Geron Corporation (GERN) Earnings Call Transcript & Summary

Great. Well, thank you so much. We've got -- for everyone who's joining us both here and on the webcast, we've got the team from Geron here, Chip Scarlett, CEO. So maybe let's just start with an overview.

Yes, love to. Thanks a lot for inviting us. I'm glad to be here and look forward to the next 45 minutes or so. Well, first of all, I think -- let me give a thumbnail sketch of the company for people who don't know us. Geron is focused on telomerase inhibition as a novel approach to the treatment of heme malignancies. Telomerase itself is an enzyme that's constitutively upregulated in malignant hematopoietic stem and progenitor cells. These are the cells that are really responsible for these diseases. And both of our Phase III programs in lower-risk MDS and relapsed and refractory MF currently have kind of an interesting and relatively low competitive intensity and very high unmet needs for new innovative therapies. So since the top line results for the lower-risk MDS Phase III study were reported earlier this year, and more recently, since we had quite a few presentations at both ASCO and EHA, over the last week or so, we've really had additional data all year long that's come out that's strongly supportive of the very compelling picture of overall clinical benefit that I think we're seeing. So as a result, we have a great lineup of kind of coming attractions. NDA submission this month in lower-risk MDS, acceptance of the NDA presumably 2 months after submission and assignment of a PDUFA date that will tell us whether we have a standard or priority review. Strong presence at ASH is anticipated in December of this year. NDA approval, we're guiding to the first half of 2024, again, based on what type of review we get. A launch shortly thereafter, minor little thing just to launch. A planned interim analysis of our IMpactMF Phase III overall survival study in relapsed/refractory MF as early as 2024. A planned interim analysis -- sorry, that was the interim analysis of that. And then possibly some readouts or at least early readouts from our life cycle management program, it could kind of be sprinkled throughout the next couple of years. They would include the IMpress high-risk MDS AML study that just had the first patient dosed, Dr. Platzbecker is running on behalf of a large consortium, and also the improved study of imetelstat plus ruxolitinib in first-line MF. So that's kind of where -- maybe that's a good thumbnail sketch in some upcoming events.

Let's talk for a second. You've been at this for a minute in terms of the telomerase inhibitor. Let's talk about the profile of imetelstat and what you had to overcome to bring that kind of agent into the clinic and then successfully through Phase III studies.

Yes, it's a great question. Thanks. And I can't take much credit for it because even though I've been with the company for 11 years, the drug was really set in place before I got here. The company was actually formed on the basis of the exciting telomere biology 20-plus years ago that eventually resulted in a Nobel Prize in 2009 for Liz Blackburn and Carol Greider and Jack Szostak. And what that really showed were a couple of key points that biology that made it a really attractive drug target. Number one, telomerase itself is required for these highly proliferative neoplasms in general. And certainly, heme malignancies come under that category, they're like little furnaces in the bone marrow. Telomerase is really required to maintain the telomere length. That's what it does. That's what the enzyme does, which normally attrits every time with a cell divides. So these are massively proliferative neoplasms and so it's constitutively the enzymes constitutively upregulated in virtually all cancers and certainly the ones we're interested in. Second of all, if you inhibit that with -- if you inhibit telomerase, then you would expect those neoplasms to eventually undergo apoptosis and death. So that's the concept. And what had to be done was had to figure out, first of all, a lot of the intricacies of that. When the company started, a lot of that was sort of known in big broad brush strokes, but not at a highly detailed level. The company actually cloned the gene for hTERT way back when, worked very closely with those individuals mentioned and many others who were at the forefront of telomere biology and eventually came up with a bespoke oligonucleotide that was targeted to the RNA template that's uniquely sits in the pocket of this protein enzyme. And of course, that's where the DNA comes down, and the RNA is complementary to the telomere DNA, and that's kind of where the ribosomes sit and do their thing and add base pairs, which is how the enzyme works. And so Geron decided, and I think presently so to actually target that RNA template. And that's what imetelstat is. Imetelstat is an oligonucleotide, 13-mer oligonucleotide completely made inside Geron. And then in order to get the molecule into the nucleus, scientists at Geron added a palmitoyl lipid tail to help it dissolve through into the nucleus. We think, at least, I like to think that, that was a happy circumstance because, of course, one of the more lipophilic parts of the body is the bone marrow. And so we know that this drug gets into the bone marrow, and that's probably one of the reasons it's so effective in some of these bone marrow cancers.

