2013-03-12 21:32:51 -
MENLO PARK, Calif., March 12, 2013 - Geron Corporation (Nasdaq: GERN) today
reported financial results for the fourth quarter and year ended December
31, 2012.
Fourth Quarter 2012 Results
Net loss for the fourth quarter of 2012 was $15.9 million, or $0.12 per share,
compared to $31.9 million, or $0.25 per share, for the comparable 2011 period.
Net loss for the fourth quarter of 2012 and 2011 included restructuring charges
of $2.7 million and $5.4 million related to the discontinuation of the company's
GRN1005 and stem cell programs, respectively. Net loss for the fourth quarter of
2011 also included non-cash debt extinguishment charges of $1.7 million
resulting from the repayment of the loan to the California Institute for
Regenerative Medicine. The company ended 2012 with $96.3 million in cash and
investments.
In the
fourth quarter of 2012, the company had revenues of $689,000, compared to
$251,000 for the comparable 2011 period. Revenues in both periods primarily
reflected license fees and royalties.
Interest and other income for the fourth quarter of 2012 was $2.6 million,
compared to $204,000 for the comparable 2011 period. In December 2012, the
company received $2.5 million in other income in connection with the assignment
of certain intellectual property related to the company's telomerase activation
technology.
In the fourth quarter of 2012, the company had operating expenses of $19.2
million, compared to $30.7 million for the comparable 2011 period. Research and
development expenses for the fourth quarter of 2012 were $11.8 million, compared
to $19.7 million for the comparable 2011 period. The decrease in research and
development expenses primarily was due to reduced scientific supply costs and
personnel-related costs as a result of the discontinuation of the company's stem
cell programs and reduced costs for the manufacturing of imetelstat drug product
resulting from the timing of manufacturing campaigns. General and administrative
expenses for the fourth quarter of 2012 were $4.7 million, compared to $5.5
million for the comparable 2011 period. The decrease primarily was due to lower
non-cash stock-based compensation expense.
Non-cash operating expenses for the fourth quarter of 2012 were approximately
$2.7 million, which primarily included stock-based compensation, write-downs of
excess lab equipment related to the GRN1005 program and expense for stock issued
for services. Non-cash operating expenses for the fourth quarter of 2011 were
approximately $6.0 million, which primarily included stock-based compensation,
write-downs of excess lab equipment related to the company's stem cell programs
and expense for stock issued for services.
Year-End 2012 Results
For 2012, net loss was $68.9 million, or $0.54 per share, which included
restructuring charges of $2.7 million, compared to $96.9 million, or $0.78 per
share, for 2011, which included restructuring charges of $5.4 million and non-
cash debt extinguishment charges of $1.7 million.
Revenues for 2012 and 2011 were $2.7 million and $2.4 million, respectively,
reflecting funding under a collaborative agreement and license fees and
royalties.
For 2012, interest and other income was $3.1 million, which included the receipt
of $2.5 million for the assignment of the company's telomerase activation
technology. Interest and other income was $1.0 million for 2011.
For 2012, the company had operating expenses of $74.5 million, compared to $98.6
million for 2011. Research and development expenses for 2012 were $51.4 million,
compared to $69.3 million for 2011. Overall, research and development expenses
decreased in 2012 as a net result of reduced scientific supply costs and
personnel-related costs due to the discontinuation of the company's stem cell
programs and reduced costs for the manufacturing of imetelstat drug product
resulting from the timing of manufacturing campaigns, partially offset by higher
costs for the company's GRN1005 program. General and administrative expenses for
2012 were $20.4 million, compared to $23.8 million for 2011. The decrease was
primarily the net result of lower non-cash stock-based compensation expense,
partially offset by increased legal and consulting costs associated with the
company's intellectual property portfolio and the divestiture of the company's
stem cell programs.
Non-cash operating expenses for 2012 were approximately $9.1 million, which
primarily included stock-based compensation, depreciation, write-downs of excess
lab equipment related to the GRN1005 program and expense for stock issued for
services. Non-cash operating expenses for 2011 were approximately $25.2 million,
which primarily included stock-based compensation, depreciation, write-downs of
excess lab equipment related to the company's stem cell programs and expense for
stock issued for services.
Company Events
Clinical Development
* In December 2012, Geron reported positive clinical results from the Phase 2
trial of imetelstat, the company's first-in-class telomerase inhibitor, in
patients with essential thrombocythemia (ET) who did not respond to or
tolerate other therapies. ET is a chronic blood disorder that is
representative of a group of diseases known as myeloproliferative neoplasms.
The data, which showed durable hematologic and molecular responses in
patients treated with imetelstat, suggest a relatively selective activity of
imetelstat against the malignant progenitors driving ET, and provide
evidence to support a potential disease-modifying effect. These findings
were presented in an oral session at the 54th Annual Meeting of the American
Society of Hematology in Atlanta, GA, by Prof. Dr. med. Gabriela M.
Baerlocher of the University Hospital and University of Bern, Switzerland,
and a principal investigator of the trial.
