Geron Corporation (GERN) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you for joining us for the latest session of the day 1 of Baird's Annual Global Healthcare Conference. To finish out today, I'm really pleased to have with us Geron and CEO, Chip Scarlett. Chip, thanks for joining us today.

Thanks very much for asking us.

Great. So to begin, could you provide us an overview of Geron?

I can. And I have just a couple of things to say first. First of all, as usual, we will be the only company at this conference to actually read it in FLS. So we'll just go ahead and do that. During the course of this fireside chat, I may be making forward-looking statements regarding future events, performance, plans, expectations and other projections regarding our business is further identified in our corporate investor presentation and SEC filings. Actual events or results could differ materially from these statements as addressed in the risk factors included in our SEC filings. Geron undertakes no duty or obligation to update our forward-looking statements to reflect future information, except as required by law. And before I start on the overview of Geron, I'd just like to say that this is a red letter day. As you may have seen the public news that our much beloved and longtime CFO, Olivia Bloom, sitting down here, after 30 years at Geron, is retiring. It's a well-deserved retirement for sure. And so I'm normally not of a mind to bring alcohol to a fireside chat. But Olivia, this one is for you. So thank you for many, many years of wonderful service. So yes, quickly, Geron. So Geron was founded 30 years ago because Olivia was there at the very beginning, founded on the scientific hypothesis that inhibiting telomerase with kill malignant cells in a variety of different types of tumors. And Geron is the only company to successfully develop a telomerase inhibitor. And that makes us poised today to become a highly differentiated standard of care and lower-risk MDS and potentially in relapsed and refractory MF. The novel mechanism of action of this drug also has led to strong clinical and molecular evidence for potential disease modification. Now the efficacy in the IMerge Phase III trial, which read out right at the beginning of this year, was a Phase III trial in lower-risk MDS and it showed unprecedented durability of transfusion independence lasting up to a year in some patients. The breadth of transfusion independence was also quite unprecedented. It was across all the major MDS subgroups, including our RS-positive, RS-negative high transfusion burden. And it was also the first lower-risk MDS study to show improvement in patient reported fatigue, which is actually quite important in this disease for these patients. Based on experience with about 600 patients or more, actually greater than 600 patients, a very well-defined safety profile has emerged, which is characterized by limited clinical consequences from manageable, on-target cytopenias. The NDA for the treatment of transfusion-dependent anemia in patients with lower-risk MDS was accepted for review last month and the PDUFA target action date is June 16, 2024. Finally, in addition to lower risk MDS, Geron's also running the first and only JAK relapsed and refractory MF Phase III study, which has OS as a primary endpoint. We think that these -- both of these markets, low-risk MDS and JAK refractory MF are ripe for innovation and expect that there's a total addressable market in excess of $7 billion, about split about 50-50 between the 2 indications. And finally, today, we're fortunate to have the financial resources as well as a rather experienced team to bring the value of Imetelstat's patients and hopefully, to create meaningful value for our shareholders.

Terrific. So it provides a great jumping off point for various aspects of the company to dive into further. I guess before we get into that, It'd probably be a remiss not to address the news of the week, which was a CFO transition. Can you tell us more about that and the implications for Geron?

Well, we've already announced Olivia's replacement. It's Michelle Robertson. She was previously at Editas before that momentum, before that, Baxalta. And before Baxalta, had a long stint with one of the original biotech companies that is a progenerate for all of us, which was, of course, Genzyme. And she has a lot of experience with commercial stage companies as well as earlier stage companies. The Board and I have great confidence that Michelle will be a tremendous addition to the company and will bring a lot of expertise as we transition the company to becoming a commercial stage company. Olivia will truly retire. She's available for Board. I'll be her agent here. She's already on a couple of boards and has become a very highly sought after Audit Committee Chair as well as Board member, and I think she will have a wonderful biotech life going forward.

Terrific. So let's jump into the pipeline more, beginning with MDS. Over the summer, the results from the Phase III IMerge trial of Imetelstat for lower risk MDS were presented ASCO and EHA. What has feedback from physicians been like since then?

