GERN - NASDAQ

Good afternoon, everyone. Welcome to the Geron Corporation Second Quarter 2023 Earnings Conference Call. I am Aron Feingold, Geron's Vice President of Investor Relations and Corporate Communications. I'm joined today by several members of Geron's management team: Dr. John Scarlett, Chairman and Chief Executive Officer; Olivia Bloom, Executive Vice President and Chief Financial Officer; Dr. Faye Feller, Executive Vice President and Chief Medical Officer; Anil Kapur, Executive Vice President of Corporate Strategy and Chief Commercial Officer; Dr Andrew Grethlein, Executive Vice President and Chief Operating Officer. Before we begin, please note that, during the course of this presentation and question-and-answer session, we will be making forward-looking statements regarding future events, performance, plans, expectations and other projections including those relating to the therapeutic potential and potential regulatory approval of imetelstat, anticipated clinical and commercial events and related time lines, the sufficiency of Geron's financial resources and other statements that are not historical facts. Actual events or results could differ materially. Therefore, I refer you to the discussion under the heading Risk Factors in Geron's quarterly report on Form 10-Q for the quarter ended June 30, 2023, which identifies important factors that could cause actual results to differ materially from those contained in the forward-looking statements. Geron undertakes no duty or obligation to update our forward-looking statements. With that, I will turn the call over to Chip. Chip?

Thanks, Aaron. Good afternoon, everyone. Thanks for joining us today. Geron's most recent quarter was punctuated by important achievements, which support our evolution from a late stage clinical development company toward one with future substantial commercial capabilities. Foremost among these achievements was the submission in mid-June of a New Drug Application for imetelstat in lower risk MDS. This was the first NDA ever submitted for telomerase inhibitor and reflects our team's dedication, commitment and focus on groundbreaking and innovative drug development over many years. Other important milestones included presentations at both ASCO and EHA new data and analyses from the IMerge Phase 3 lower risk MDS trial. These data contributed to the evidence for compelling imetelstat efficacy profile, including durable continuous transfusion independence, as well as substantial increases in serum hemoglobin; broad responses across MDS subtypes, including ring sideroblast positive and negative patients, as well as in high transfusion burdened patients were also reported. Further, the presentations reflected strong evidence for potential disease modifying activity, as well as patient reported outcomes of improved fatigue in imetelstat treated patients. Faye will comment in more detail on these clinical data updates later on this call. Collectively, these data distinguish imetelstat from other treatments for patients with lower risk MDS that are available commercially, or that are in development today. Based on our market research, including perspectives gained from both academic and community hematologists, we believe the broad hematology community considers imetelstat an important potential treatment option for patients with lower risk MDS. Our market insights show that imetelstat is positioned to become a new standard of care in lower risk MDS, particularly for difficult to treat subgroups who have very limited options today. As a result, we believe the total addressable market in lower risk MDS for imetelstat is approximately $3.5 billion in 2033. In order to execute on that large of an opportunity, we're in a full court press to push forward our launch readiness and expect to be ready for a US commercial launch upon potential approval in early 2024. Anil will reprise the latest imetelstat market research in lower risk MDS and launch readiness update in more detail later on this call today. Another important element of Geron's value proposition is IMpactMF, our pivotal trial evaluating imetelstat in myelofibrosis patients who are relapsed or refractory to JAK inhibitors. This is the only Phase 3 clinical trial in myelofibrosis using overall survival as a primary endpoint. We believe a positive outcome could transform the treatment landscape for these MF patients who have limited treatment options and a dismal survival outlook. Faye will be providing further detail on enrollment in the IMpactMF trial later on the call. Based on our current planning assumptions for both enrollment and death rates in the trial, today, we're updating our guidance for the interim analysis to be expected in the first half of 2025 and for the final analysis to be expected in the first half of 2026. From a financial resource perspective, we have approximately $400 million on the balance sheet as of the second quarter close. This gives us the financial wherewithal to fund potential successful launch in lower risk MDS and also to support operations through the first year of launch. Olivia will comment during the call on the status of warrants exercises and our expectations regarding our cash runway based on these current financial resources. Before I turn this call over to Faye, I'm very pleased to announce today the appointment of Scott Samuels as Geron's new Chief Legal Officer, following Stephen Rosenfield retirement at the beginning of this month. Stephen has been the chief legal officer of Geron since shortly after I came to the company more than a decade ago. And both I and the board are deeply grateful for Stephen's partnership and contributions to Geron since then. I'm personally very pleased for Stephen that he'll now be able to enjoy his much deserved retirement. Prior to joining Geron as our new Executive Vice President, Chief Legal Officer and Corporate Secretary, Scott Samuels recently served as the General Counsel of BeiGene, where he built a large global, legal and compliance team, oversaw launches of three internally developed drug products in the US, Europe and China, developed a global healthcare compliance program, and led key strategic transactions with Amgen, Novartis and Celgene, which of course is now BMS. Prior to BeiGene, Scott was the assistant general counsel and then acting general counsel at area ARIAD he managed the company's legal affairs, including SEC compliance and corporate governance, and key licensing and distribution agreements prior to ARIAD's acquisition by Takeda. I believe Scott's experience, technical expertise and history of success in building legal and compliance organizations to meet the needs of a commercial company epitomizes what our current and our many new employees are focused on as we pursue the future evolution and growth of Geron. Both the board and I greatly look forward to working with Scott. With that, I'll turn the call over to Faye for a regulatory and clinical development update. Faye?