The Phase 2 trial of imetelstat in ET was designed to provide proof-of-
concept for the potential use of the drug as a treatment for hematologic
myeloid malignancies, including myelofibrosis, myelodysplastic syndromes and
acute myelogenous leukemias. Based on the results from the ET trial, Dr.
Ayalew Tefferi at the Mayo Clinic has begun an investigator-sponsored trial
(IST) to evaluate the safety and efficacy of imetelstat in patients with
myelofibrosis and determine the optimal dose and schedule for further
evaluation. Geron is in the initial planning stages of a company-sponsored
trial in myelofibrosis, which will be informed by data from the Mayo Clinic
IST, if positive. In addition, Geron intends to expand its directed program
of ISTs in 2013 to other hematologic myeloid indications, including acute
myelogenous leukemias and myelodysplastic syndromes.
* In September, the company reported an unplanned interim analysis of its
randomized Phase 2 trial in advanced non-small cell lung cancer (NSCLC)
evaluating imetelstat as maintenance treatment following platinum-based
induction chemotherapy compared to observation. The analysis suggested a
modest trend of efficacy in favor of the imetelstat arm. Subsequently, in
December, the company reported the analysis of a pre-specified sub-group of
NSCLC patients based on a retrospective measurement of tumor telomere
length. This analysis suggested that patients whose tumors had short
telomeres at baseline experienced an increase in progression-free survival
when treated with imetelstat in comparison to patients in the control arm.
The treatment effect was not observed in imetelstat-treated patients whose
tumors had medium-to-long telomeres. The company has been refining and
evaluating candidate assays to prospectively measure telomere length in
individual patient tumor samples. The company recently completed an updated
analysis that included a more mature follow-up of clinical data and a retest
of patient tumor samples using a refined, prospective assay to measure
telomere length. In this analysis, the magnitude of the treatment effect in
patients whose tumors had short telomeres was not reproduced. Geron is
evaluating the impact of this updated analysis on its plans for potential
development of imetelstat in solid tumors, including NSCLC. Data from
the NSCLC trial have been accepted for presentation at the American
Association for Cancer Research annual meeting to be held in April 2013.
Leadership Appointments
* Andrew J. Grethlein, Ph.D., was appointed as Executive Vice President,
Technical Operations, and as a member of the executive management team. Dr.
Grethlein is a senior executive with over 20 years of biotechnology industry
experience. Dr. Grethlein is overseeing the Company's manufacturing and
quality functions. Dr. Grethlein previously served in a similar capacity at
Inspiration Biopharmaceuticals and was the Portfolio Management Team Leader
for Hematology at Ipsen S.A.
* Craig C. Parker was appointed as Senior Vice President, Corporate
Development, and as a member of the executive management team. Mr. Parker
has over 25 years experience in the science and business of the
biotechnology industry, and was most recently Senior Vice President,
Strategy and Corporate Development at Human Genome Sciences, Inc., until its
sale to Glaxo SmithKline in 2012.
* Olivia Bloom, formerly Vice President, Finance, Chief Accounting Officer and
Treasurer, was appointed as Senior Vice President, Finance, Chief Financial
Officer and Treasurer.
* Susan M. Molineaux, Ph.D., and Daniel M. Bradbury were appointed to the
company's board of directors. Dr. Molineaux joined the board's nominating
and corporate governance committee, and Mr. Bradbury joined the board's
audit committee. Dr. Molineaux has more than 20 years of biotechnology
industry experience and is currently serving as President of Calithera
Biosciences, Inc., which she co-founded in June 2010. Dr. Molineaux also co-
founded Proteolix, Inc. where she was responsible for leading the
development of Proteolix's second generation proteasome inhibitor,
carfilzomib (now marketed as Kryprolis), for the treatment of multiple
myeloma, from discovery through completion of clinical trials for
accelerated approval, until the company's acquisition by Onyx
Pharmaceuticals, Inc. in November 2009. Mr. Bradbury has nearly 30 years of
pharmaceutical and biotechnology industry experience. Mr. Bradbury served as
Chief Executive Officer of Amylin Pharmaceuticals, Inc., until its
acquisition by Bristol-Myers Squibb Company for approximately $7 billion in
August 2012.
Stem Cell Divestiture
* In January 2013, Geron entered into an Asset Contribution Agreement with
BioTime, Inc. (BioTime) and BioTime's recently formed subsidiary, BioTime
Acquisition Corporation (BAC), that provides for the divestiture of Geron's
stem cell assets to BAC upon the closing of the transaction, which is
expected to occur no later than September 30, 2013.
Upon closing of the transaction, Geron will contribute to BAC its
intellectual property, cell lines and other assets related to Geron's
discontinued human embryonic stem cell programs, including the Phase 1
clinical trial in patients with acute spinal cord injury, as well as its
autologous cellular immunotherapy program. Geron will receive approximately
6.5 million shares of Series A Common Stock of BAC. Following the closing of
the transaction, Geron will distribute the Series A BAC Common Stock
received from BAC to Geron's stockholders on a pro rata basis (other than
with respect to fractional shares and stockholders in certain to-be-
determined excluded jurisdictions, which will instead receive cash on a pro
rata basis).