Great. That brings us to, you had some Phase III data earlier this year. Maybe we'll just start with what did you show in January?

Now there were a couple of big takeaways from that. First of all, we reported really unprecedented continuous transfusion independence lasting up to a year in patients who are relapsed and refractory to ESAs, so second-line patients. We showed that very importantly across multiple patient subtypes. So it included the now famous both RS+ and RS patients. It included high and very high transfusion burden patients. We showed that those durable periods of transfusion independent were complemented again in pretty much an unprecedented way by rises in serum hemoglobin up to 3 -- up by 3.5 grams per deciliter. Most of the other agents, if they have actually been able to show that consistently all or sort of half of that. So it's a really terrific efficacy profile that I think is very ideally suited to low-risk MDS. And then we also, of course, saw that the side effect profile, which has gotten some attention was actually quite tolerable. The most common AEs for sure reported are laboratory abnormalities in the cytogenetics, right -- sorry, laboratory abnormalities in the cytopenias. But those laboratory abnormalities, which definitely achieve grade 3, grade 4 are short-lived. They generally resolved grade 2 or higher after a couple of weeks. They are very manageable. There's -- we have built into these protocols and will have in the clinical utility of the drug, the ability to do dose holds and dose modifications in order to keep patients on the drug because it's very effective. And most of all, these cytopenias are not associated with meaningful clinical outcomes that are highly deleterious. In fact, the rates of bleeding and infections were very similar in -- the TLR data were very similar between the imetelstat in the placebo arm. So I think when you put that all together, you have a really compelling picture of clinical benefit that probably suggests that we're going to do very well as a commercial agent.

Yes. You just had a number of presentations at both ASCO and EHA, and I understand you were also there in attendance. So could you tell us a little bit more about what you showed at those meetings? And give us a sense for the feedback as you reboot on the ground there.

