Ladies and gentlemen, thank you for standing by and welcome to the Geron Corporation Fourth Quarter and Year End 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

[Operator Instructions] I will now like to hand the conference over to your speaker today Ms. Suzanne Messere. Please go ahead..

Thank you, Gabriel and good afternoon everyone. Thank you for joining us for today's conference call. I am joined today by Dr. John Scarlett, Geron's Chairman and Chief Executive Officer; and Olivia Bloom, the company's Chief Financial Officer. After the market closed today, we announced our fourth quarter and full year 2019 results via press release.

It is available on our website under www.geron.com/investors. In addition a live webcast of the call is available on our website and will be archived for 30 days.

Before we begin, please note that except for statements of historical facts, this presentation and question-and-answer session contain forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Investors are cautioned that such forward-looking statements include any of the company's plans, expectations, timelines, beliefs, statements of potentiality and projections, and without limitation those regarding that the topline results from the Phase III IMerge clinical trial are expected to be available by midyear 2020 -- midyear 2022 and that IMerge will be fully enrolled by the end of 2020 that Geron will make a decision by mid-2020 regarding potential late-stage development of imetelstat and MF that Geron will begin a proof-of-concept study in higher-risk MDS and AML and that Geron's 2020 operating expenses will be $70 million to $75 million.

All of these forward-looking 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 those regarding that the company may be unable to overcome all clinical, safety, efficacy, technical, scientific, operational, manufacturing, and regulatory challenges to enable full enrollment of IMerge in 2020 the start of the proof-of-concept study in 2020 or that the topline results from the Phase III IMerge clinical trial will be available by midyear 2022; that regulatory authorities may not permit the further development of imetelstat on a timely basis or at all; that the company may decide not to proceed with late-stage development of imetelstat and MF; that the COVID-19 pandemic may significantly impact enrollment of patients in Geron's clinical trials and/or drug supply; and that there may be unexpected operating expenses or events or changes in Geron's plans that cause the $70 million to $75 million 2020 financial guidance to be revised.

Detailed information on the above risks -- on the risks and uncertainties and additional risks, uncertainties, and factors that could cause actual results to differ materially from those in the forward-looking statements are under the heading Risk Factors in Geron's annual report on Form 10-K for the year ended December 31st, 2019 filed with the SEC.

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 obligations to update these forward-looking statements to reflect future information, events, or circumstances. I will now turn the call over to Dr. John Scarlett, Chairman -- Geron's Chairman and CEO.

Chip?.

Thanks Suzanne. I'd like to welcome everyone to our fourth quarter and year end 2019 conference call. 2019 was a pivotal year of accomplishments for Geron chief among them being the start of the randomized placebo-controlled Phase III IMerge trial and lower risk myelodysplastic syndromes. Based on interactions with U.S.

and European regulatory authorities, we expect this study, if successful, to support potential registration of imetelstat and lower risk MDS. Topline results from IMerge are expected in mid-2022. In addition, in 2019 we assembled an impressive multifunctional in-house team with a proven track record in early and late-stage drug development.

Nine members of our current development team worked on imetelstat when the drug was with Janssen. They followed imetelstat to Geron and therefore, have in-depth knowledge of imetelstat's regulatory and clinical development history.

The combined depth and breadth of experience of our new hires in developing and commercializing blockbuster drugs such as Imbruvica and Darzalex empowers us to execute not only on our current and future trials, but also to create and execute well-designed global development plans to enable potential commercial success.

In 2020, our plans will focus on completing enrollment in the Phase 3 IMerge clinical trial; presenting at future medical conferences additional Phase 2 data from both IMerge and lower-risk MDS and the IMbark and relapsed/refractory MF; deciding any potential late-stage development path in myelofibrosis; and commencing a new proof-of-concept study in higher-risk MDS and AML.

Of these plans, our decision related to MF is probably the most anticipated. We had an FDA end-of-Phase 2 meeting in the fourth quarter of last year and which we discuss results of our IMbark trial in myelofibrosis patients, who are relapsed or refractory to JAK inhibitors.

Based on feedback from that meeting, we plan to submit Phase 3 trial design proposals in MF to the FDA and in the second quarter of 2020 to have further discussions with the FDA regarding a potential regulatory approval path if any for imetelstat and MF.

