Anna Krassowska - Head of IR Olivia Bloom - EVP, Finance and CFO John Scarlett - President and CEO.

Analysts:.

Good day, ladies and gentlemen. And welcome to the Geron Fourth Quarter 2015 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. [Operator Instructions]. As a reminder, the conference is being recorded.

I'd now like to introduce your host for today's conference Ms. Anna Krassowska, Head of Investor Relations. Ma’am, you may begin..

Thank you. Good morning, everyone. And thank you for joining us for the Geron fourth quarter and year end 2015 earnings call. With me this afternoon are Dr. John Scarlett, our President and Chief Executive Officer; and Olivia Bloom, our Executive Vice President, Finance and Chief Financial Officer.

Today we issued a press release that reported results for the fourth quarter and year ended December 31, 2015. This release can be found on our website at www.geron.com. Today’s call is also being webcast live on our website and will be available for replay until March 26.

Before we begin, please note that except for statements of historical facts, the statements during this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These include, without limitations, statements regarding the potential payment under the Janssen collaboration agreement. The timeline, milestones, prospects and plans for Imetelstat, including patient enrollment and planned internal data reviews and analysis.

The therapeutic potential and safety of Imetelstat, Geron desire to diversify and financial or operating projection or requirement. 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 that Imetelstat is safe and efficacious in multiple indications, regulatory agencies permit the clinical trials to begin or continue to proceed, clinical trials can proceed without delays due to slow enrollment or other factors and Geron will receive continuation milestone and royalty payments of Janssen.

Additional information 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 ending September 30, 2015.

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.

We will begin today’s call with a summary of the 2015 fourth quarter and full year operating results from Olivia, and then Chip will review recent events and discuss the ongoing activities with Imetelstat clinical trials being conducted by Janssen.

Olivia?.

Thanks, Anna. Good afternoon. For the year ended December 31, 2015 we are reporting Net income of $46,000 or zero cents per share, compared to a net loss of $35.7 million or $0.23 per share for the year ended December 31, 2014.

For the fourth quarter of 2015 we are reporting a net loss of $8.5 million or $0.05 per share, compared to a net loss of $8.9 million or $0.06 per share for the comparable 2014 period. Revenues for 2015 were $36.4 million compared to $1.2 million for 2014.

Revenues for the fourth quarter of 2015 were $220,000 compared to $178,000 for the comparable 2014 period. The increase in revenues in 2015 compared to 2014 was primarily due to the recognition of collaboration revenue for the $35 million upfront payment from Janssen.

We received the cash upfront payment from Janssen in December 2014 upon the effectiveness of the collaboration and license agreement with them, which we recorded as deferred revenue at that time.

Under accounting rules to recognize the upfront payment as revenue we had to deliver the Imetelstat license rights to Janssen and complete the technology transfer related activities as outlined under the collaboration agreement, which we completed in the third quarter of 2015.

Combining this performance with the delivery of the Imetelstat license rights we fully recognize the upfront payment as collaboration revenue and in accordance with generally accepted accounting principles in the third quarter 2015.

Future milestone payments under the collaboration agreement with Janssen are not expected unless and until an affirmative continuation decision is made by Janssen. Total operating expenses for 2015 were $36.9 million compared to $37.5 million for 2014.

Total operating expenses for the fourth quarter of 2015 were $8.9 million compared to $9.2 million for the comparable 2014 period. Operating expenses for 2015 also include restructuring charges of $1.3 million in connection with the company’s organizational resizing announced in March 2015.

Research and development expenses for 2015 were $17.8 million compared to $20.7 million for 2014. Research and development expenses for the fourth quarter of 2015 were $4 million compared to $4.4 million for the comparable 2014 period.

The decrease in research and development expenses in 2015 compared to 2014 primarily reflects the net result of lower personnel related costs due to the organizational resizing and reduced manufacturing costs for Imetelstat drug product, all of which was partially offset by higher costs for the clinical development of Imetelstat in collaboration with Janssen.

General and administrative expenses for 2015 were $17.8 million compared to $16.8 million in 2014. General and administrative expenses for the fourth quarter of 2015 were $4.9 million compared to $4.8 million for the comparable 2014 period.

The increase in general and administrative expenses in 2015 compared to 2014 primarily reflects higher noncash stock based compensation expense. Interest and other income for 2015 was $677,000 compared to $373,000 for 2014. Interest and other income for the fourth quarter of 2015 was $196,000 compared to $100,000 for the comparable 2014 period.

The increase in interest and other income for 2015 compared to 2014 primarily reflects higher cash and investment balances with the receipt of the $35 million upfront payment from Janssen and higher yields earned on our marketable securities portfolio. We ended 2015 with $146.7 million in cash and investments.