Conference Call
At 9:00 a.m. ET on March 13th, Geron's management will host a conference call to
discuss the company's fourth quarter and year end results.
Participants can access the conference call via telephone by dialing
866-270-6057 (U.S.); 617-213-8891 (international). The passcode is 80790305. A
live audio-only webcast is also available at
edge.media-
server.com/m/p/3328hz6w/lan/en. The audio webcast of the conference call will be
available for replay approximately one hour following the live broadcast through
April 12, 2013.
About Geron
Geron is a biopharmaceutical company developing first-in-class therapies for
cancer, including its telomerase inhibitor, imetelstat, in clinical development.
For more information about Geron, visit www.geron.com.
Use of Forward-Looking Statements
Except for the historical information contained herein, this press release
contains forward-looking statements made pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. Investors
are cautioned that statements in this press release regarding Geron's plans or
expectations for or of: (a) the reception of or dates to obtain or present data
or other results from any clinical trials, including the Mayo Clinic IST; (b)
clinical development plans or success of imetelstat, including imetelstat
possibly having applicability for the treatment of other progenitor cell-driven
hematologic malignancies, including myelofibrosis; (c) the future development of
imetelstat in solid tumors with short telomeres; and (d) the closing of the
BioTime/BAC transaction, 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: (a) regarding the reception of or
dates for the availability of data or other results - delays in enrollment,
delays caused by institutional review boards or regulatory agencies, shortage of
supply, dependence on clinical trial collaborators and safety issues; (b)
regarding clinical development plans or success of imetelstat, including
imetelstat possibly having applicability for the treatment of other progenitor
cell-driven hematologic malignancies, including myelofibrosis, positive safety
and efficacy data from the Mayo Clinic IST and other clinical trials, including
the ET clinical trial - those risks and uncertainties inherent in the
development of potential therapeutic products, including without limitation,
results from the ET trial may not mean that imetelstat has applicability for the
treatment of other progenitor cell-driven hematologic malignancies, including
myelofibrosis; technical and scientific challenges; limitations on freedom to
operate arising from intellectual property of others and the protection of
Geron's intellectual property rights; (c) regarding the future development of
imetelstat in solid tumors with short telomeres - clinical,
scientific, technical, and commercial challenges; limitations on freedom to
operate arising from intellectual property of others and the protection of
Geron's intellectual property rights; and (d) regarding the closing of the
BioTime/BAC transaction - the satisfaction of all the closing conditions in the
agreement. Additional information on the above risks and uncertainties (a)-(d)
and other risks, uncertainties and factors that could cause actual results to
differ materially from those in the forward-looking statements are contained in
Geron's periodic reports filed with the Securities and Exchange Commission under
the heading "Risk Factors," including Geron's quarterly report on Form 10-Q
for
the quarter ended September 30, 2012. Undue reliance should not be placed on
forward-looking statements, which speak only as of the date 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.
CONTACT:
Anna Krassowska, Ph.D.
Investor and Media Relations
650-473-7765
investor@geron.com
media@geron.com
Financial table follows.
GERON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
Three Months Ended Year Ended
December 31, December 31,
(In thousands, except 2012 2011 2012 2011
share and per share data)
Revenues from $ - $ - $ - $ 300
collaborative agreements
License fees and royalties 689 251 2,709 2,138
Total revenues 689 251 2,709 2,438
Operating expenses:
Research and development 11,800 19,672 51,368 69,316
Restructuring charges 2,702 5,449 2,702 5,449
General and administrative 4,671 5,538 20,397 23,789
Total operating expenses 19,173 30,659 74,467 98,554
Loss from operations (18,484) (30,408) (71,758) (96,116)
Unrealized gain on 23 73 13 643
derivatives, net
Interest and other income 2,616 204 3,097 1,024
Losses recognized under - - - (503)
equity method investment
Losses recognized from - (1,664) - (1,664)
debt extinguishment
Interest and other expense (18) (59) (233) (237)
Net loss $ (15,863) $ (31,854) $ (68,881) $ (96,853)
Basic and diluted net loss
per share:
Net loss per share $ (0.12) $ (0.25) $ (0.54) $ (0.78)
Shares used in computing 127,262,350 125,247,957 126,941,024 124,506,763
net loss per share
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
(In thousands) 2012 2011
Current assets:
Cash, cash equivalents and restricted cash $ 22,857 $ 16,898
Current marketable securities 73,472 105,208
Other current assets 2,088 3,519
Total current assets 98,417 125,625
Noncurrent marketable securities - 32,133
Property and equipment, net 974 1,241
Deposits and other assets 410 1,048
$ 99,801 $ 160,047
Current liabilities $ 14,148 $ 13,444
Stockholders' equity 85,653 146,603
$ 99,801 $ 160,047
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Source: Geron Corp. via Thomson Reuters ONE
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