Thank you, Chip. And good afternoon to everyone on the call. As Chip mentioned, we are thrilled to have submitted our imetelstat new drug application in June 2023 for the treatment of transfusion dependent anemia in adult patients with low to intermediate-1 risk MDS who have failed to respond or have lost response to or ineligible for erythropoiesis-stimulating agent, or ESA. As permitted under imetelstat's fast track designation, we have requested that the FDA grant priority review of the NDA. We expect FDA will communicate potential acceptance of the NDA within 60 days of submission. That is sometime in mid-August and reveal the PDUFA date for such a review. Under a priority review scenario, we would expect potential NDA approval timing in the first quarter of next year. Under standard review, we would expect potential approval timing in the second quarter of 2024. To expand imetelstat's potential reach outside of the US, we remain on track to submit a marketing authorization application in the European Union for lower risk MDS in the fourth quarter of 2023. As we await potential commercialization in the US, we initiated an expanded access program, or EAP, in June 2023. This is a program that enables us to make imetelstat available to clinicians and patients prior to FDA approval. Treatment of low risk MDS patients in this program is based on a protocol approved by FDA, which requires each treating physician to apply for access for their patient. We have heard physicians in both academic and community settings express the need for new treatment options for their lower risk MDS patients, and we are pleased to be able to offer this expanded access program to the low risk MDS community. Patients treated with imetelstat in the expanded access program are expected to ultimately be transitioned to commercial supply within three months after a potential future FDA approval of the drug. As Chip described, at ASCO and EHA, we presented new data and analyses from IMerge. These data further differentiated imetelstat from existing treatments and support its role as a potential new standard of care in lower risk MDS. The content of these presentations were also reported on June 14 during the Geron hosted investor event. We encourage investors to access the archived webcast which is available on the investor portion of our website under Events. There you can hear hematologic malignancy key opinion leaders and IMerge investigators, Drs. Uwe Platzbecker and Rami Komrokji, present these data in detail. For the purposes of our call today, I will provide an overview of the key points of the imetelstat differentiation highlighted in our ASCO and EHA presentation. First, the clinically meaningful and durable transfusion independence, or TI, experienced by imetelstat treated patients in IMerge is unprecedented for patients with lower risk MDS. We observed a highly statistically significant improvement in TI rates in imetelstat treated patients for 8 week, 16 week and 24-week PIs compared with placebo. Even more exciting, with three months of additional follow up, nearly 20% of imetelstat treated patients experienced a one year TI, which represents approximately 60% of imetelstat 24 week responders. Additionally, hem malignancy KOLs at ASCO and EHA noted that statistically significant improvement of anemia with a median hemoglobin rise of 3.6 grams per deciliter for imetelstat treated eight-week TI responders as a very important point of differentiation. Second, a breadth of clinically meaningful responses was observed across key MDS subgroups, including difficult to treat populations, such as those without ring sideroblast, or RS negative patients, as well as high transfusion burden patients and those with high serum EPO levels. These patient populations have not been studied with most other agents used to treat the anemia of lower risk MDS nor have such results been seen with other treatments. At EHA, we presented important new subgroup analysis showing that the rate and durability of TI for 24-week TI responders is similar across key lower risk MDS subgroups, regardless of ring sideroblast status, prior transfusion burden, IPS at-risk category or baseline serum EPO levels. Third, we have presented robust evidence of imetelstat's potential to alter the underlying biology of lower risk MDS by reducing or eliminating malignant clones. In imetelstat treated patients, we saw a reduction in mutation burden, as measured by variant allele frequency, or VAF. Furthermore, new data on cytogenetic responses and reductions in bone marrow RSL supported imetelstat's mechanism of action. In totality, these data indicate that imetelstat may have disease modifying potential in patients with lower risk MDS. Fourth, data on patient reported outcomes presented at EHA were also very encouraging. These data describe a sustained meaningful improvement in fatigue for imetelstat treated patients versus placebo. This specific patient reported outcome is of particular importance because lower risk MDS patients experience fatigue that is not easily alleviated by red blood cell transfusions. Additionally, many of the current treatments for low risk MDS are associated with an increase in fatigue. Imetelstat is the first treatment we are aware of to show an improvement in patient reported fatigue in lower risk MDS patients. In IMerge Phase 3 and consistent with prior clinical experience, grade 3, 4 thrombocytopenias and neutropenias were the most frequently reported adverse events. Unlike several other treatments in hematologist's armamentarium, such as HMAs and lenalidomide, which may cause prolonged myelosuppression, severe cytopenias associated with imetelstat were short lived, resolving to grade two or lower in less than four weeks in most cases, and most importantly, only rarely resulted in severe clinical consequences, such as bleeding or infection. In total, the IMerge clinical data support a profile for imetelstat that, if approved, we believe will serve as a very impactful option for the treatment of transfusion dependent anemia in lower risk MDS patients. Next, I'd like to discuss IMpactMF, our second Phase 3 trial of imetelstat in patients with JAK inhibitor relapsed refractory myelofibrosis. Today, treatment of myelofibrosis is dominated by JAK inhibitors, or therapies with other mechanisms of action in combination with JAK inhibitors. The currently available therapies have been approved based on their ability to improve symptoms and reduce splenomegaly. Approximately 75% of patients discontinue JAK inhibitor after five years. And once they do so, they face a dismal overall survival of approximately 11 to 16 months. We believe that imetelstat could be transformational for these patients. In the EMBARK Phase 2 study in JAK inhibitor relapsed refractory MF patients, the overall survival in imetelstat treated patients was 30 months, or nearly double compared to historical controls. Additionally, a comparison of EMBARK Phase 2 data to real world data from a closely matched cohort of patients confirmed improvement in overall survival and lower risk of death for imetelstat-treated patients compared with patients treated with best available therapy. Importantly, in EMBARK, there was strong evidence of the disease modifying potential of imetelstat in relapsed/refractory MF, with improvements in bone marrow fibrosis and reduction in key MF driver mutations. And these reductions correlated to improved survival and other clinical outcomes. These data were the basis for the design and initiation of the IMpactMF Phase 3 study in JAK inhibitor relapsed refractory MS patients with overall survival as the primary endpoint. The IMpactMF protocol called for a planned interim analysis when approximately 35% of the planned enrolled patients have died. And the final analysis with over 50% of the planned enrolled patients have died. As an OS study, the timeline for the interim and final analyses depends not only on enrollment rate, but also on death rate. Today, based on achieving over 40% enrollment in IMpactMF and our planning assumptions for enrollment and death rates in the trial, we are updating our guidance for the interim analysis to be projected in the first half of 2025 and for the final analysis to be in the first half of 2026. Because these analyses are event driven and it is uncertain whether actual rates for enrollment and events will reflect current planning assumptions, the results may be available at different times than currently projected. As can be expected for studying an indication for which there are multiple ongoing trials, constraints on clinical site personnel resources due to the COVID-19 pandemic, and other competing trials in MF have led to some challenges in recruitment and enrollment. We are working closely with the MF community and our clinical trial sites on recruitment for the trial and continue to plan to announce when the trial is 50% enrolled. As Chip mentioned, this is the first and only myelofibrosis trial with overall survival as a primary endpoint. Our MF investigators remain very excited about this study, and the potential of a new treatment that could improve survival for these patients who currently have few treatment options and dismal survival rates. We are also pleased to report that the first patient was dosed this June in the investigator led Phase 2 IMpress trial that is evaluating imetelstat in patients with relapsed refractory acute myeloid leukemia or high risk MDS. This trial is based on preclinical publications that describe the role of telomerase in AML disease progression and which have reported that inhibiting telomerase in both mouse and human derived AML model targets and potentially depletes leukemic stem cells, thus impairing leukemic progression. Relapsed refractory AML and higher risk MDS are high unmet need areas. And we look forward to understanding more about the potential efficacy of imetelstat in this patient population. With that, let me turn the call over to Anil to provide a commercial update. Anil?