Yes, we've been at this a long time, and it's pretty exciting. I certainly thought it was exciting. So what did we actually show? A couple of key things. We showed with an additional 3 months of follow-up after our top line results, we were able to confirm an even higher 1-year rate of transfusion independence, never seen that with any other agent. We also showed that if you get a 24-week TI, again, not really shown by other agents, you have an over 60% likelihood going on to a 1-year TI. So we're seeing really meaningful transfusion independence that is really a hallmark of what people want to see. Transfusions are very bad for these patients. They get iron overload, lots of problems with and organ damage. And that's a key goal of therapy in lower-risk MDS. We also, of course, also confirmed, again, we showed for the first time the 24-week TI showed good data across all the subtypes that we had also shown with the 8-week TI. And then we had what I would call additional pioneering data that of course, really excites the academic community and actually surprising number of people in the community and the community hematologists dealing with potential disease modification. And that comes back to the mechanism of action of this drug, right? So these -- all of these patients have malignant hematopoietic stem and progenitor cell clones, that's kind of the source of the disease, they become mutated. And they throw -- they are the source of the disease and what you really want to do ideally is to suppress their proliferation, eradicate them, do whatever. So we've been showing this crescendoing data for the last several years. And we've shown it actually not only in lower-risk MDS, but also in MF. But let's talk about lower-risk MDS. And the way we've shown that is, first of all, a lot of these patients have cytogenic bone marrow abnormalities. We showed a cytogenetic bone marrow response rate. I think the most interesting data is for genes commonly mutated in MDS, SF3B1, TET2, DNMT3A. We saw a greater reduction in the variant allele frequencies or VAFs, which are correlated with clinical outcomes. So remember, all the cells that are daughter cells from these malignant clones carry these gene signatures that make them, if you will, biomarkers. They're a lot more than that. They're functional. But they also are biomarkers so you can identify and say, oh, 50% of the cells that are circulating this poor patient's bloodstream actually come from the malignant clone. Well, if that goes down, way down or even all the way to 0, that strongly suggests that you've sufficiently -- that you've significantly suppress the proliferation of that malignant clone. And that's what we showed. But what we've been able to show, Corinne, which is, I think, pretty unique in the field are these reductions in VAFs are actually correlated with clinical endpoints of higher rates of transfusion independence, longer duration of transfusion independence and higher increase in serum hemoglobin levels. So there's a clear statistical correlation there. And if I might, I'd like to quote Valeria Santini, a wonderful Italian hematologist who made this presentation. And at the end, how she said it, I wrote it down. She said, "Look, these data suggest that imetelstat may potentially alter the underlying biology of lower-risk MDS and can potentially modify the disease by reducing or eliminating the malignant clone and improving ineffective or malignant ineffective hematopoiesis." I think that kind of said it all. And then the last point I want to make that we showed was for the first time, we showed patient-reported outcomes data, which showed a lower proportion of imetelstat-treated patients experienced deterioration in fatigue, a really key PRO in lower-risk MDS and a higher proportion of imetelstat-treated patients showed a sustained improvement. And again, there was a positive correlation between improved fatigue in those patients who achieved 24 week -- 8- or 24-week TIs and HIE responses. So I think the meaningfulness of that -- well, you know what, I'll stop there and let you ask.

No. I mean maybe that's a great segue to like physician feedback. Tell us what you were hearing while you're at ASCO and EHA.

Yes. So if we stay with the PRO data for a second, I think that we saw a lot of enthusiasm about that, first time it's been seen. Other drugs actually are associated with deterioration in fatigue, which have been noted in some of the regulatory documentation as those drugs went through the approval process. So I think these data that we showed with improvement in fatigue provide a really competitive counterpoint to the other treatment options out there. And I think that bodes well for a couple of things. I think it bodes well certainly in the EU for reimbursement. I hope it bodes well for reimbursement in the U.S. as well, I think it will. And I think the directional alignment between improvement in fatigue and improvement in transfusion-related endpoints, we've really talked a lot about, will certainly not hurt us at the FDA. So that was a common strain of conversation we had with physicians. I would say the KOLs were all over that, right? But even some of the community physicians we talked to were there. The second feedback that we've had at these -- both ASCO and EHA were a lot of commentary about sequencing coming up in the competitive space, sequencing of drugs. And I think that there is a -- it's very clear what hematologists want. They want long periods of transfusion independence, they want major increases in hemoglobin, and they want the idea of all of that being consistent with restoration of normal hematopoiesis. And so where I think we end up is that the take-home message is that, first and foremost, most patients in their lower-risk MDS treatment journey are going to see both luspatercept and imetelstat. And I think that's important to appreciate and understand, different horses for different courses. I don't know where luspatercept will end up in the front line from a label perspective, and I'm not particularly interested in making a commentary about that. But I do know that when we've gone out post COMMANDS readout, when we've gone out and talked to people in the community, when we've talked to people at these meetings, I think you get the strong sense that we will get very, very -- we will be very well -- imetelstat will be very well -- is very well represented in the preferences for RS- patients, whether -- and certainly in the second line for sure. I think imetelstat will see treatment once patients have -- whether patients have been treated in the frontline with ESAs or whether they've been treated in the frontline with luspatercept in RS+, which I anticipate will be the case. I think we see again we will receive those patients. They will come down to us. And the interesting thing that KOLs pointed out, both at our Investor Day yesterday and also in the -- in our conversations with them and from the podium in particular at ASCO is the recognition that there's a small but important set of patients who are not really set up very well for either ESAs or luspatercept. Those are patients with very high serum endogenous EPO levels, greater than 500. So they weren't even studied. They're not indicated for in -- with EPO, that EPO don't work. We've already got plenty of people on board. And then they weren't even studying in the COMMANDS study. So those patients have been singled out as a potential for imetelstat because we had pretty decent results there. And there's no reason that you wouldn't think that the MOA wouldn't work quite well. So maybe that's a summary of what we heard.

