Geron Corporation (GERN) Earnings Call Transcript & Summary

Okay. Welcome to our 2022 Morgan Stanley Healthcare Conference. My name is [ Brock ], I'm an Executive Director in the Healthcare Investment Banking Group here at Morgan Stanley. Before we get started, I'll just read a quick research disclosure. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, maybe I'd like to thank you for coming to our conference today. Today, we have CEO, Chip Scarlett from Geron. Maybe Chip, would you mind telling us a little bit about yourself?

Sure. I'd be happy to. First of all, let me read a quick FLS, just like you have your disclosures, we have ours. So during the course of this fireside chat, there will be forward-looking statements regarding future events, performance, plans, expectations and other projections, including those relating to the therapeutic potential of and potential regulatory approval of imetelstat, anticipated clinical and commercial events and related time lines, the sufficiency of Geron's financial resources and other statements that are not historical facts. Actual events or results could differ materially. Please refer to the discussion of the handing Risk Factors in Geron's quarterly report on Form 10-Q for the quarter ended June 30, 2022, which identifies important factors that could cause actual results to differ materially from those contained in the forward-looking statements. Geron undertakes no duty or obligation to update our forward-looking statements. So I'd like to thank [ Brock ] and the rest of the Morgan Stanley team for inviting us to this very nice venue and fireside chat. I'm Chip Scarlett. I've been the CEO of Geron for the last -- almost 11 years. And my colleague, Olivia Bloom, who has been there even longer than me often says the first 10 years go the fastest. So that's all I can say. I think she's right. Why don't we go ahead and get started, if that's adequate.

Yes. Great, thank you, Chip. So maybe just too kickoff question here is, Geron's been around for some time and many of your -- many of our investors who are here today may not necessarily have had an update on the company in a while. Can you give us a high -- very high level overview of your focus and your pipeline today?

Sure, happy to do so. Well, Geron's early research and that of our collaborators at the time, identified telomerase is a key molecular target in oncology. And imetelstat, which is our first-in-class telomerase inhibitor was discovered and developed entirely in-house by Geron. So around 2012, we began focusing on myeloid hematologic malignancies, which included lower-risk myelodysplastic syndrome and also myelofibrosis. In our Phase II study of lower-risk MDS, we showed imetelstat had a really highly differentiated profile with very high rates and remarkable durability of transfusion independence in patients with low-risk MDS who have the principal clinical problem of transfusion-dependent anemia. We completed enrollment in a double-blind, placebo-controlled MDS Phase III study last October in 2021. And we will disclose top line results from that Phase III registrational intent study in early January of '23. So that's MDS. We're very committed to seeing imetelstat commercialized and made available in this disorder. And assuming positive TLR in January, we're executing a stage-gated commercialization strategy with the assumption we'll file an NDA in the first half of '23 and launch in the U.S. in the first half of '24. Now we also have an indication that we've been studying for some time, JAK-refractory myelofibrosis. This is in patients who have failed the JAK inhibitor. And in a Phase II study of that, we showed strong evidence of a survival benefit in imetelstat-treated patients. And in that, we saw around 30 months of median overall survival versus 14 to 16 in the historical literature. So also, we have a phase -- large Phase III study of imetelstat versus best available therapy that's now enrolling. And we expect on our current time lines to conduct a planned interim analysis of that study in 2024, and it's obviously a registrational intent as well. And we can talk about it more if we have time. And then to round out the pipeline, we have some investigator-led studies in AML and some preclinical models in lymphoid heme-malignancies, and we did just announce the start of a frontline MF study in combination with the leading JAK inhibitor, ruxolitinib. So it's a busy day for all of us. And again, we appreciate being here.

Great. Thank you, Chip. That's really helpful and thorough. Maybe just to get us more grounded, can you talk a little bit about the biology of telomerase inhibition and the rationale for telomerase inhibition in these various hematological malignancies?

