Geron Corporation

ladies and gentlemen this is the operator today's conference call will begin in two minutes until that time your lines will again be placed on hold thank you for your patience again ladies and gentlemen this is the operator today's conference call will begin in two minutes until that time your lines will again be placed on hold thank you for your patience THE END THE END

Ladies and gentlemen, thank you for standing by and welcome to the Q2 2021 Duron Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would like to turn the conference over to your host, Ms. Olivia Bloom. Please go ahead.

All right, thank you very much, Grace. And good afternoon, everyone. Welcome to this conference call to discuss updates on our ongoing Immatelstat Phase III clinical trials, as well as second quarter financial results. I am joined today by Dr. John Scarlett, Geron's Chairman and Chief Executive Officer, Dr. Alexander Rizzo, Geron's Executive Vice President and Chief Medical Officer, and Anil Kapoor, Geron's Executive Vice President of Corporate Strategy and Chief Commercial Officer. After the market closed today, we announced updates on our Emerge Phase III clinical trials and financial results for our second quarter via press release, which is available on our website. In addition, an archive of this webcast will be available on our website for 30 days, including the slides being presented today. Before we begin, please note that during the course of this presentation and question and answer session, we will make 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 Immatel-STAT, anticipated clinical and commercial events and related timelines, the sufficiency of Geron's financial resources, and other statements that are not historical fact. Actual events or results could differ materially. We refer you to the discussions under the heading Risk Factors in Jerome's quarterly report on Form 10-Q for the quarter ended June 30, 2021, which contains and identifies important factors that could cause actual results to differ materially from those contained in the forward-looking statement. We undertake no duty or obligation to update our forward-looking statement. And now, I will turn the call over to Dr. Scarlett. Chip?

Thanks, Olivia, and good afternoon, everyone. I'm very happy to say we've made a lot of progress since last quarter, particularly with regard to our ongoing eMERGE Phase III trial and lower-risk MDS. First, in that trial, we've reached 91 percent of the planned enrollment. We currently expect to complete enrollment in the fourth quarter of this year. In addition, we've accelerated the timing of top-line results in eMERGE Phase III by three months. We've done this by shortening the follow-up period after the last patient's been enrolled from 15 months to 12 months for the primary analysis. As a result, we now expect top-line results in the first quarter of 2023. And finally, we expect that our current and projected financial resources will be sufficient to get us to those top-line results. Olivia will expand on this in her section of the call today. Alexander, our chief medical officer, will comment on the progress we've made in both of our ongoing phase three trials. And finally, Anil, our executive vice president of corporate strategy and chief commercial officer, will discuss the market opportunity in lower risk MDS. So let's get started.

Thanks, Chip. The increase in operating expenses for the second quarter and year-to-date periods of 2021 compared to the same periods in 2020 was primarily driven by higher development expenses. This increase in R&D expenses includes higher clinical development costs associated with our two ongoing Phase III clinical trials, higher personnel-related costs for additional headcount, as well as the conduct of long lead time manufacturing and quality activities, such as manufacturing validation batches of IMIT-ELSTAT. The increase in general and administrative expenses for the second quarter and year-to-date periods of 2021 compared to the same period in 2020, primarily reflects new costs in connection with pre-commercial activities, including modernizing the internal infrastructure to support a commercial launch and higher legal costs. Previously, we provided guidance that our financial resources were sufficient to fund our operations through the end of 2022. As of June 30, 2021, we had $239.1 million in cash, cash equivalents, and marketable securities. We now project these financial resources, combined with expected future non-dilutive funding from the second tranche under our current debt facility, will fund our operations through the end of the first quarter of 2023, by which time top-line results from Emerge Phase 3 are expected. With that, I will now turn the call over to Alexandra, who will review the progress in our Phase III clinical trials. Alexandra?