Due to the sensitivity of ongoing interactions with the FDA, all of the specifics related to our clinical trial design proposals and other elements of our clinical development strategy in MF will remain confidential for now.

We look forward to the opportunity of sharing more information by midyear, which is when we expect to announce our decision regarding any potential late-stage development in MF.

Also, related to MF, we expect to present in a major medical conference new analyses from the IMbark Phase 2 trial that correlate the median overall survival observed with other clinical endpoints from the trial.

We believe these new analyses will provide further support for the potential improvement in survival for these patients as an indication of disease modifying activity of imetelstat treatment in myelofibrosis.

After Olivia, our CFO reviews our fourth quarter and year-end 2019 financial results as well as projected 2020 guidance I'll discuss imetelstat's mechanism of actions, data from the Phase 2 IMerge trial the status of IMerge in Phase 3 and our current thinking on potential additional indications.

Olivia?.

Thank you, Chip, and good afternoon, everyone. For the fourth quarter of 2019, we reported a net loss of $29.1 million or $0.15 per share compared to $7.3 million or $0.04 per share for the fourth quarter of 2018.

Net loss for the full year of 2019 was $68.5 million or $0.36 per share compared to $27 million or $0.15 per share for the full year of 2018. Revenues for the three and 12 months ended December 31, 2019 were $171,000 and $460,000 respectively compared to $375,000 and $1.1 million for the same period in 2018.

Revenues for the three and 12 months ended December 31, 2019 and 2018, included royalty and license fee revenues under various non-imetelstat license agreements.

The decline in revenues reflects a reduction in the number of active research license agreements in 2019 related to our human telomerase reverse transcriptase or hTERT technology as a result of patent expirations on the underlying technology.

Total operating expenses for the three and 12 months ended December 31, 2019 were $30.2 million and $73 million respectively compared to $10 million and $32.1 million for the same period in 2018.

Research and development expenses for the three and 12 months ended December 31, 2019 were $24.9 million and $52.1 million respectively compared to $5.1 million and $13.4 million for the same period in 2018.

The increase in research and development expenses compared to the same periods in 2018, primarily reflects costs for the transition of the imetelstat program, including resuming sponsorship of the ongoing imetelstat clinical trials, expenses for start-up activities for the IMerge Phase 3 clinical trial, purchase of inventories of drug product, drug substance and raw materials from Janssen and higher personnel-related costs for the expanding development team.

General and administrative expenses for the three and 12 months ended December 31, 2019 were $5.3 million and $20.9 million respectively compared to $4.9 million and $18.7 million for the same period in 2018.

The increase in general and administrative expenses compared to the same periods in 2018, primarily reflects higher corporate and patent legal costs and increased personnel-related expenses for additional G&A headcount to support the development organization.

Interest and other income for the three and 12 months ended December 31, 2019 was $925,000 and $4.2 million respectively compared to $1.1 million and $3.3 million for the same period in 2018. The overall increase in interest and other income in 2019 when compared to 2018, primarily reflects higher yields on our marketable securities portfolio.

We ended the 2019 fiscal year with $159.2 million in cash and marketable securities. We expect these funds to be sufficient to continue the IMerge clinical trial in 2020 and to commence a proof-of-concept study in 2020. Moving on to projected 2020 guidance.

We expect operating expense burn to range from $70 million to $75 million, which includes costs related to the global IMerge Phase 3 clinical trial, validation of supply chain vendors for the manufacturing of imetelstat.

Further interactions with the FDA in connection with the planned submissions of Phase 3 trial design proposals in MF, and discussion regarding a potential regulatory approval path in MF, and commencement of a proof-of-concept study of imetelstat.

2020 projected guidance does not include any late-stage clinical costs for MF, since we have not made our decision regarding any potential late-stage development in MF, which we expect to occur by year 2020. As of December 31, 2019 the company had 46 employees.

We plan to grow to a total of 55 to 60 employees by year-end 2020 of which the majority will be research and development personnel. The increase in headcount is reflected in our 2020 projected guidance.

Financial guidance is based on a set of assumptions at a point in time and if the company's plans change, causing assumptions to be revised, then we expect to update guidance at that time. And with that, I will turn the discussion back to Chip.