Yes, absolutely. That brings us to your filing and NDA, you said in the next couple of weeks. First of all, like maybe just step us through what do you anticipate from a regulatory process perspective as it relates to both the potential for an advisory committee meeting as well as like the length of the review period?

Absolutely. Well, I don't know what to say about priority versus standard review, luspatercept kind of standard review. And they had a priority review for beta-thal, but that was their first indication, they had a standard review cycle time for lower-risk MDS. I find some of those decisions. I've been, believe it or not, in this business for 40 years. I find over the years, some of those decisions have been a little bit idiosyncratic. So I've quick predicting. We're ready for either. We will be ready for either. The second, on the adcom. So look, you have a first-in-class drug. You have a first-in-class drug, first time telomerase inhibitor has ever come before a regulatory agency. We know that it has the profile it has. We talked about cytopenias. We talked about the benefits, clearly advisory committees are really designed to adjudicate or at least offer potential adjudication for a benefit risk. I think we have a very compelling benefit risk story. And I can tell you we do not fear an adcom, whether we'll get one or not, again, a little idiosyncratic. But we will be ready for one, trust me.

Right. So I guess being ready for what means you kind of have a sense for where they might want to push. What are some of the topics you would expect to come up at such a meeting? And what are your responses?

Well, I think that the efficacy results for this drug in Phase III with all of the things we've talked about, have been really pretty darn stellar. So I don't anticipate a lot of pushback on the nuances there. I think it's a very tightly conducted Phase III study. I think it followed the Phase II. The Phase II is supportive to the Phase III. It all kind of looks great there. So I think if there's an adcom, it will probably focus on what's the clinical outcomes of cytopenias. Because let's be really clear, first and foremost, why do we see these cytopenias? They're probably part of the mechanism of action. They're on target cytopenias. We will make that point. Now I'll come back about that in a second. But it's not like these are toxicity effects. It's not like you're poisoning the bone marrow. What we believe from the picture that we have using VAFs, using all of the tools at our disposal to look at kind of what's going on in the bone marrow of these patients, you have to think that these patients likely have a situation where they have normal hematopoiesis going on from normal clones and then clones that have acquired these mutations and that those are the source of the disease. We know that we have differential effects on that. We preferentially, if you will, imetelstat kills the abnormal clones because they're proliferating at such great rates and have a constitutively upregulated telomerase. And so when you remove a whole chunk of hematopoiesis even if it's malignantly derived, you're going to see falls in platelets, white counts, even red cells. But we see this rapid restoration of it, and we see that mostly affecting the first couple of cycles. And so I think we're going to be able to paint a very compelling picture that that's part of the activity of the drug that you're seeing and that as time goes on and with appropriate dose modifications, if needed, we can keep people on for a long time and give them all these incredible durable responses that is what everybody is looking for, including patients. So that's why I say we're not fearful about this, but there's some education to do probably.

Yes. I mean regardless of these outcomes, it seems likely that you'll have a launch on your hand next year. As you think about preparing for that, first, could you just give us a sense for the infrastructure involved? And like how do you think about the size of the sales force, et cetera?