Yes. So we have conducted a lot of market research using both that data and also the data of our competitors fully explicitive about the -- both the efficacy and safety profile of the drug, and we've done that market research with both community and academic hematologists in both the U.S. and the EU. And kind of a high-level summary would be that the key attributes of Imetelstat's clinical benefits that resonated really strongly with those physicians was very -- first and foremost, a very meaningful rise in hemoglobin with the patients who were treated with Imetelstat, who were anemic to begin with. They started with hemoglobins in the 7.8 range, median and went up dramatically, more than 3 grams per deciliter. Second of all, unprecedented durability of response, which I mentioned before. So a full panoply of responses at 24 weeks across all the subgroups as well, statistically and clinically meaningfully different than the control arm. And of course, we did have some patients who had a 1-year TI, which is completely unprecedented. And the third was the predictable AE profile of manageable cytopenias. Now that the feedback from these hematologists also confirmed opportunity across the RS subgroups, both RS-positive and negative as well as interestingly in high-transfusion burden patients where not all of the competitors are very strong. So I think this makes us ultimately likely to be or at least it's the perception of the physicians we spoke with, strongly preferred treatment choice across RS-negative, 75% of the EPO relapsed and refractory patient population and a significant differentiation in high transfusion burden patients.

Great. So it seems like there's various aspects of the profile that once physicians see it and even see in comparison with luspatercept that leaves them with a favorable view of Imetelstat. And that kind of matches my discussions that I've had with the physicians as well. That said, I'm curious for your view on how physician awareness of Imetelstat is?

So I think it's really growing. Obviously, amongst the KOL group who routinely go to all of the meetings that the rest of us go to and that we have presented many, many, many times that, I think there's quite good awareness and recall. It's surprising to me, but that's also now penetrating deeply into the community. -- hematology -- hematologist. They also go to those meetings. There's also, I suspect a bit of word of mouth around it. They're always on the lookout for new and exciting products. Now of course, we're not able to promote anything. We don't have an approved product, much less a label. So I think that where this will all come out over -- between now and the PDUFA date will probably -- there will be a robust publication strategy of prior work. And I will say that we have completed filling in our medaffairs group within the company and also we would expect to have field teams filled in, all focused on Congress presence and disease education. So I think that will drive physician awareness substantially over the next 6, 9 months.

Great. So last month, FDA expanded the label of luspatercept to first line. Also at that time, they added RS-negative patients to the label? What are the implications of the label change for luspatercept for Imetelstat?

Well, first of all, I think we've always assumed and represented to the investment community that we assumed a broad frontline label would come. I don't think this broad approval has changed the value proposition for Imetelstat at all. Again, market research strongly suggests that Imetelstat will be used as and will likely become a standard of care in second-line MDS, that will be for both luspatercept and EPO experienced patients. That's very clear, at least from the perceptual work that we've done and sequencing with market research. That's also, by the way, if anybody wants to see that in more detail, that is incorporated in our corporate deck that is up on our website. I recommend that people interested in that take a look. I think Imetelstat also has a reasonable chance of becoming standard of care in frontline ESA ineligible patients. These are patients with high endogenous EPO levels usually greater than 500. And those patients historically have not responded well to EPO, and they weren't even studied in the COMMANDS study. So that's a frontline set of patients, but they arrive on the scene with being really ineligible for EPO and they're really not covered by the label. So I think that's a big reasonable unmet need, and I think we'll probably see some uptick there.

So also in more recent news, FDA accepted the NDA for Imetelstat from MDS, although granted a standard review, and I think there was some mix expectation from investors, whether it could be standard or priority review. Could you help put the context of a standard review out there for us?

Well, as I've explained to a lot of investors that we've spoken with both here at this conference and before, at least to those of us on the outside, the criteria or how divisions make the decision, whether you actually granted standard or priority views, honestly, a little opaque, and I'm not going to try to represent it because I don't really know how they made the decision in this case. What I can say though is that, this is clearly not a referendum on the merits of a drug, whether you get a standard or priority review. We asked one of our banking -- some of our banking colleagues to do a little review of all of the drugs that had in -- all of the oncology drugs that had been granted either standard or priority review and what were the outcomes and I can say the outcomes were not heavily weighted towards drugs that got priority review. There -- in that particular survey, it looks like standard review was equally -- equally good outcomes. So again, I don't think we see it as a referendum. And I think we continue to expect a first half of 2024 launch for the drug.

Great. Maybe staying on the topic of MDS, what's the status of the Expanded Access Program?