Chip?.

Thanks Olivia. imetelstat has great promise in hematologic myeloid malignancies due to its unique mechanism of action, which results in telomeres inhibition. The progression and growth of these malignancies is driven by rapidly proliferating malignant progenitor cells, which have highly up-regulated telomeres.

By selectively inhibiting the telomeres activity in these cells, our clinical events to date indicate imetelstat may have disease-modifying activity in multiple hematologic myeloid malignancies, including MDS and MF. This potential to be disease-modifying may fill a void in the current treatment landscape of these disorders.

For example, myelofibrosis key opinion leaders point out that a potential disease-modifying agent with the mechanism of action different from a JAK inhibitor would be highly desirable in order to both treat non-JAK inhibitor responsive patients and to gain long-term benefits including increased survival. Turning to lower-risk MDS.

The Phase 2 IMerge data presented at the European Hematology Association's Annual Congress in June 2019 continued to highlight the meaningful and durable transfusion independence across all MDS subgroups. And most importantly, in patients with a high transfusion burden of greater than four units per eight weeks.

For example, we reported an eight-week transfusion independence or TI rate of 42% and a 24-week TI rate of 29%. Transfusion-free intervals lead to an improved quality of life, less time in an infusion chair, less cost and reduced exposure to potential iron overload.

Core observations from the IMerge data presented at EHA also highlighted potential disease-modifying activity associated with imetelstat treatment in lower-risk MDS. First, 75% of the eight-week TI responders also experienced a rise in hemoglobin of more than three grams per deciliter.

This would not have occurred without repopulation of normal hematopoietic cells and subsequent production of normal blood cells in the bone marrow.

Second, the medium duration of transfusion independence in IMerge was reported to be 86 weeks or over 20 months with the longest duration free period reported to be more than 2.5 years, also clearly indicating modification of the underlying disease process.

Third, of the three patients with poor cytogenetic risk in whom post treatment Karyotype data was available, two achieved a partial cytogenetic response as indicated by a reduction in sales with abnormal Karyotypes, and more importantly, these patients achieved eight or more weeks of transfusion independence.

Fourth, imetelstat decreased the amount of one of the most common mutations in MDS patients, which was SF3B1. Of the six patients with SF3B1, five had some reduction in the number of cells with this mutation and after treatment with imetelstat also achieved long-term transfusion independence.

With patients remaining in the Phase 2 IMerge trial, this year we expect to present at a future medical conference more mature data from the continued treatment and follow-up of these patients, including durability of transfusion independence.

As I commented on earlier in this call, we opened the IMerge Phase 3 clinical trial in August of 2019 and the first patient was dosed in October of 2019. 63% of the sites were open for enrollment as of the end of February. Well with regard to COVID-19, yesterday the World Health Organization deemed infections with this agent to be a pandemic.

As of today, Geron has not experienced any significant disruptions due to the virus. We have been able to continue to operate relatively seamlessly, particularly with the use of technology such as video teleconferencing and to-date haven't experienced any enrollment delays or supply chain issues in IMerge related to COVID-19.

We're carefully monitoring both enrollment and the supply chain. Based on internal assessments, we anticipate there could be isolated enrollment delays in the future for example in Italy due to travel restrictions.

We also believe we have substantially mitigated the risk related to our supply chain because we believe we have sufficient drug supply to conduct our ongoing IMerge clinical trial and have widely distributed this drug apply throughout the regions where we're conducting the trial.

There is still a lot of uncertainty regarding the magnitude of the effects of COVID-19, including the length of time the pandemic will persist.

Therefore like any company that's conducting clinical trials, we could become significantly impacted by COVID-19 with respect to slower-than-expected patient enrollment or redistribution of drug supply and will provide an update on our next quarterly call.

We continue to expect completion of enrollment in the IMerge Phase III trial by the end of 2020 and to achieve topline results by midyear 2022.

In the Phase III we're enrolling the same population of low-risk MDS patients who are relapsed or refractory to erythrocyte stimulating agents and are using the same primary and secondary endpoints as in Phase II.

Finally in the second half of this year, we plan to expand the imetelstat program by commencing a proof-of-concept single agent study in higher-risk MDS and Acute Myeloid Leukemia otherwise known as AML. These patients have a dismal prognosis after failure of hypomethylating agents.