Thank you, Olivia, and good afternoon, everyone. Let me start with two important updates related to our eMERGE Phase III clinical trial, for which I'm so pleased that we are nearing completion of enrollment. As Chip commented in his introduction, we have achieved 91% of the planned enrollment as of last week, and we now expect to complete enrollment in the fourth quarter of 2021. Moving on to another important update about this study. We have determined that the clinical cutoff date for the primary analysis could occur three months earlier by shortening the follow-up period from 15 months to 12 months after the last patient has been enrolled. This change is due to the significantly longer enrollment period caused by the COVID-19 pandemic, which has allowed enrolled patients on the study to have longer follow-up than initially planned. In shortening the follow-up period we estimate that the overall median follow-up in the Phase III trial will be similar to the overall median follow-up in the Phase II trial, which, as you might remember, was 24 months. Thus, even with the shorter follow-up, we continue to expect to have mature data set that will allow us to assess the safety and efficacy of Fimotelstat, including durability of transfusion independence. Furthermore, since we've already enrolled more than 90% of the patients, we believe the impact of this change on our efficacy results will be minimal, if at all. Accordingly, we submitted a protocol amendment to the FDA and have not received any comments on the proposed change. We plan to distribute the final protocol amendment to all clinical sites shortly. With a revised 12-month follow-up period for the primary analysis, we now project that the top-line results for eMERGE Phase III will be available in the first quarter of 2023. Also, in July, a regularly scheduled meeting of the Independent Data Monitoring Committee for this study occurred, and the committee recommended the trial continue without modification. In conclusion, we are making good progress with this study, and I look forward to our announcement when we achieve full enrollment of the trial. Turning to IMPACT-MS, our second ongoing phase three trial. The focus for this trial has been on opening sites, which as you know, is one of the key factors for patient enrollment. As of last week, 55 sites were open for enrollment, We plan to engage over 180 sites in 30 countries across North, South America, Europe, Australia, and Asia. We continue to expect the interim analysis to occur in 2024 and the final analysis in 2025. Just as a reminder, the number of events required to conduct the interim analysis for this study could occur before the enrollment is complete as these events will accrue throughout the enrollment period. With that, I'll turn the call over to Anil. Anil?