Thank you, Faye. And good afternoon, everyone. We are very pleased with the status of our commercial readiness activities and are on track to achieve launch readiness by early 2024. Faye has already described several significant efforts that support a potential imetelstat launch, including important regulatory progress, as well as unprecedented IMerge data presented at medical meetings, which deeply support imetelstat's value proposition messaging. In particular, the PRO data reporting improvement in fatigue with imetelstat is an important differentiator and will be a critical element for payer interactions. This quarter, we also advanced critical work by obtaining significant insights from our market research efforts based on the latest lower risk MDS data presented at ASCO and EHA by Geron and competitors. For a full review of this market research, we refer you to the investor event webcast that Faye mentioned earlier. For purposes of today's call, I will highlight key takeaways from that market research presentation. First, in alignment with informal feedback on the grounds at ASCO and EHA, our latest market research from practicing academic and community hematologists across US and key European markets confirmed that our IMerge Phase 3 data has been received favorably, particularly the compelling PI rates across subgroups, reduction in transfusion burden, hemoglobin rises, meaningful durability of response, balanced with a predictable adverse event profile with manageable cytopenias. Second, continued hematologist feedback supports the imetelstat opportunity across ESA, relapsed refractory, RS negative and RS positive subtypes, as well as high transfusion burden patients. Third, these hematologists indicated that imetelstat is likely to become a new standard of care in post ESA experienced and luspatercept-experienced frontline patients or second line lower risk MDS patients, as well as an important new option for frontline ESA ineligible patients who serum EPO level is greater than 500. All of these insights are instrumental to our understanding of imetelstat's potential place in the market and our engagement strategy with physicians. With that, I'll turn the call over to Olivia for a full financial update. Olivia?