I never thought you'd ask. So it starts out the telomeres have been known for a long time, although their actual structure was just reduced in the '80s, 1980s. And their end caps on the chromosomes that a rate made up of repeating base pairs. And if we think kind of teleologically for a moment, normal length telomeres prevent the chromosome from being accessible to DNA repair mechanisms within the cells. So that means normal length telomeres are cell survival factors. Now this is the key biologic insight that really led to this whole concept of using a telomerase inhibitor in malignancy. When normal or malignant cells divide, the telomeres shorten -- mechanically shortened during mitotic division, just fundamental biology. So when the telomerase become short enough, those DNA repair mechanisms come into play and the cell dies at apoptosis. Now that's fine for normal cells that haven't need to use [indiscernible] right? But what about stem cells or other cells like that need to be immortalized, how do they maintain telomere length in order to be immortalized? And the answer was, nature is providing an enzyme telomerase, that adds back base pairs to the ends of chromosomes, and that prevents the telomere shortening and resulting a apoptosis, even in highly proliferative states. So you would guess, I suspect that many cancer cells actually constitutively up-regulate telomerase, which is the case. And that's the secret to those cancer cells continued ability to proliferate. So telomerase has increased in MDS and MF cells and telomerase is thought to allow or to drive the expansion of the malignant stem and progenitor cells that are really responsible for the disease. So the rationale for use of telomerase inhibitors to prevent rapidly proliferated malignant stem and progenitor cell clones from maintaining normal telomere length and thus allowing telomere attrition resulting in cell death.

Great. Thank you, Chip. I think maybe going from translating from textbook to kind of what you've observed in the clinic, what evidence have you -- and you've alluded to some of this already, but what evidence in the clinic have you seen that supports this disease-modifying mechanism thesis?

Sure. So first of all, let's be really clear. The mechanism of action of a telomerase inhibitor strikes at the real heart of the survival of malignant stems and progenitor cells that are driving the disease. So that's kind of the basis, right? That's what we just said. At a molecular level, in patients treated with imetelstat, we see depletion of mutated and cytogenetically abnormal malignant cells. That's a fact, and we've reported that on numerous occasions. Now critically, those depletions of mutated and cytogenetically abnormal cells, they're correlated with the key clinical benefits that we've seen. So for example, in MDS, the depletion of malignant cells are correlated with greater 8-week transfusion independence and a longer duration of transfusion independence. In MF, depletion of the malignant cells are correlated with improvements in bone marrow fibrosis and improved overall survival. So I think we have really good prima facie evidence that this mechanism is disease-modifying, and then we have really good scientific data to support it.

Great. And I can't wait to start digging to some of that in this session today. Chip, can you just give us an overview of the low-risk MDS treatment landscape and how you all fit to that landscape?

Sure. So the current treatment paradigm for low-risk MDS includes initial treatment with erythropoiesis-stimulating agents, ESAs, like EPO, and unfortunately, most of those fail after 18 to 24 months and patients who might have started down the path of transfusion dependence, even if they become transfusion independent on ESAs, then they fail them and they start becoming more and more transfusion dependent. So at that point, you need another option. And the treatment options for patients, who are transfusion-dependent and relapsed and refractory to ESAs are really today, it's Reblozyl or luspatercept, a BMS drug that is labeled for use in so-called Ring Sideroblast or RS-positive patients only. The worldwide sales in 2021 of that drug were around $500 million, and considering that was only a little bit less than 3 years into the launch in the face of COVID, means that there's a kind of pent-up demand for new products there. Now our Phase II data in this same area showed that imetelstat addressed really key unmet medical needs in lower-risk MDS. So we have evidence of disease modifying activity that we just talked about. There's clearly a need for a higher rate of transfusion independence than you can get today. And we had 48 -- 42% of our patients had an 8-week TI. Probably most important in what patients and doctors really would like to see is durability of transfusion independence. And so we've had a mean duration of our transfusion independence of over 88 weeks, which is really extraordinary. And some patients have been transfusion independent for over a year. So that's pretty unprecedented. And finally, the ability to treat both RS-positive and RS-negative patients and also the ability to treat very high transfusion burden patients as opposed to fairly high transfusion burden patients. So you'd really like to be able to treat across the full panoply of patients, who have this disorder.