Thanks, Alex, and good afternoon, everyone. In my prepared remarks today, I'll provide our perspective regarding two topics, unmet needs and the market dynamics in low-risk MDS, that we believe make for an exciting commercial potential for ImitalStack. Lower risk MDS, as many of you know, represents approximately 70% of the total MDS patient population. This is an attractive market with a large addressable patient opportunity. There is a significant unmet need for new therapeutics in this setting, as patients are typically elderly, present with chronic anemia, are dependent on frequent red blood cell transfusions, have poor quality of life, heightened risk of transformation to acute myeloid leukemia, and shortened survival. If you look, here we have a schematic of the low-risk MDS landscape. You will see that keratopoiesis-stimulating agents, or ESAs, are the mainstay of treatment for the approximately 90% of patients who have symptomatic anemia and do not have deletion 5Q. Not all patients respond to or are eligible for ESAs, and among responders, responses typically last for between 18 and 24 months. Treatment options are limited for patients who have failed ESAs or are ineligible for ESAs and may include hypomethylating agents or HMAs and as of recently, Lusparacept. Wanted to also quickly note that HMAs are not a preferred option given their limited benefits. Also, they are not broadly approved across the EU for this indication. Lusparacept was recently approved in 2020 for ESA failed ring sideroblast positive patients. This RS positive segment covers only approximately 25% of patients, leaving a significant unmet need for effective therapies for the remaining approximately 75% of lower risk MDS patients who are RS negative. The expected broad imital start opportunities is shown by the orange dotted line on this slide. Moving on to Imitelstat's expected target product profile, in our recent market surveys, community and academic hematologists reaffirmed the unmet needs in lower-risk MDS and highlighted how the strengths of Imitelstat can address those needs. Key aspects of Imitelstat's profile that resonated most strongly with these hematologists are shown on this slide. In particular, I would like to point out that the hematologists appreciated having the ability to treat RS-negative patients where there is no approved treatment. In addition, they pointed to the durability of transfusion independence. The 24-week and the one-year red blood cell transfusion independence data from the iMERGE Phase II trial resonated particularly well with physicians as they felt these outcomes to be more clinically relevant than eight-week transfusion independence. In Europe, both regulators and peers have requested to see 24-week TI data as well. In addition, the potential for disease modification was also very well-received. We expect to achieve broad-level coverage for imital stack in ESA relapsed refractory non-deletion 5q low-risk MDS that includes not only both RS positive and RS negative patients, but also first-line patients who are ESA ineligible. This sets up Imitelstat well for reimbursement across the broader population. Therefore, we expect a highly differentiated position for Imitelstat at launch as well as the ability to significantly penetrate this attractive market, eventually becoming part of the standard of care in lower-risk MDS. This next slide describes the potential market segmentation in more depth. We expect imital stat patients to come from four main groups, all of whom are eligible to be enrolled in our ongoing iMERGE Phase 3 trials. The first group and our key focus is the ESA relapsed and refractory RF negative patients. This is the largest opportunity of about 22,000 addressable patients in the US and the five largest European markets. These patients currently do not have effective approved therapy available to them. If iMERGE phase three is positive, We expect ImitalSpat will become the standard of care in this segment. The second group is the ESA relapse and refractory RS positive patients. This group has an addressable patient opportunity of approximately 7,000 patients in the US and the five largest European markets. Note also that this is where Lusparasept is currently approved. We expect ImitalSpat Imital stat to compete favorably with Luspatacept in this setting, especially in patients with higher waistline transfusion burdens, such as greater than four units per eight weeks, which is more than 50% of the population in this segment, according to our analysis. The third group is drawn from the first-line lower-risk MDS patients with high endogenous serum EPO levels greater than 500 milliunits per ml who are ineligible for ESAs. This group has an addressable patient opportunity of approximately 3,700 patients in the US and the five largest European markets. Finally, the fourth group of patients for Imetelstat will come from those who have been previously treated with Lisparacept. The ultimate size of this segment is yet to be determined, and we expect it to grow over time. Just to also point out, as many of you may know, both Lospatacept and ESAs stimulate production of the normal red blood cell via the EPO receptor, although at different points in the red blood life cycle. Based on the fact that we have encouraging data in patients who have failed ESAs We expect that ImitalStat will likely be effective in Luspatacept treated patients. As a reminder, these patients are eligible to be enrolled in our iMERGE phase three trial. Based on our current commercial assumptions and assuming regulatory and fair access to the four patient populations I just described, we expect ImitalStat to exceed $1.2 billion in potential peak revenue across the US and the five largest European markets in lower risk MBS. Lastly, as shown on this slide, I would like to provide a brief update on our commercialization efforts. With top line results expected in the first quarter 2023 and assuming priority review, we could potentially launch in the US market in the first half of 2024. As an early preparation for launch, we recently hired senior, highly experienced industry professionals to lead our medical affairs and market access functions. With this team, we will be refining our value proposition across all stakeholders, building a deep understanding of the customer base, and executing on our medical affair plans to ensure a comprehensive understanding of the potential for Imitelstat within the lower risk MDS treatment community. As we do this, we are applying a stage-gated, milestone-driven investment mindset, which will result in the bulk of our commercial investments coming after top line results are available. We believe Imitelstat has the qualities that's strongly differentiated from other drugs currently being marketed or in development today for lower-risk MDS. And we are excited about the progress we are making to bring this potentially transformational product to the market. With that, I will now hand over the call to Chip. Chip?