Thanks, Anil. And thanks to everyone on the call for joining us today. Please refer to the press release we issued this afternoon, which is available on our website for detailed financial results. As expected, operating expenses were higher for the three and six months ended June 30, 2023 compared to the prior periods. The increase in R&D expenses for the three and six month periods of 2023 compared to the same period in 2022 primarily reflect higher clinical trial costs for increased activity for both Phase 3 trials and the Phase 1 trial in frontline MF, increased personnel related costs for additional headcount, higher consulting costs to support regulatory submissions, and greater imetelstat manufacturing costs in preparation for potential commercialization in the first half of 2024 in low risk MDS. The increase in general and administrative expenses for the three and six months ended June 30, 2023 compared to the same period in 2022 primarily reflect higher personnel related expenses for additional headcount and increased costs for new commercial preparatory activities. We continue to expect non-GAAP total operating expenses of up to $210 million for the full year of 2023. This financial guidance may be revised in the future upon notification from the FDA of the potential approval timing for imetelstat in low risk MDS. Turning to our financial resources. As of June 30, 2023, we had approximately $400.2 million in cash and marketable securities. This balance includes approximately $17.8 million in proceeds from warrant exercises that we received in the second quarter of 2023. In the first half of 2023, in total, we have received approximately $77.6 million in warrant proceeds, which leaves approximately $32 million in potential future war proceeds remaining to be exercised. Based on our current operating plans and our expectations regarding the timing of the submission and potential acceptance and approval of our NDA by the FDA for imetelstat in low risk MDS and the subsequent potential US commercial launch in the first half of 2024, as well as the revised guidance on timing of the interim and final analysis for IMpactMF, we believe that our existing financial resources and estimated revenues will be sufficient to fund our projected operating requirements through the end of the third quarter of 2025. If projected exercise proceeds of approximately $32 million from remaining outstanding warrants are added to our current financial resources and estimated revenues, then we believe such aggregated financial resources will be sufficient to fund our projected operating requirements through the end of 2025. With that, I will now hand the call back to Chip for closing remarks. Chip?