Yes. So the expanded access program is really a patient program, right? It's not a commercial program guys. It's a patient program where you offer access to a still unapproved drug, and you do that in the context of what amounts to, by any other words of clinical trial. So it's not -- it's structured like the clinical trial, patients still have to meet certain pretty strict criteria for participating in it. FDA has to approve it like a clinical trial, you run it like a clinical trial. And so I think that it's a great thing to do for patients, but that was -- it's really about patients. And so from that perspective, we don't really particularly plan on planning many updates to where the EAP is. It's available. You'll see it on ClinicalTrials.gov. And if you know of a hematologist who's interested, they know how to get in touch with.

Sounds good. Could you provide context on how U.S. payers think about the value of Imetelstat and also if there's any drugs on the market that could help frame how they're thinking about pricing?

The competitive intensity in low-risk MDS is actually pretty modest, right? I mean you think about it, HMA has been around for years, pre -- relatively challenging AE profile. Plenty of concerns about using them in lower-risk MDS patients too early because most hematologists want to reserve them for if patients become high-risk patients or AML patients, et cetera. Similarly, Revlimid was never approved in anything other than del 5q population, which is pretty small. And so I think you're really down to luspatercept, which we now have, I would say, most of the profile pretty well figured out, limits on how well patients do durability of response, et cetera. So I think that when you -- but no matter what the merits of each of those, that's not a very intense competitive profile compared to myeloma, where I don't know what is it there's, 5 or 7 drugs approved, where there's a really well-established pecking order and where price sometimes gets taken into account in that regard. So I do think that we will -- the whole field at the moment is flying a little bit under some of the radar of some of the payers. And with regard to analog for pricing, I think luspatercept is a very good analog for potential Imetelstat price.

Great. And I guess maybe on that point, it seems that Imetelstat could be used, in some cases, after luspatercept or is frontline depending on ESA responsiveness. But I mean oftentimes, second-line agents are priced at a premium given the need at that point. And any context if that's also might be a thought process that applies to luspatercept?

We haven't quite started to have the market access conversations with people. And so I think even if we had we'll probably need to wait a, this drug going to get approved; b, what would the label look like and; c, what will the pricing look like? I think all of that will come in due time.

Makes sense. And maybe another question kind of related to if the drug gets approved is, could you help us think through how big is the addressable market?

Yes. We've been pretty forthright about that. We've said that the total addressable market for low-risk MDS is on the order of -- it's on the order of $3.5 billion a year. Now that's a classic -- forgive me for saying it, but that's a classic TAM that most investors kind of think of. I think we've thought of it in terms of including the front line, you say ineligible patients, includes both RS-negative and RS-positive patients, includes a certain proportion of patients being treated for up to 12 months a year. And it includes pricing that is luspatercept analog pricing for the -- for both the EU and also the U.S. So I think altogether, that adds up to about $3.5 billion a year in total addressable market.

Great. What's the status of manufacturing currently and commercial supply?

Well, I guess we feel pretty comfortable. We've been working with key elements of our supply chain for over a decade. That includes both the API manufacturers and also even some of our fill and finish drug product manufacturers. We have strong relationships with those vendors and especially those who have specific expertise in oligonucleotide manufacturing. There aren't that many of them out there. And so we've obviously been there. And I can say that we've already produced commercial supply for the first year of launch. So I feel pretty comfortable with the supply chain right now.

Great. And also related to commercialization, how big of a sales force could be helpful for Imetelstat for MDS? And what's the timing between now and ramping up to that for a launch next year?

I think we've always talked around about 50 -- somewhere around 50% sales force for the U.S. We've always talked about that hiring for that sales force being stage gated to about 4 months, beginning about 4 months before the PDUFA date. So I guess that would calculate out in the first quarter of next year. I know we've had a very strong response when we've gone out and started pre-running some of that and talking to individuals that many of us know and it looks like a really strong class will come in -- we've got -- already have over 20 people in the commercial organization hired and includes, as I said before, full medical affairs build out already. We've got market access folks who are starting to really develop all the programs necessary there. 3PL is getting there. We will be fully ready to launch this product, assuming it's approved.

Very good. So maybe let's jump to myelofibrosis. Another Phase III indication. What's the status of the impact on that clinical trial?