We have not incurred any impairment charges on our marketable securities portfolio. For 2016 we are projecting cash operating expenses of approximately $34 million.

This is comprised of approximately $18 million for our proportionate share of cost for supporting to end IMbark and emerged trails under the Janseen collaboration, approximately $9 million in personnel related cost, and approximately $7 million for corporate cost such as business development, legal, accounting, IT and facilities.

This projection does not include any additional cost associated with acquiring a new oncology asset program of company and any subsequent development cost. If such an acquisition were to occur, we would update our guidance for the new activity.

I will now turn the call over to Chip to review current company events Chip?.

Thanks, Olivia, good afternoon everyone and thank you for joining. Before I discuss the ongoing IMbark and emerge studies I’d like to acknowledge several recent Imetelstat publications and scientific presentations. In September Imetelstat clinical data were published in two back-to-back papers in the New England Journal of Medicine.

These two papers reported the unprecedented molecular responses that were observed in Geron’s proof of concept study in essential thromocytemia or ET and bone marrow responses in the male clinic pilot study in mylofibrosis. These data suggest Imetelstat may have disease modifying activity.

In December, at the American Society of Hematology Annual Meeting, there were two oral presentations describing Imetelstat clinical data.

The first presentation was given by the investigators of the completed ET study and described further mutation analogy showing that in addition to reductions in allele burdens of primary JAK2, CALR and MPL mutations, Imetelstat also suppress the allele burdens of multiple other gene mutations.

These data provide additional evidence to suggest that Imetelstat suppresses the malignant clones driving the disease. The second presentation given by Dr. Tefferi reported clinical data from the first testing of Imetelstat in a cohort of nine patients of MBS from the male clinic pilot study. Eight of whom had transfusion dependent disease.

He observed three of those eight or 38% of patients became transfusion independent during treatment with Imetelstat. In November of 2014, we entered into an exclusive collaboration agreement with Janseen to develop and commercialize Imetelstat worldwide.

Under the collaboration they are responsible for development, manufacturing, regulatory and commercialization activities for Imetelstat worldwide. During 2015, they advanced the clinical development of Imetelstat with the launch of two large global clinical studies.

The first study refer to as IMbark, is a Phase 2 clinical trial in patient with intermediate-2 and high risk mylofibrosis or MF. Who are relapsed after or refractory to JAK inhibitor treatment. The first patient in the study was dosed in September of 2015.

The male clinic in Rochester is one of many sites participating in this trail and opened the patient enrollment in January. Dr. Naseema Gangat is serving as principal investigator at the site. Dr. Gangat worked with Dr.

Tefferi on the male clinic pilot study and is a coauthor in many of his publications including the recent New England Journal of Medicine Paper. Dr. Tefferi remains an important contributor to IMbark.

For IMbark an internal review is planned by Janseen to assess the initial dosing regimens after approximately 20 patients in each of the two dosing arms have been randomized and followed for at least 12 weeks. Patient enrollment will continue during the review.

If both doses show adequate activity and an acceptable safety profile we expect Janseen to continue with enrollment in both arms until approximately 100 patients per dosing arm have been enrolled. If one of the doses does not show adequate activity or have acceptable safety. We expect that Janseen may stop enrollment in that arm.

In the event that both arms do not have adequate activity or acceptable safety we expect Janseen may select an alternative dose based on exposure response, efficacy and safety analysis. There are no predetermined study stopping rules in the protocol based on the results from this internal review.

However, one or more findings related to safety or lack of efficacy could result in stopping of the study. Based on enrollment to-date and current projections, we expect Janseen to conduct this internal data review in the second half of 2016.

In addition we expect Janssen to perform a data cut for IMbark in the second half of 2017 and thereafter to initiate the protocol specified primary analysis. However the timing for this primary analysis may vary based on numerous factors including the pace of patient enrollment in the study.

Following completion of the protocol specified primary analysis of IMbark, Janssen must provide a decision whether they want to continue their license rights under the collaboration agreement and continued development of Imetelstat.

The second study being conducted by Janssen referred to as IMerge is a phase 2/3 clinical trial in patient with low and intermediate-1 one risk of myelodysplastic syndromes or MDS who are relapsed after or refractory treatment within the Erythropoiesis Stimulating Agents or ESA.

We expect to be open label data from part one of IMerge will be available in the second half of 2016 for Janssen to conduct an internal review. These data must support a positive assessment of the benefit risk profile of Imetelstat in this study before proceeding to the randomized placebo controlled part 2.

During this internal review no new patients will be enrolled in the study. Again the timing for internal review is based on current enrollment projections for IMerge in which patient dosing have just begun.