Thanks, Olivia. I'd like to close by reiterating what an exciting time this is for Geron, for imetelstat and for the MDS community. Based on our unprecedented Phase 3 data in low risk MDS and an outpouring of enthusiasm from the medical community, we believe that imetelstat could transform the standard of care in lower risk MDS. We're also very proud to be pioneering the first study in myelofibrosis with overall survival as a primary endpoint. We believe that a potentially disease modifying treatment that improves survival could be transformational for these patients who have failed JAK inhibitors and have limited other options. As a result, we'll stay the course with this Phase 3 trial, especially given its immense potential for value creation for patients and shareholders alike. Finally, we look forward to the expected momentum in the months to come as we continue to execute on our commercial readiness plan, and ultimately, to a potential US launch event of imetelstat in the first half of 2024. So, operator with that, let's open the call to Q&A.

[Operator Instructions]. And we do have our first person in the queue. Kalpit Patel, please go ahead.

Congrats on the NDA submission. So, maybe starting with one question for Anil. For low risk MDS, assuming that we get approval here in the near future, what early launch metrics do you believe will be important to showcase and highlight the initial stages of launch?

I think, for us, it's really important that we have full coverage across reimbursement policies for both academic and community center. That's really critical for a new drug at the time of launch. And it's our expectation that we are going to broadly inform the market and make sure that the policies reimbursement blocks, things that are really critical for new drugs get addressed well. We are also going to measure uptake across both academic and community channels for physicians and the type of patients that are on imetelstat. And since these will be early days, we will obviously continue to monitor for durability of response and questions that may come up around reimbursement and ensuring broadest possible access in the very early days of launch. And from a supply chain perspective, making sure that the drug to specialty distributors is going to patients properly. We also will have our patient hub activated. And so, this is to ensure seamless distribution of the drug and widest access for the patients. So those would be the first few things that we'll focus on.

For the IMpactMF study, just curious, is the enrollment rate being impacted because of any potential competition from other clinical studies? And can you maybe add additional clinical trial sites to streamline the enrollment there? Or is that not an option?

Despite the fact that these patients have a high unmet need for alternative JAK inhibitor therapies, there are indeed, as you mentioned, a number of other ongoing clinical trials in this space. And it's not so much the competition for patients necessarily for these trials, it's more the resources and the staffing. Given that myelofibrosis is an orphan and rare disease, there's limited research staff that can be devoted to studies. So I think that is part of the delay in enrollment. Regardless, we continue to believe in the study and the likelihood of a positive readout and the potential for the study to change the course of MF treatment.

One last question on the competitive landscape for myelofibrosis here. We're anticipating data for the combo from MorphoSys in the second half in frontline myelofibrosis. Assuming that this study hits its endpoint, does that in any sense impact your development strategy in myelofibrosis in [indiscernible]?

Sure. It doesn't change the current status of our Phase 3 study looking, which is looking at patients who have failed JAK inhibitor and are not eligible for JAK inhibitor. So patients, whether they were treated on a clinical trial or as part of standard of care in the community will still be eligible for the IMpactMF trial. And I think regardless of the readout for MorphoSys, it's still an unmet need for patients after they fail JAK inhibitor.

Our next question comes from the line of Robert Driscoll.

This is Sam on for Robert today. I'm just wondering how you might be able to address any doctor concerns or apprehension around the temporary cytopenias associated with imetelstat treatment ahead of commercialization or if there are any other potential gating factors to broad uptake that you're working to address.

Let me start first, Robert, and I'll ask Faye to jump in as well. So we have shared the full safety profile of our drugs with the imel study results with a broad set of physicians, both community, academic, across both US and key European markets. The feedback we have received multiple times over the last few years has been that the focus from physicians remains on the timing of cytopenias, the resolution data and most specifically on the clinical consequences, especially bleeding infections and hospitalizations. And they have also compared the imetelstat arm to the placebo arm in the trial. Overall, we see very similar conclusions for both academic and community doctors. And we expect that the AE profile, as per them, is not a barrier at the time of launch. All cite very extensive experiences with managing in key toxicities in this setting, especially given long term familiarity with HMAs. They also state that they will obviously manage their first patients as they build clinical experience with the drug more closely. So our expectation is, given the very high efficacy results, the clear mechanistic rationale for why these cytopenias occur, the fact they're predictable and the fact there are few clinical consequences, it should be really good. And it could be our medical affairs teams, our entire teams, and we will continue to focus on education and the linkage to the mechanism of action, so they have a clear understanding of what to expect for imetelstat patients and ensure success. Faye. if you would like to add anything clinically from your side.

