen's use of the same contract manufacturers.

We expect to have engaged all necessary contract manufacturing vendors by the end of the third quarter of this year. In addition, we are taking the opportunity to purchase from Janssen substantial inventories of Imetelstat drug substance and drug product, as well as raw materials required for additional drug substance manufacturing.

We expect this inventory to be sufficient to supply the entire phase 3 portion of IMerge and to serve as initial supply for future clinical trials of Imetelstat in other indications. Olivia will update our financial guidance to account for the onetime costs to acquire these important materials that are available at Janssen.

I'm also delighted to announce the hiring of Pat Murphy as our Vice President of Manufacturing. Pat has an extensive leadership background in manufacturing and technical operations and has guided over 10 new investigational products from pilot to full scale commercial production, while ensuring both product, and facility compliance with the regulations for both FDA and EMA, The European Medicines Agency.

Pat will join with Denise Grippo, our newly hired Vice President of Quality to develop our long term global CMC strategy for Imetelstat. A more extensive biography for Pat is included in the new hire press release we issued today.

With that, I'd like to turn the call over to Dr. Aleksandra Rizo, our Chief Medical Officer. Aleksandra?

Aleksandra Rizo

Thank you, Andy. Good morning everyone. We also issued a third press release this morning announcing that two abstracts containing updated clinical data and analysis related to Imetelstat have been accepted for presentation at the 24th European Hematology Association or EHA Annual Congress to be held in Amsterdam, the Netherlands from June 13, to 16, 2019.

The press release is now available on our website at geron.com/investors. The abstracts are available on the EHA website at www.ehaweb.org/congress. In recognition of the IMbark policies of EHA, our discussion on this call will be limited to the data information contained in the abstracts and our press release this morning.

The first abstract, which has been accepted for an oral presentation on Saturday, June 15th, contains updated efficacy and safety data from 38 patients in the Phase 2 portion of IMerge. As a reminder, IMerge is a two part clinical trial of Imetelstat in transfusion-dependent patients with low or Intermediate-1 risk myelodysplastic syndromes, also referred to as a lower risk MDS.

The first part is designed as a Phase 2 clinical trial in transfusion-dependent non-del (5q) lower risk MDS patients who are relapsed or refractory to erythropoiesis stimulating agent and are naïve to hypomethylating agent and lenalidomide treatment.

The primary efficacy endpoint of the trial is 8-week TI rate, which is defined as the proportion of patients without any red blood cell transfusion, known as the transfusion independence or TI during any consecutive 8-weeks since entry into the trial.

In the preliminary data set used to prepare the abstract, the 8-week TI rate was 45%, meaning 17 of 38 patients achieved transfusion dependence for at least 8 consecutive weeks. Based on data from the most recent clinical cut-off date, used to prepare the IMerge clinical data for the transition of the Imetelstat program to Geron, the 8-week TI rate is 42%, meaning 16 of 38 patients achieved TI for consecutive 8-weeks.

This is an increase of two new responders compared to the 8-week TI rate of 37% reported at the American Society of Hematology Annual Meeting in December 2018. As stated in the abstract, the most frequently reported adverse events were manageable and reversible grade 3 and grade 4 cytopenias.

We expect more mature efficacy and safety data to be presented at the oral presentation at the EHA Congress. These data further supports the initiation of the Phase 3 portion of IMerge, which we plan to open for screening and enrollment by mid-year 2019.

I will now move to the second abstract, which has been accepted as a poster presentation, and contains analysis of overall survival data from the IMbark Phase 2 clinical trial, Intermediate-2 or High-risk myelofibrosis patients who are relapsed/refractory to a JAK inhibitor and were treated with 9.4 milligram per kilogram of Imetelstat.

The overall survival or OS data from the IMbark Clinical trial were compared to real world data collected at the Moffitt Cancer Center from patients who had discontinued treatments from a JAK inhibitor and were subsequently treated with best available therapy.