We do not plan to publicly disclose the results of Janssen’s internal data reviews on IMbark or IMerge but will disclose any significant changes to the designs of either study. Jenssen has reported to us that both IMbark and IMerge are progressing on track.

As of mid-February between the two studies more than 75 sites are active cross multiple countries and continents and additional sites continue to come on board. The pace of enrollment takes into account that both studies are in a rare disease setting, which means a relative small patient population is available to participate in clinical research.

The investigators have given positive feedback in all systems or a go. Lastly for completeness I’ll provide a status update on the Mayo clinic pilot study. At the time of our last update from Janssen in February, 10 patients from the MF and MDS cohort continue to receive Imetelstat in this study.

Janssen is following these 10 remaining patients for safety with some efficacy data being collected for long terms follow-up. Under the current trial protocol patients were driving benefit from Imetelstat may remain on study. The study is projected and when no more patients remain on treatment or the last patient has been treated for five years.

With the focus now on IMbark and IMerge, we do not foresee further updates or presentations being provided for the Mayo clinic pilot study. 2016 could be a very important year for Imetelstat clinical development.

We are very pleased with level of commitment to Imetelstat and the level of progress that Janssen has demonstrated and look forward to future progress as well as the possibility of broader development in other o hematologic malignancies.

Before I close my prepared remarks I’d like to make a few comments about our business development activities and address some misconceptions. As we’ve indicated since announcing our collaboration was Janssen.

We have been seeking new Oncology products, programs or companies in order to potentially diversify our pipeline and leverage the potential cash streams that could come out of the successful development and commercialization of Imetelstat. Our search process has been focused primarily on companies in the hematology-oncology space.

An ideal acquisition candidate would posses either a platform technology or capability with outstanding signs behind it and which could be used to develop the pipeline of preclinical or early clinical stage products. We believe such company could leverage our expertise in late stage clinical development and strategy in o hematologic malignancies.

Despite the rigorous and comprehensive process we have undertaken thus far we have not yet engaged in such a transaction.

Some investors have questioned whether we should be conducting such a search much less proceed to a transaction prior to understanding the likelihood of success with Imetelstat and prior to our stock, which could be an important currency to be use in such a transaction reflecting an increase likelihood of success to the drug.

We understand that point of view and as such have a very high bar to reach in considering any transaction. We intend to be highly selective.

Ultimately a transaction may not happen for a number of reasons because we cannot find the right match both scientifically and from a business perspective because the market conditions are not appropriate or because we don’t believe the value accretion associated with such a transaction would justify the implicit dilution to our shareholders.

So we’re not going to force it a transaction. What we have now with Imetelstat is very hard to beat on a net present value basis. We will however continue to evaluate promising opportunities and consider whether executing a transaction would likely improve our shareholders value on a risk adjusted basis.

Thanks for listening I’d be pleased to answer questions in the time we have remaining. So with that operator let’s open the call to questions please. .

[Operator Instructions] Our first question comes from the line of Tom Shrader with Stifel. Your line is now open. Tom Shredder if your phone is on mute please unmute if your phone is on speaker phone..

Okay sorry. Here is [indiscernible] for Tom Shrader.

I have a question regarding the interim look for the impact as I understand you won’t communicate the data to us, but does the efficacy really has to be as good as the higher dose or will there be some trade-off for a lower efficacy, but a better safety profile?.

It’s an interesting question it’s a little hard to answer in the abstract. I think that the goal certainly is to find the right dose and these doses as you might recall are quite different right one is literally half of -- the 4.7 is literally half of the 9.4.

The lower dose was defined on the basis of sort of the lowest dose that we’d be expected to have full target engagement of [indiscernible] activity.

But I think that at the end of the day the real question is going to simply be is it better to have two doses or one and more importantly what would be the right dose and I don’t think I could comment a whole beyond that right now..

Okay, thank you. And I have another question if I may.

At the ASH presentation the presenter spoke about how physicians are still learning to use this product and that the common practice is to have dosing after the emergence of adverse events and that may be counterproductive through the treatment so how will you treat that in the trial and what dosing adjustments are allowed?.

Well there are dosing adjustments that are allowed and they are allowed in principally with regard to adverse events right. And so downward dosing adjustments can take place. And that’s been the history of the drug actually.

Most patients or many patients who have started off at a given dose if they have significant cytopenias than their dose is reduced or held and then reduced, which is actually more common.

So I think that we’re really following with the existing the current studies I think we’re actually following on a path that’s been very well trialed previously in the previous studies..

Okay, thank you very much..

Sure..

Our next question comes from the line of [indiscernible] with Janney Capital Market. Your line is now open. If your phone is mute please unmute, if your phone is on speaker phone please lift your handset..