Sure. Well, we started preparing for a potential launch about 4 years ago when we hired Anil Kapur who is an extraordinarily experienced, I would say, commercial executive from many companies. We knew him at J&J very, very well. And we hired him as our Head of Corporate Strategy, but also as our Chief Commercial Officer. So we made a very early hire in anticipation of positive results. And he has done a fabulous job of building out already, building out the team that's building out the infrastructure. So without going through every function, we've hired about 20 people in the last, I'd say, the last 6 months, 6 to 8 months, who cover all of the key needs for having a successful U.S. commercial organization, sales, marketing, market access, payer, reimbursement, 3PL, supply chain, we've got a full complement of MSL. They report to our medical group, of course, but a full complement of medical science liaisons, clinical educators. So we're really staffed up already in those areas. What we haven't done, and we sized the sales force very -- using very industry-standard metrics, we'll require about 50 sales reps, and we have not hired any sales reps yet. We'll hire them, we'd like to hire them about 4 months before the PDUFA date. And so once we have the PDUFA date in a little while, then we'll probably go about and getting ready to hire them and so forth.

How you think about the -- you mentioned reimbursement of price points?

Oh, I think there's a really good analog here in luspatercept. And it's a very healthy reimbursement. And I think that, that's a good analog for anybody out there trying to think about it today. I have no idea exactly where we'll end. Could we end up a little bit higher than that? Possibly. We have some benefits, et cetera. But that's not the important thing right now. I think that puts us in a category that means that we'll have very healthy sales. So yes, I'd use luspatercept as an analog.

Yes. I mean, so speaking of luspatercept as an analog, Bristol has outlined a potentially $3 billion peak sales opportunity and that includes frontline, right? So how do you think about imetelstat as compared to luspatercept with respect to the kind of peak sales opportunity?

Well, let me, first of all, denominate this in sort of total market opportunity, total accessible market opportunity, the so-called TAM that everybody loves to talk about at this stage of the game. Eventually, we'll be reporting EPS, so it will [indiscernible]. But for now, I mean, I think we see a TAM of around $3.6 billion or so in this market. And that includes the 3 big market segments, right? And I've already kind of talked about them. RS+ patients who comprise in the U.S. in the big 5, somewhere around 8,000 patients. RS-, which of course, as we all know, is quite a bit larger, and we'll probably dominate in that segment, that's around 24,000 patients. And then this smaller 4,000-patient segment for the high serum EPO patients. If you put all of that together, that's how -- and you use $25,000 a year as a notional price in the U.S. So it's all the way down to $6,000 -- sorry, $25,000 per month, $6,000 per month in the EU that kind of calculates out to that $3.5 billion. Most people would say that you should expect, and I would say most of our analysts, I think including you guys see over $1 billion in peak sales. I think we feel very comfortable with that, but we're not making sales projections right now. That's why we kind of keep it back to the TAM.

Yes, understood. So as you think about just like potential for expansion within lower-risk MDS, any thoughts around additional studies you'd want to run to continue to build around the label you're likely to get next year?

I think we want to see what the label actually is. But there are active discussions in the company starting up now about additional studies in lower-risk MDS, but I think you have to stay tuned for that. They're not mature yet.

Understood. How about ex U.S.? You talked a little bit about Europe just now, but how are you thinking about what the appropriate strategy is?

I think there are a couple of different strategies that you see companies our size adopt. Some have adopted an internal sales force usually quite small because you're really going to -- you're going to do distributorships for everybody other than the Big 5, right? I mean it makes no economic sense to not do that. So then within the big 5, I mean, I must say, we've got terrific representation of KOLs and investigators from those big 5 countries. Lower-risk MDS is actually kind of a specialty of hematologists in that part of the world. And they've done a lot of pioneering work there. I think that we're just a little early to be -- we don't have to make this decision because if you think about it, MAA will go in by the end of this year. So I assume we've got a little bit of leeway in that. Assume that it's a 10 to 12 -- or sorry, a 12- to 14-month cycle time for most MAAs. And then that's just the start of it. Now you got to go after reimbursement, right? You can't really sell into these markets. You usually go to Germany first. So I -- we really don't have to make up our mind right now, and I think we'd like to keep our options open for the moment.