To make a comparison between the IMbark Phase and the real-world data, a cohort from the real-world data was identified that closely match the IMbark patients using several clinically relevant baseline patient characteristics. These include platelet count, screen size time from diagnosis of the disease to JAK inhibitor discontinuation and myelofibrosis type.

As a next step, propensity score analyses were performed and showed that the calculated median OS was approximately 31 months with the Imetelstat treatment compared to approximately 12 months with best available therapy.

As stated in the abstract these analyses suggest that treatment with Imetelstat is associated with the lower risk of death when compared to best available therapy from closely matched real world data.

We expect further detail from the OS analyses to be provided in the poster presentation on Saturday, June 15 at the EHA Conference. In addition to this commentary about the two EHA abstracts, I’m also pleased to announce the appointment of Dr. Ying Wan as a President of Biometrics to my team.

Ying has more than 17 years of biometrics experience within oncology drug development. Prior to joining us, Ying was Director and Functional Leader in the Oncology Statistics and Decision Sciences Group at Janssen. Ying tenure at Janssen spend 12 years including leading statistical strategy for imetelstat and most recently multiple solid tumor programs across all stages of development. We are very fortunate to gain her deep expertise in biometrics.

With that, let me turn the call back to Chip.

John Scarlett

Thanks Aleksandra. As we announced in the press release this morning we’re revising our objective to communicate a decision whether to pursue late-stage development in relapsed/refractory MF by the end of the third quarter of 2019.

This revision is based on recently refined strategies for potential regulatory approval proposed by our new development team, as well as the time required to perform the analyses to support the strategies.

We believe the results of these analyses will enhance the potential for reaching agreement with the FDA on a timely and cost-effective regulatory strategy for imetelstat and relapsed/refractory MF.

So, we now plan to conduct an End of Phase 2 meeting with the FDA to discuss our potential strategies for MF by the end of the first quarter of 2020. Subsequent to this End of Phase 2 meeting we expect to provide a decision regarding late-stage development of imetelstat in relapsed/refractory MF.

Our decision will be influenced by an assessment of what would be required to achieve clinical and regulatory success imetelstat including the cost and duration of any clinical trails in this indication.

Now, I’d like to turn the call to Olivia, our CFO, who will review revised 2019 projected guidance. Olivia?

Olivia Bloom

Thank you, Chip, and good morning everyone. For the projected guidance for fiscal year 2020 we are increasing the operating expense burn to a range of $80 million to $85 million of which approximately $20 million to $25 million represents one-time cost.

The projected increase primarily reflect the purchase of approximately $10 of additional inventories of drug substance, drug product and raw materials for imetelstat manufacturing from Janssen that will purchase in 2019 as discussed by Andy earlier on the call, and higher clinical operational cost of approximately $5 million.

Our revised 2019 guidance also reflect cost associated with preparing for an End of Phase 2 meeting with the FDA, but does not include any other late-stage development cost for MF. As of May 15, 2019 we had 31 employees. We now plan to grow to a total of approximately 45 to 50 employees by year-end 2019 of whom half will be research and development personnel. This current projection reflects the successful recruiting pace this year.

As of the end of the first quarter we had $170 million in cash, cash equivalent, restricted cash and current and non-current marketable securities which is sufficient to commence the Plan Phase 3 clinical trial and low risk MDS.

Financial guidance is based on a set of assumptions that a point in time, and if those assumptions change significantly as a result of company activities and events then we expect to update guidance at that time.

And with that, I will turn the discussion back to Chip.

John Scarlett

Thanks Olivia. Well, in summary we’ve taken a very significant step towards achieving our objectives this year with the completion of the IND transfer. In addition, the new data reported in the EHA abstract this morning illustrates the potential clinical benefit of the Imetelstat treatment.

In particularly the eight -- increased to eight-week TI rate from the Phase 2 portion of the IMerge and high transfusion burden patient highlights Imetelstat potential role as a much needed alternative treatment in lower risk MDS.

For IMbark, the overall survival analysis in the abstract suggest a potential survival benefit of Imetelstat treatment in relapsed/refractory myelofibrosis when compared to best available therapy in a real-world data setting. We expect 2019 to be a pivotal year for the company and believe we were off to a strong start.