So I guess I'd remind everybody that Interestingly, myelofibrosis was actually the first indication in the myeloid hema malignancies that we started developing the drug for. We had some of our first really exciting data coming out in MF that was published in September of 2015 in the New England Journal. We also had some data in another indication that was published back-to-back with that in essential thrombocythemia. But as it turns out, of course, you end up having to treat patients with myelofibrosis pretty intensively and longer. And ironically, just as it came to be and there are more low-risk MDS patients in MF patients, we actually ended up completing the Phase III in low-risk MDS earlier, and we got started earlier. So now we do have the first and only Phase III study, which in this case is in JAKi relapsed and refractory MF patients. And it's the first and only study in that patient population with an overall survival endpoint. And that overall survival endpoint was we got the courage to go after that when we looked at the Phase II data, which was uncontrolled, but which showed a median overall survival when the data was mature of about 30 months in these patients. And historically, the patients who have failed or have been withdrawn from JAK inhibitors in intermediate to a high-risk MDS, have about a 14- to 16-month overall survival. And then we also did a really interesting real-world data study, which was conducted by some of our colleagues at the Moffitt. They had a cohort of patients who had been withdrawn from JAK inhibitors, failed JAK inhibitors for the most part. And they were able to match those patients on a very specific level with the patients who are in our Phase II. And that showed again a 12-month, in this case, overall survival, beating overall survival for the patients who receive best available therapy versus patients who have received Imetelstat. So that gave us the confidence again to go forward. So right now, the MF -- so right now, the MF study is that we announced recently that it was over 40% enrolled and that we expect now based on -- mostly on enrollment, but recognizing also that there is another variable that we're not looking at. It's a little too close to the data in a controlled clinical trial, but that includes the death rates and how death rates are going. But the best estimates we have today are that the interim analysis, which will be triggered when 35% of the expected enrollees have experienced death. We expect that will happen in the first half of '25. And the final analysis will be when 50% of the patients in the study have died, and that's we expected in the second half of '26. So that's kind of where we stand today, and it's just grinding through a big study. It's over 320 patients. It's a very, very large study for this field.

Yes. And great to hear about the enrollment progress leading up to the interim that you mentioned is expected around first half 2025. For the interim analysis, could you walk us through kind of the details on what is what a -- kind of what the decision is?

I think it's kind of -- I mean, obviously, you look at everything, right? But it's a very, very dense study. But at the end of the day, it's probably one of the simplest analyses that you could possibly do. It's the hazard ratio of survival in the 2 treatment arms. And if it's statistically significant, you win. And if it's not statistically significant, the study has failed. So it's a pretty straightforward outcome. And then there's, of course, all manner of -- in what patients did it succeed and obviously benefit risk and so on. But an OS study is the ultimate clinical study to be done. It's just that they're so bloody hard to do because they take a long time and they take a lot of patience. So...

Got it. So the interim analysis is looking at a threshold, if it surpassed the study could staff for efficacy.

Yes. So there is a complex -- sorry, I didn't quite answer your question, Joel. There is a complex series of protocol design, statistical analyses that you go through where you assign a certain alpha spend in our case point at [ 025 ], and then you do the calculation. If it is positive under those circumstances, then we would file for -- we would file an sNDA based on that. If it's not positive, but the DMSc suggests that we should continue to run the study and they, of course, look at it on an unblinded basis through the course of the study, then we would proceed to the final analysis in which we would do the 50% and that would be triggered by 50% of the patients having died, and then we would do again a very specific protocol-determined statistical analysis.

Got it. So yes, that makes a lot of sense. And let's hope it's successful. I have in mind to kind of get something you're saying. Is there also some type of either prespecified or just kind of more vague futility analysis, whether is there some potential for the trial to be stopped and due to futility at that point?

Yes. We haven't been very specific about it. But at the end of the day, I think you always have -- I think you always have an expectation that if you -- the DMSc is going to look at it and make their own determination whether they believe it is appropriate to continue on, and they look at a specified interval at that.

Great. So I guess, next, could you describe Geron's cash runway?

That's pretty straightforward. At the end of June of this year, we had a little over $400 million on the balance sheet. And I think we've said publicly that, that's expected to support our projected level of operations through the end of '25. So we're in pretty good shape.

And to close, anything we didn't ask about or any closing remarks?

I'd like to thank Baird for the support over the years. I'd like to thank you, Joel, since you've come on board. I think we feel appropriately optimistic going into the -- towards the end of the review coming next year and look forward to hosting a glass of wine or other substances of that type in mid next year.

Great. Thanks, Chip.

Thank you very much for your time. Thanks, everybody.