Thanks very much, Anil. When I turned the call over to Olivia, I said we had a lot to cover today. Now you can see one of the reasons I said that. And Neil just commented that Imatelstat is a potentially transformative product. I'd like to add that with Imatelstat, we expect to transform Geron into a dynamic commercial company over the next several years and to become a leader in the treatment of hematologic malignancies by modifying the course of these diseases in order to improve and extend the lives of patients. As we conclude our call today, shown on this slide, we'd like you to know that we plan to host a virtual event for investors and analysts in November when management and key opinion leaders will discuss several broad topics. The first is Imatel-STAT's potential for disease modification in lower-risk MDS and refractory MF. The next is our expected path to commercializing Imatel-STAT. Third is an expansion of Imatelstat's development plans, including new studies and additional indications. And the fourth will at least briefly cover our early discovery program in second generation telomerase inhibitors. So please look for further details about this event that will probably come in October of this year. So that operator, let's please open the call to questions.

Absolutely. Ladies and gentlemen, if you have a question at this time, please press the number one key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Your first question comes from the line of Charles Duncan from Cantor Fitzgerald. Your line is open.

Yes. Good afternoon, John and team. Thanks for taking our questions, and congratulations on the enrollment progress in iMerge. So I had just a couple of questions, and Alexander, I guess, kind of alluded to this, but with regard to the primary analysis, Chip, and FDA response, I think she said no comment from FDA. So you take that as agreement from them, that the analysis you've done to allow for a shorter follow-up is copacetic with them? Go ahead, Alex.

Sure. So we submitted a protocol amendment to the FDA over 30 days ago. And we have not received any comments on the proposed change. As you know, this is kind of a regular procedure. If you don't hear from the agency within 30 days, you go ahead and issue the protocol amendment and move forward. So we are at that stage. The 30 days have passed and no comments received. So we're moving ahead.

Okay, very good. And then with regard to the enrollment thus far, yeah, nearly complete. Again, congrats. Any geographic concentration or any color that you can provide on the enrollment pattern relative to the criteria?

I don't think so. I don't think there's any geographic pattern here. You know, we've put so much time and effort in all of the enrollment boosting activities. You know, we also believe that the rollout of the vaccines, especially for the elderly patients that are enrolled in our trials, has helped. So, you know, with that, the enrollment has really picked up very well. But no, to go back to your question, I don't think there's any pattern there.

Okay. And then regarding the blinded efficacy or blinded interim look, the IDMC look in July, Was there any criteria for trial, you know, I guess changes, any efficacy criteria or anything else that really could have come out of that meeting besides safety?

Right. So all we hear from the IDMC, you know, per all of the documents, per the charters, is whether the study should continue with or without modifications. So just like last time, you know, this time they said continue without, you know, without modifications. So that's as much as we know.

Okay, last question is, and I'll probably have to wait until November to get the answer to this, but when you contemplate commercialization of Imatel STAT across the globe, do you think that you'll end up working with a partner for XUS? I mean, what is your preferred strategy there?

Chas, yeah, we're actually deep in consideration of that question, doing a lot of analyses, a lot of background work, a lot of work specifically with regard to the drug and the markets. And so I think today we're not ready to make that, you know, have that comment on it, but that is our, that's kind of our plan, and stay tuned, as they say.

Okay. Thanks for taking my questions. Congrats on the progress. Thanks so much.

Thanks, Sam. Thank you. And your next question comes from the line of Justin Walsh from the Riley Securities. Your line is open.

Hi, thanks for taking the questions. I'm sure we'll hear more details in November, but maybe provide some color on why now is a good time to expand Imatel Stats development plans and how the second generation telomerase inhibitors are expected to fit into the Geron story.

I'll let Alex take the first part, and I'll take the second part. So additional development plans, anyone just comment about that?

I think that at this point, Justin, we are certainly considering to expand in areas where we have a good preclinical data. We believe in our data. We believe in strong data. And it's always a good time to expand into additional indications if you have good data.