I completely agree and echo with what Anil said, and the feedback that we hear really is from hematologists. They are comfortable at managing cytopenias and understanding them and knowing what measures to take in order to support their patients. Once we explain the timing, the reversibility and, most importantly, the lack of prolonged cytopenias and lack of severe infections or severe bleeding, once there's an understanding to that, it helps to allay any possible concerns. But mostly in the hands of hematologists, they feel quite comfortable managing these cytopenias. And also in the upcoming months, as Anil mentioned, we'll have training from our medical affairs team and also more insight into cytopenias in further presentations or complications.

One last one here, just kind of wondering if there are any key differences between the value proposition for imetelstat in the US versus the EU just based on the current treatment paradigms for each region?

Let me take that question, Robert, with EU first. As you can imagine, the most important thing in Europe is to establish broad based reimbursement. Each of the countries is very different. And what's really encouraging about imetelstat and low risk MDS is our efficacy datasets are all showing the data that payers have repeatedly asked for. This includes PRO data, it includes 24-week PR data, which they have insisted that they would really like to see. And that is very positive news for us because the durability of PR and PRO value proposition is very strong. So our goal there is to establish pricing in all the key markets in sequence, and I think we'll be favorably received within Europe. In US, again, the goal here is, we have a concentrated set of our position universe. And our aim here is to make sure that imetelstat is launched really well and these physicians have first experience success. In terms of commercial value, obviously, as you know, it's pricing dependent. So the US market is commercially more dollar value higher than the European market. But the adoption and the need for imetelstat comes out pretty equally across both US and Europe.

Our next question comes from the line of Corinne Jenkins.

Maybe a couple from me. On the EAP, what can you share regarding kind of the initial demand you're seeing for that program and where are the pockets of that demand coming from and how are you managing through that program ahead of the launch?

The expanded access protocol was recently opened and approved and really is a bridge for – a mechanism for patients who receive imetelstat prior to approval and commercialization. The way that the EAP protocol is structured is that the patient care providers and physicians place a request on an individual patient basis for enrollment into the protocol, and then it's very similar to any other type of clinical trial protocols. So it's still early on in our opening of it and we don't yet have a sense of the kinetics of the enrollment.

Maybe separately, I think I saw in the press release, you expect the growth in terms of employees to be up to about 160 by the end of the year, at that point how much additional hiring you'll need to do to be prepared for the launch?

This is Olivia. So that total does not include the sales force that is going to need to be hired for launch because the timing of that hiring is going to be dependent on the PDUFA date. And then I'll hand the microphone over to Anil to talk about the size of the sales force and what's going to be necessary.

As we have previously guided, Corrine, on that answer, sales force field expansion will be very PDUFA aligned. And our expectation is national competitors coverage. And as we previously said, we expect our commercial organization to be somewhere in the 100 to 120 full time people, including sales and the commercial team supporting us across medical affairs, as well as the commercial side of it.

Our next question comes from the line of Gil Blum.

Maybe a simple one first. So we expect news on some FDA feedback soon in August. Will we know also about an advisory committee at that point or did that take a little longer?

I'll take that one, Gil. Ordinarily wouldn't know about an advisory committee either plus or minus at that time. Agencies usually are very focused on an acceptance of the NDA for review. In their lingo, the filing of the NDA. That's the one thing that we can count on. We would next expect to hear possibly by the end of the month of August, something further about the actual PDUFA date, assuming that it's accepted, which would give an indication of whether it was a priority or standard review. If and when there would be an advisory committee meeting and ODAC, quite uncertain when that would be announced or requested or posted. It can come quite late in the review cycle. It can come a little bit earlier, but there's no specific timing for that, and I don't think we would have any feel for that right now.