Got it. Can you maybe just maybe double-click on that point, which is RS-positive and negative. What does that mean?

So ring sideroblast are morphologic things that you see in the bone marrow when you look with light microscopy. They're frequently associated with a particular mutation in the so-called spliceosome, which is the SF3B1 mutation. This is a fairly common mutation seen in patients with who are RS-positive. And what we've seen in our own studies is that when we take patients who are SF3B1 positive, you can measure the sort of the effect of a drug or a treatment on the underlying disease in the bone marrow by following the daughter cells that come out from the malignant clones that effectively have biomarkers on them. And in this case, the genetic abnormalities, SF3B1 are actually a biomarker for a cell that comes from a malignant colon as opposed to a normal clone. Normal clones of hematopoietic stem cells and progenitor cells don't carry the SF3B1 mutation. So what we've been able to show is that the SF3B1 variant allele frequency is what it's called, that is the proportion of cells that carry that biomarker, actually goes down after treatment with imetelstat in substantially in some cases. So that's another evidence that we're actually affecting the underlying malignant stem and progenitor cells, which is another really good prima facie evidence of disease modification. So that's what RS-positive patients are. There are patients who are so-called RS-negative, meaning they don't have this morphologic feature of ring sideroblast. And by and large, they don't carry the SF3B1 mutation. They may have other abnormal mutations that affect the underlying disease, but there are RS-negative. Now the reason people make a distinction between the 2 of them is this, RS-negative patients in most patients in most drugs hands have -- and just in the natural history of the disease, tend to be harder to treat and have a shorter survival than RS-positive patients. I'm not sure any of us really know the reason for that, but there was a very beautiful abstract given at ASH last year from astonish cohort, a very large number of RS-negative patients, and it really showed effectively that. For whatever reason, when Acceleron, Celgene started the luspatercept studies, they did not include RS-negative patients in that. So luspatercept is actually only approved for use in both the U.S. and the European approvals that they have for RS-positive patients. We've included both RS-positive and negative patients in our Phase III study. So look for that as an outcome of the Phase III when we report those results in early January of '23.

Great. Chip, thank you for that. It's a nice segue into talking about the Phase III trial design and also kind of what you can guide to in terms of what you're expecting in this upcoming January? And just tell us a little bit about what gives you confidence in this trial?

Sure. So as I said, I think, if we were to see results anywhere in the vicinity of what we've had in Phase II, we would consider it a real positive.

Which was?

Which were an 8-week TI in the upper 30s to low 40s. I'm just giving you broad characterizations, 24-week PIs in the 25% to 35% range, again, broad characterization, probably won't have time for a comprehensive analysis of 1-year TIs, just won't have had all of the patients on for over -- well over a year, and a manageable -- and a manageable safety profile that is conducive to long-term treatment. So that's sort of the basis of what we'd be looking for. Why do we have confidence, that we'll see that. Well, actually, the Phase III emerge protocol is extremely similar in many key ways to the Phase II protocol that we used in, gave us these great Phase II results. So the Phase III protocol is really -- is going to have the same patient population, same dose of imetelstat and scheduled administration, same primary and secondary endpoints and really very similar geographies for the clinical sites. In fact, about half of our clinical sites in the Phase III also participated at some level in the Phase II. So the data cutoff for the Phase III results will occur in mid-October. It's 1-year after the last patient enrolled in the study. That's by protocol. And the top line results are expected to be announced in early January of 2023.

Great. And just to maybe round lower-risk MDS. And you talked about RS-positive and negative. But can you talk a little bit -- can you characterize your commercial opportunity in lower-risk MDS? And what -- how -- and how are you preparing for eventual commercialization?