That makes sense. So composition of matter expires in 2025, you'll likely get orphan drug exclusivity. How should we think about the patent portfolio kind of beyond those 2 items? And are you doing anything to strengthen?

Yes. Well, I'm not going to talk about strengthening and I'm not going to talk about pending patents and so on. That's usually very proprietary information. We have 2 issued patents in all the relevant geographies, composition of matter and then methods, a very extensive method-of-use patent. In fact, some analysts and many investors have actually hired people to go out and pore over that method-of-use patent. We feel pretty good about it. I think the strategy that has evolved, Corinne, is sort of a default strategy would be rely on orphan drug to cover the composition of matter, to cover the exclusivity that we want in the U.S. So 7 years after, that takes you mid-31 presumably. You get 10 years of data and marketing exclusivity in the EU anyway. So you almost don't have to worry about it, that takes you out quite far. The method-of-use claims will expire in mid- to late 2033. And so then the variable is how do you play the patent term extension? A number of people have commented that there's a very viable strategy where you apply PTE to the method-of-use claim and that extends that 5 years, about 5 years longer. Again, you don't have to make that decision today. You actually go through a rather involved process of getting the -- both the FDA and the Patent Trademark Office to PTO to tell you how long you have -- we have to make that decision about a couple of years, probably, and we will make it, and we'll take into account everything that's going on up until that point. But I do think that strategy of applying PTE to method-of-use claim is a perfectly reasonable default to think about.

Okay. That's helpful. Indication expansion, you obviously are running a serum of myelofibrosis. You were talking about a couple of others. You announced one this week. So maybe just give us a sense, a flavor for the additional indications you're looking at.

The relapsed/refractory MF, the JAK relapsed and refractory MF space is actually where we started with all this. We did a very extensive and long Phase II. We had terrific data. We did a real-world data studies that use synthetic control arms to try to really predict the outcome because what we saw very, very stunningly was a strong uncontrolled survival benefit in the Phase II compared to historical data and compared to that synthetic control arm in the real-world data study that was done by Rami and his colleagues at Moffitt. And so we embarked on the Phase III study that we have running right now, which uses overall survival. First study as far as I know in MF that uses overall survival as the primary endpoint. Obviously, that is a triple home run if that hits and we currently project an interim analysis, a planned interim analysis in 2024. The size of that market is certainly equivalent to the size of the lower-risk MDS market. The competitive intensity is mostly in the frontline, and this is for JAK relapsed and refractory patients, which almost everybody becomes relapsed and refractory from JAKs. So again, I think it's a super cool, a very viable second-line alternative strategy, which will -- if we -- if the study hits and we get approved in that space, it will be a great commercial outcome, very, very strong.

Great. In terms of -- I guess, we'll see the interim readout next year. And so in terms of just like number of patients powering, what should we look for from that data point?

Yes. Well, it's hard to predict exactly when that bloody readout will occur because you've got 2 competing issues. You've got the enrollment status and you've also got the death rate. And they're really hard and it's a controlled study. What we -- what I would say is that the BAT arm, it's important for everybody to understand, does not include JAK inhibitors. So this is against other standards of care for people who've failed JAK inhibitors. I think we have pretty high confidence that, that will work out. And that's part of the calculus for whenever that interim analysis actually occurs. That's part of the calculus that we think will propel that study to a positive outcome.

Okay. Great. And maybe with our final minute here, cash runway, where do you stand? And are you prepared for the launch?

We are. We had over $400 million in the bank at the last report. That will take us to the third quarter of 2025. That covers the launch, that covers the MF study continuing during that time period. And I think we feel very fortunate to have done a raise, a couple of raises in difficult times and look forward to utilizing those results productively.

Wonderful. Well, thanks so much for joining us this morning. Thanks to everyone here.

Thank you very much. It was a great fun talking with you. Thank you.

Absolutely.