Yeah, I think I'd add to that, Justin. If you look back at it, a consistent theme that we've had for quite some time has been the exploration of the effect of imitelstat on the molecular basis of disease, and in particular on malignant stem and progenitor cells. And I think we've put together an amazing study you know, cascade of data that's really strongly supported that what's going on is that we're selectively targeting and killing malignant stem and progenitor cells in the marrow. And these are, you know, these are the cells and the clones that are responsible for the disease. So when we see in both of our big phase two programs really good evidence that there is significant, you know, and selective killing of these malignant stem and progenitor cells, and ultimately the marrow repopulates with more normal cells. I think that really encourages us to look at additional indications in heme malignancies. This is kind of what's really needed, right? And so now that we've got both of these phase three studies up running, one almost completed in terms of enrollment. I think it's the right time to look at other opportunities. And, of course, as Alexander says, we have preclinical data, non-clinical data, some of which is public, some of which is not yet public, that really encourage us. So stay tuned for November. I think we're excited to tell you about some of this.

Got it. And how about the second-generation inhibitors? How do those fit in?

Well, I think it's a fair statement to say that Imatelstat is really a first-generation telomerase inhibitor. It's the only one that we're really aware of that is in the clinic today and has advanced this far. There are a lot of things we would love to do that you can imagine that would incorporate an even more attractive profile. And I think we won't get into that today. I want to save a little bit of the powder for November. But we decided some time ago that it was really the right time to go off and begin the early stages of a medicinal chemistry effort to identify other scaffolds that would be potentially attractive. And we'll go into that in a little more detail. Obviously, a lot of it remains proprietary, but we did want people to know that we're not just sitting back with Imatelstat as our only idea towards telomerase inhibition. We think that the data really strongly supports going forward in multiple different areas and having a new drug, new indication, our new IP, new everything would be very potentially attractive.

Got it. Well, I'm looking forward to hearing more in November. Next question. So what, if anything, do you guys think that the recent acquisition of Constellation could tell us about the deal appetite and continued interest in the MS space?

Well, whenever you see one of your colleagues who is involved in similar areas that you are get acquired and at a very nice premium, I don't think that it makes any of us – feel anything but good, right? I mean, that's just a shareholder, a broad shareholder perspective, and one that I'd be hard for anybody to argue against. I think that it's an interesting deal. We won't go into how we view various elements of the deal itself. But I will say that it was a healthy price. It was still a relatively early price. asset and I just say more opportunities will come the way for patients to get better therapy as more resources are put into any of these drugs. So good for them and good for the business and most of all good for patients.

Got it. Now, last question from me. Now that we have patients enrolling in IMPACT-MS, do you have a sense if most of these patients have seen treatment with the dratinib as well as ruxolitinib and how that could possibly affect any read-through from Embark?

So I can take that question. I think that at the moment, I mean, it's a randomized study. It's meant for registration, and we're really not looking into the data, patient disposition, or anything like that. So I think it's very early for us to give a comment on that, Justin.

Yeah, I would agree. I would make a separate comment. Our perception is that fidratinib does not have a huge uptake in the market, but that's really not for us to make comments about. And as Alex said, this is a big blinded study and hands-off.

And not blinded, but it's randomized and phased re-registration. So it should not be looking at any of that.

Exactly. Got it. Sounds good. Thanks for taking the questions. Thank you.

And your next question comes from the line, Steven from . Your line is open.

Yeah. Good afternoon. Thanks for taking the questions. And congrats on the enrollment progress. I was wondering, so I know that you're speaking to, I guess, this subgroup of potentially frontline patients that are ESA ineligible. And I know that they were, I think, a fractional component of the phase two patient population. I'm not sure if we've ever seen activity or clinical data broken out as a function of that. ESA eligibility or ineligibility. But just wondering if you've had any regulatory conversations around your ability to procure a label that would be in this subgroup based upon the Phase 3 iMerge data, specifically in the context of the distribution of ESA.