So we get this question a lot. And let me just say very directly, where the proponents of this drug, and it is our #1 and we're the ones who have asked patients to participate in all of these studies, there's been a long road to get here. It always is when you get to the end of Phase III. And so we are very committed to seeing imetelstat commercialized. And we will do whatever is necessary, successfully see it, successfully commercialized. Now we believe that the commercial opportunity is very remarkable. And it's because it looks like imetelstat, at least from the Phase II data represents a really potentially transformative treatment option, both in lower-risk MDS and ultimately, potentially in JAK refractory MF, which we can talk about in a minute. So why is that a transformative treatment? Well, because of, again, the durability of the transfusion independence that we've seen, the ability to treat a broader set of patients both RS-positive and RS-negative, the ability to treat very high transfusion burden patients as well as lower transfusion burden patients. And very importantly, I think, a differentiated and potentially disease-modifying mechanism of action. So that's really the reason that we're so committed to seeing the drug made available for patients in a commercial setting. So in contrast, of course, with current agents, as we have already talked about luspatercepts only indicated for RS-positive patients. And by the way, RS-positive patients only represent from an epidemiologic perspective, somewhere around 25% to 30% of the total -- sorry, the total ESA relapse and refractory lower-risk MDS patient population. There are other treatments that have been available for some time, including hypomethylating agents, HMAs, but they have really demonstrated quite limited efficacy in a fairly toxic side effect profile. And honestly, there are very limited options for heavily transfusion burden patients. So I think all of that put together says, there -- this whole market and this area is really set for an opportunity, have a new agent come on board. We hope our Phase III will support that.

Great. Thank you. Now shifting gears a little bit, myelofibrosis is a very crowded market. Can you maybe talk about the current treatment paradigm and strategic landscape and also more specifically on the JAK refractory myelofibrosis?

Well, I think it's funny that you say this. And by the way, I don't disagree, it's becoming crowded, but it's not very long ago that we would have said, boy, there's been very little innovation in myelofibrosis. If you think about the history of myelofibrosis for a second, until 10 years ago, there has never been an approved product in myelofibrosis. Think about that for a second. And all of the world, there have never been an actual specifically approved product that carried an indication of myelofibrosis. And then along came Jakafi, ruxolitinib, which was the first of the JAK inhibitors that was capable of treating these patients. Now look, before we go any further, let me just give a shout out to insight into the company and Novartis, both of whom commercialized Jakafi 10 years ago, beginning 10 years ago. That drug now does multiple billions of dollars a year in myelofibrosis. And it has brought a lot of relief to patients. Patients with myelofibrosis have a number of really significant issues. The one that's talked about often because it is part of the mechanism of action of that particular class of drugs is spleen volume reduction and symptom improvement. So you get that because the JAK inhibitors actually interrupt the JAK-STAT pathway, which is responsible for making many of the cytokines that are thought to do 2 things: one, they are thought to actually cause the constitutional symptoms, the night sweats, the weight loss and so forth that accompanies this disorder and can be very disabling for patients. And then the spleen volume response is just an objective measure of what happens to some patients have very enlarged spleens for a variety of different reasons, including the cytokine production. But the problem with all of that, and that's -- and we'll come back to the actual crowdedness of this market. The problem with all that is those patients still continue to progress. And as they progress, they clearly have a 4-shortened overall survival. And when patients fail a JAK inhibitor, they actually have historically only 14 to 16 months of overall survival left and in many databases, looking at claims data, it's only 12 months. So that's kind of the problem statement. Now what's happened is that as often happens in our industry, other people have started to sub-segment the JAK treatment paradigm. So we have now in patients who have thrombocytopenia, we have -- which is a -- which is an issue in many of these patients. We have pacritinib, which has recently been approved and it was actually doing reasonably well in the market for quite a modest size number of patients. We have momelotinib, which has had positive results in treating the anemia and I'm personally expecting that drug to be approved. That's another JAK inhibitor. A JAK inhibitor is being developed with pelabresib, which is a BET inhibitor that's being now developed by Constellation. But all of these are different flavors of JAK inhibition. So far as I know and we know, imetelstat is the only drug that is being actually developed for the indication of improved overall survival. So it's the only OS study that's underway right now in myelofibrosis. So I think imetelstat has a clearly differentiated profile from the other JAK inhibitor and JAK combination drugs. It's got the potential to extend the lives of patients non-responsive to JAK inhibitors. And we also see strong evidence of disease modification in the Phase II study that's quite similar to what we saw with the MDS.