And with that, we’re now happy to answer your questions. I’ll turn the call back to our operator.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Chad Messer with Needham & Company.

Chad Messer

Great. Good morning and thanks for taking my questions. First one from me, the IMerge update, pretty exciting there. Is it possible to comment on how many patients are still in the evaluation period at various time points?

John Scarlett

No. We’re not making that – we’re not making those specific commentary available, Chad.

Chad Messer

Okay. All right. Well, I guess we’ll just have to learn more at the EHA. And then..

John Scarlett

Yes. If the issue is the IMbark. Yes, we just can’t comment on the – we can’t comment on these abstracts due to the EHA procedures.

Chad Messer

Okay. Fair enough. I can wait another month. And then, if I could just poke a little bit more on the six months that you need to do analyses before your End of Phase 2 meeting, anything you could share on what kind of analyses these are?

John Scarlett

Well, I think as you know, we consider all of our conversations including prospective conversations with regulatory agencies and FDA in particular really to be confidential and its something that we want to have the discussion with them before commenting publicly on it. We also consider this to be proprietary information. We have a really experienced development group. We have a lot of insights I think from the world in general and how regulatory theories can be conducted. And I think that what we want to do now is to take the time to really put together a strong End of Phase 2 package to submit that and then to have the meeting.

Once we have a meeting of course which we expect by the end of the first quarter of 2020, we’ll obviously have to take into account the feedback from the meeting before we can make a decision on late-stage development and when we do to make that decision, we’ll obviously share that with everyone.

Chad Messer

All right. Great. Thanks and good luck. There’s certainly a lot of unmet need in MF.

John Scarlett

Thank you very much.

Chad Messer

Appreciate it.

Operator

Our next question comes from Tom Shrader with BTIG.

Tom Shrader

Good morning. Chad just asked both my questions, but I’m a smart guy. I guess I have one – I have one sort of modest question. In IMerge what's the longest time you've seen for a patient to have a distorted eight-week TI? The question is, I guess it speaks of the tolerability of the drug, how long physicians will wait with the drug. Just speak to that, how long are these patients before they’ll see response? Is there any data you can give us there?

John Scarlett

Well, I’ll try and work around the edges of the IMbark, Tom. So first of all, you’ll recall back at ASH, we saw a lot of early responses, right. Many -- if I recall sort of the average time of to response is somewhere around eight weeks which is pretty exciting. What I think is interesting though is that the mechanism of action of the drug would suggest that in patients with really high transfusion burden. It may take a longer time to effectively suppress the malignant clone. That at least one theory of how this all works as you know.

And if that’s the case, we would think that there would be the possibility for quite a bit later transfusion responses. And I might just pause it. I don’t know that is actually true, but I might pause it, that that would be sort of the length of time might be inversely related in some cases to the degree of transfusion burden, so how really sick patients are. I’m afraid to actually give you real data. We’re going to have wait on that to the presentation. But I think that it’s not – with this mechanism action, I think its not unreasonable to expect that it would take – that we would have some later responses than we saw initially early on in the study. But we’ll have wait for that for the final data to be presented.

Tom Shrader

Okay. And one other – so I guess to follow-up on Chad’s question. It seemed reasonable that the IMbark delay might have to do with historical data, assembling historical data, but you kind of release that today. So are you done with that now? Do you think you have all the historical data? Are we done seeing evaluations or could there be more of that?

John Scarlett

Tom, I love your perseverance. Here is the best way to put that. I would just simply say that we consider our approach is to this. I mean, as you know this is a competitive marketplace and we consider our approach is to how we’re going to deal with regulatory agencies, potential approvals and the like. We do consider not only confidential, but as said before proprietary. So I think I’m going to just refrain from any further discussion. This will all come out in reasonable period of time. And now like six plus months seems like tremendous length of time. It will go by in an eye blink. And I think that what our goal is to be clear about it, is to prepare the most compelling story and set a potential strategy and have a really fulsome conversation with the agency.