Maybe a bit of a broader question, a clinical one. Is there any understanding regarding the non-responders in low risk MDS? Is this just because the primary disease is too far longer? What are your insights on patients who seem to not respond?

So you're asking about patients who probably don't achieve TI. A lot of those patients, though they may not achieve 100% transfusion independence, they may have reductions in transfusion burden. They may have increases in hemoglobin, improvement in symptoms or other quite possibly like intangible benefits or benefits that were not routinely assessed on the study. So we continue to look into that. And we continue to look into if there are any predictors of patients who will achieve TI in terms of mutation or pathology, or anything like that. And I have not yet seen anything notable distinguishing patients who achieve TI from those who don't.

Our next question comes from the line of Julie [ph].

[Technical Difficulty] Stifel. I just have a one quick question regarding IMpactMF. So with the 40%, if I remember correctly, with 40% of patients enrolled in this study now, can you guys maybe talk a little bit about how – so basically, whether the early event rate that you have observed to date is in line with your expectation? And also, can you give us a little bit of cover on maybe the efforts or anything that you're doing to expedite enrollment in IMpactMF.

Regarding the event rates, given that this is a blinded study, although the patients know which arm they're randomized to, we are blinded to the data and to what patients are taking when we look at the analysis as a whole. So we cannot comment on the event rate until basically either the interim or the final analysis when the study is unblinded. But just to say also that the 40% enrollment, to contrast that with 35% of the enrolled patients having died is when the interim is triggered. And then to your second question about efforts to expedite or to boost enrollment, we had ongoing efforts since end of last year, early this year, which included site visits and investigator engagements, and additional resourcing to encourage enrollment and boost enrollment. We continue to receive enthusiastic feedback from MF investigators for the study and for enrolling patients in the study. And we hope that the efforts that we've put in to date will continue to bear fruit, and we'll see that that helps and maintains our enrollment.

[Operator Instructions]. Our next question comes from Joel Beatty.

Just wanted to follow up on the previous question on IMpactMF. With the guidance now being for interim readout in first half of 2025, is that timing driven solely by the enrollment rate? Or does it also take into consideration the event rate on a blended basis?

It takes into account the current enrollment rate. And what we've seen in enrollment now that the study's been open for some time, we have a better or more of a sense now for the pace of enrollment. But the event rate is based on the initial [indiscernible] assumptions built into the study. At this time, we haven't recalibrated [indiscernible].

Now that ASCO has passed, can you discuss what you see as the opportunity to capture market share in RS negative patients, which is, as I understand it, the majority of the market and also where luspatercept showed a negative trend on the primary endpoint.

I think the data is very clear. What we are seeing in terms of sequencing post-ASCO and EHA dates on all the data that came out at low risk MDS, in RS negative patients, the strong preference for physician remains imetelstat, especially in patients who are previously ESA treated and that is pretty overwhelming, both from US perspective, as well as from European perspective. So that's very consistent. And I think that is in line with what we know previously from the phase study. And also, obviously, from the [indiscernible] in the frontline setting. So we feel that imetelstat is likely to become the standard of care in RS negative patients, especially the ESA treated patient population, which will be the vast majority, and that is irrespective of transfusion burden. So that is good for patients. And it is a validation for the data that came out from [indiscernible].

One last question. Operating expenses looked up a bit from about $40 million in Q1 to about $52 million now in Q2. Can you help put that increase into context and give a sense of what the trajectory in expenses might look like over the next quarter or two?

As I mentioned, we're still maintaining our overall annual guidance of up to $210 million of non-GAAP expense. And as I think I've said on previous calls that I did anticipate the getting toward the second half of the year the ramp in expenses, not only as the more intensified commercial prep efforts, but also as we are manufacturing commercial grade inventory, getting ready for launch as well. And so, that's where you're seeing the increase happening here in the second quarter in comparison to the first quarter, is there were increased expenses related to manufacturing costs, as well as, I would say, increased costs for consulting expenses as we have submitted all of the regulatory filings related to the NDA and then now are in the heart of getting everything ready for the MAA filing here in the fourth quarter of 2023.

Okay. And there are no further questions. So at this time, I'd like to turn it back over to Aron Feingold.

Thank you so much for joining us today. We appreciate you taking the time to listen and participate and look forward to keeping you updated on our progress.