Great, thank you Chip. I know we don't have too much time. So maybe we can kind of go through these quickly. So how did you -- tell us a little bit about your Phase III IMpactMF trial design, and if you can walk us through your thinking on how you designed that trial?

Absolutely. So in drug development, the golden bullet is overall survival. There's no real discounting that if you have a hazard ratio and you have statistically significant difference between your 2 treatment arms in a classic Phase III for overall survival, there's not a whole lot else you need to know. And so our Phase II EMBARK study, as I said, showed a median overall survival of 29.9 months and that compared favorably to the historic controls. We did a real-world data study in which showed the overall survival in the imetelstat treated patients for more than double beta patients on best available therapy. And so I think we were fully committed at that point to pursuing that as a real transformative treatment option. So that's how we really came to it.

Great. And you alluded to this a little bit, but what had you seen in your Phase II that made you kind of pursue this direction on pursuing overall survival?

Well, it's really the data. I mean the data was that we saw 29.9 months of median overall survival in imetelstat-treated patients compared to the historical controls of 14 to 16 months when we did sort of a real-world data study of patients treated with imetelstat and use the synthetic control arm as is done in real-world data studies of patients at the Moffitt Cancer Center that were treated with other best available therapy other than imetelstat. The difference was striking. It was 12 months for the BAT arm, and it was a little over 30 months for the imetelstat. So all of this really suggested that we were going to be able to be successful -- and given that and given the stakes and given the tremendous desire of key opinion leaders and others to have an overall survival benefit. We thought that was very worthwhile the effort to be put into it and would clearly differentiate the drug from everything else that's out there.

Great. You alluded to AML, lymphoid malignancies and frontline myelofibrosis. But can you just talk a little bit about additional programs and efforts within your broader pipeline?

Yes, I can. So AML is another case in which, there's extreme levels of proliferation. And when you talk about relapse and refractory AML patients, they have a very short survival. They have really they're a metabolic furnace usually in blast crisis when they come. And so this is an obvious place to potentially take away that ability of telomerase to up-regulate and to maintain tumor length and hence, survival of these very, very aggressive malignant stem cell and progenitor cell clones. So it makes a lot of sense. We have a study that is starting as a single-agent imetelstat in that population. It's called IMpress. And it will -- is expected to start by the end of the year. We have another investigator-led study called TELOMERE, which we have designed or which the investigators have come to us with the idea of evaluating 2 different combinations of imetelstat in relapsed/refractory high-risk MDS and AML, which is really kind of one population. The TELOMERE investigators, by the way, recently decided to defer the start of that study based on some regulatory commentary related to how the 3 investigational agents in that protocol imetelstat, venetoclax and azacitidine would be dosed initially and then further dose-adjusted, so we're going to -- they're going to wait for the data from the front line -- or from the single-agent imetelstat data, and then we'll pick up the cudgel again for TELOMERE. And we have a couple of other things that are ongoing, which I probably don't have time to talk about. We've got some Geron-sponsored work being done at MD Anderson in lymphoid malignancies. We hope to have some further information on that at the end of the year. And we also have this very intriguing ruxolitinib combination study, which is based on some beautiful preclinical data with imetelstat that shows we need to pretreat with rux and then treat with imetelstat, you get some really exciting synergies pre-clinically. So we have a full plate right now.

Great. Well, Chip, it sounds like you have a very interesting 2023 ahead. Unfortunately, we're almost out of time. So I'd like to thank you and the rest of the Geron team for checking out here to New York. I really appreciate it, and thank you to the investors.

It was our pleasure and thank you very much. Real pleasure. Thank you.

Thank you.