I think that’s going to be possible. I think we got the people. We got the data. And so, I think we just have to wait until we’ve done that. Obviously, a successful meeting for us would be where we gain importance insights and how the FDA views, potential registration strategies and we’ll be very excited to share with you. I hope we’ll be excited to share with you the outcome of those discussions.

Tom Shrader

Okay. Thanks for the help and thanks Chad for the help.

Operator

The next question comes from George Zavoico with B. Riley FBR.

George Zavoico

Hi, everyone and – well, I’m afraid to ask any questions here.

John Scarlett

We’re going to have to start with lottery for who get to go first.

George Zavoico

No. My question has to do with the IMerge Phase 3 trial, that you’ve now guided to starting to recruit patients by August. In terms of press release, refractory to prior treatment with ESAs, now, Luspatercept, BLA went in last month. So sometime during the course of IMerge going forward Luspatercept will be approved presumably assuming it will. So will IMerge than recruit patients that have failed Luspatercept and ESAs?

Olivia Bloom

So, the Phase 3 portion of the study will be enrolling patients that are refractory to ESAs, right. The definitions of refractory are slightly different between the two trials. Our trial requires slightly more refractory. So I can say that patients then the Luspatercept trial. But I don’t think that there will be any impacts on the Luspatercept’s filing on Imetelstat. I mean, we still believe that the increased [Indiscernible] theory from the Phase 2 portion of IMerge in high transfusion burden patients really highlights Imetelstat potential role as a much needed alternative treatment in lower-risk MDS patient. Did that answer your question?

George Zavoico

Well, I agree with – I agree with that. But I’m just wondering that in the course of the trial from patients will be put on Luspatercept instead of ESAs and will then fail Luspatercept. And instead of going to in ESA, I mean, how does that affect your inclusion criteria? That’s what I’m wondering prior treatment with Luspatercept, let just put it that way.

Olivia Bloom

Right. I think I would refrain from answering this question at the moment. I don’t think we would have – we would discuss that at this call.

George Zavoico

Okay.

John Scarlett

We consider the protocol confidential and I think that again from proprietary purposes we’re probably not going to make too many comments about this specifics of that, so we’ll come out in the wash eventually, I'm sure.

George Zavoico

That will come out when it's on clinicaltrial.gov when it's posted on cyclicaltrial.gov I presume.

John Scarlett

Well, we'll see.

George Zavoico

Okay. Okay, and any projections as to -- well I probably cannot say there. So never mind. All right. Now I understand, I don't want to push the envelope here too much. So, but I do have one more question you said, half of the people you're going to be adding this year will be in R&D. And is that going to be mainly in support of IMbark and IMerge or is it -- are you going to look anymore at all for potential other indications for Imetelstat within that budget and the R&D personnel?

John Scarlett

Yes, well as we commented before George, certainly one of the reasons we're building out of you know a really full drug development team with this kind of deep expertise is, clearly to evaluate potential asset acquisitions. And so this enables us to look at individual compounds as well as platform technologies, whereas before we had a look predominantly at company acquisitions etcetera that would bring in development team with them.

So I think this is a really important strategic move that we're making. Nevertheless, the first job of this team and the company is to get our Phase 3 lower risk MDS trial up in running and evaluating the potential MF strategy. So those are jobs number one, and one and a half, and other potential asset acquisitions would be would be the second.

Now of course, once we finished with – once we finish with sort of getting everything on track and in MDS and MF, we can then turn our attention to these other indications as well as other assets, other indications, and we've mentioned AML, but we haven't given any insights into when or how that might be proceeding.

George Zavoico

Okay. Great. Thanks. Thanks for taking the questions.

John Scarlett

Thanks. Thanks for the interest.

Operator

And I'm not showing any further questions at this time.

John Scarlett

Well thank you all very much for your time. And we look forward to future communication. So have a good day.

Operator

Well ladies and gentlemen, this concludes today’s presentation. You may now disconnect and have a wonderful day.