Okay, thank you. And then I had a question on [indiscernible] they are talking about [indiscernible] traffic I am not sure I totally get that. Do you guys have any thoughts on that. I wonder if you can differentiate your approach to HIV versus what the other companies are looking at how you are defining that? Thanks..

I think we have some cross lines here. You’re on the Geron call and we are not engaged with [indiscernible]..

Operator, could you directly prompt please..

[Operator Instructions] Our next question comes from the line of Raymond Bolivi [ph], a private investor. Your line is now open..

In the New England Journal of Medicine article, there was some question raised in terms of the mechanism of action of Imetelstat and the question was raised with regard to how accurate your measurements of the telomeres were? How confident are you that the mechanism of action is actually telomerase inhibition?.

Yeah it’s a good question thank you very much. Well we’re very confident that Imetelstat is a telomerase inhibitor that I can tell you for sure. Companies done many, many studies and both preclinically and using clinical materials and we can absolutely be confident that it is a telomerase inhibitor.

I think the question of the exact mechanism of action by which it is exerting its effects in clinical trials of course remains open as it often does for many drugs as they progress through clinical development. There may be different mechanisms that come to the floor as both sciences continues on and as we do more work.

However on the other hand, I think that all of the indications to-date certainly suggest that an important role is being played by telomerase inhibition. I think we continue to view this drug predominantly as a telomerase inhibitor.

Sometimes it’s very difficult in clinical studies to accurately measure given depending on which types of clinical materials you’re using. It can be quite difficult to accurate measure telomerase inhibition. And I think that that’s just again a reflection often of the polytrophic nature of clinical trial materials that you are able to access.

But I think overall, we continue to view this very much as a telomerase inhibitor and that’s a very important and critical and differentiating part of its activity. So thank you..

Our next question comes from the line of Edward Levy with [indiscernible] Health Wealth management. Your line is now open..

Hi Chip this is Ed Levy and we haven’t talked in a while, but I am excited about the direction of that Geron is going right now and I want to give you a lot of thanks for that. I have a couple of questions; the first question involves the uncertainty of the opt in by Janseen. And it’s understood that a prerequisite for opting in would be continuation.

But if Janseen internal reviews later this year are very positive does that prevent Janseen from opting in or do they have to wait for continuation?.

So good question thank you very much. First of all we ought to get our terminology right. So the terminology in our collaboration agreement is a continuation decision.

So what you’re kind of referring to is as an opt in generically is actually treated in all of our documents and all of our materials that we put out as a positive continuation decision or an affirmative continuation decision.

That means that Janseen continues to maintain their license or worldwide exclusive license to the drug and continues to develop the drug worldwide.

With regard to your -- the more specifics of your question if I understand it correctly the question was do they have to wait if you will to the end of the conclusion of the primary analysis in the MS study or would it be possible for them to continue to make a positive or from the continuation decision earlier.

It is possible however, I don’t -- I think the way the agreement is structured there is really not a very power motivation for them to do that. And so that will probably take us going into the agreement a little more detailed than we have time or the ability to do.

But I can simply say it is possible and it is also possible because they hold a fully paid license today. They can start additional studies potentially without having to actually make that continuation decision.

So they have a lot of flexibility and I wouldn’t be really thinking too much about the precise timing and nature of that continuation decision. Of course if it does -- if it never comes than it’s very important. But I think they have a lot of flexibility and therefore I wouldn’t be necessarily expecting them to make an early continuation decision.

I would watch the space for actual activities that occur and the actual studies and so forth. And I think that's going to give you the most information about the prospects of the drug in their hands..

So Chip what you’re saying basically is that Janseen can advance a Imetelstat forward in other indications like AML for example without opting in is that possible?.

Yes that is possible. .

Okay, that’s good answer.

And one final question, if the internal reviews are good does John or Janseen have any timelines involving application for breakthrough therapy designation?.

So we as you probably have gathered by following this for as long as you have Ed. We generally refrained from making predictions or commentary about regulatory matters such as that. We usually just announce them when and if they occur. And I think that we’re going to continue with that.

It’s the smart thing to do both for our relationship with regulatory health authorities and also for our competitive situation with other companies. So I think we’re going to have to decline on that one..

Okay good. I do have some ideas about possible diversification strategies. So I’d like to talk to you at some point in the future about that..

Thank you very much for your questions..

I know you don’t need my advice but okay..

Thank you very much alright, bye-bye now..

Bye..

This does the Q&A portion of the call. I would now like to turn the call over to Dr. John Scarlett CEO for further remarks..

Well thanks very much everyone for taking the time to listen to the call. We appreciate your continued support and interest in the company. Good evening. Bye-bye..

Ladies and gentlemen thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone have a great day..