For example following HMA treatment failure, higher-risk MDS patients have a median OS of approximately six months and AML patients have a median OS of less than six months. There are currently no approved therapies to treat these HMA failure patients as such. They represent a significant unmet medical need.

We believe that based on the mechanism of action of imetelstat it may be efficacious in higher-risk MDS and AML. In addition, we've reported strong preclinical data that suggests that imetelstat targets on malignant stem cells in AML.

We're still in the planning stages of this proof-of-concept study and expect to have more information to share at/or before our second quarter conference call. We expect to begin this study by the end of the fourth quarter of this year. In summary this could be a defining moment -- sorry a defining year for Geron and imetelstat.

With a strong team in place to execute our 2020 claims and ongoing Phase III registration trial in lower-risk MDS upcoming clinical data updates to support imetelstat's competitive advantage as a drug with potential disease-modifying activity in hematologic myeloid malignancies, potential future MF development plans and a proof-of-concept study to expand the imetelstat program with additional hem-malignancies.

We look forward to further advancing the development of imetelstat. We believe that as we continue to formalize and achieve our 2020 plans that we will demonstrate we're firmly on the path to create new treatment options for patients and value for investors. So with that, now we'd like to answer your questions.

I'll turn the call back over to our operator..

[Operator Instructions] Your first question will come from the line of Chad Messer of Needham. Please go ahead. Your line is open..

Thanks for taking my question. Just starting with the proof-of-concept study just to be clear, it sounds like this is a single agent in HMA failures, just wanted to confirm that.

And is there any interest in doing imetelstat combo studies in the future? Whether it's in AML or MDS MF or anywhere else?.

Yes. Thanks Chad. So currently, we anticipate that this will be in HMA failures so I confirm that. Second of all, with regard to combination studies as you know the challenge there is that you have to always think about competing toxicities from the combination agents.

I think we'll probably have more to say about this in the future in terms of our thinking around how to develop drug further. But for the moment, we don't have any planned combination studies on the books right now..

All right. Thanks. That's helpful. And then part of your operational goals for the year you talked about reestablishing manufacturing supply chain. Not something I ever remember worrying about and hopefully after you answer my question that will remain true.

But what is there -- to do there -- is this something Janssen was doing and you've got to get back control of? And you said, you have drug supply for the ongoing clinical trial.

It's not to that, I presume this is for future trials and potential commercial supply?.

Yes. I'm going to let Olivia comment about that. She's been all over it..

You're right, Chad. And as part of the guidance, I did say that some of those costs are related to validation of our supply chain vendors. So as you may recall, imetelstat is contract manufactured out and we have several vendors that we've utilized for many years.

That entire supply chain vendor relationship was transferred to Janssen at the time of collaboration they all have now transferred back to Geron. Now with us being the sponsors of the study and with us now potentially future commercializing, obviously, we need to ensure the revalidation of the processes under our quality process..

Okay..

And that would be part of it -- that would be part of a submission in the future, right? So we have to demonstrate that we have control of that and that all of our protocols are being met..

Right that sounds like more or less what I would've expected..

Yes..

I will hold my follow-up on imet for mid-year. Thanks guys..

Okay..

Appreciate it..

Thank you..

Your next question will come from the line of Andrew D'Silva of B. Riley. Please go ahead. Your line is open..

Yes. Good afternoon. Thanks for taking my questions. And sorry if you did hit on many of these I was jumping in between a couple of other calls.

But as it relates to MDS, did you provide any additional information on patients related to transfusions or -- as far as the ones that have surpassed 141 weeks? Is that -- was that mentioned in the prepared remarks?.

No. We will hold any further information for future medical conferences, right? So we just reiterated some of the data from last year, but we have not -- we haven't related any new information on this call..

Okay, okay. But patients that you're aware of are still....

Yes, we have patients who are still continuing on…..

In the Phase 2..

In the Phase 2 study for sure..

Okay, okay. That's good to hear. And as it relates to the Phase 3, obviously eight weeks is kind of the benchmark for your primary endpoint.

Can you just talk about the secondary endpoints? And maybe how you think about that as your -- as you're going through the trial and when you start thinking about actually a submission?.

Yes, absolutely. It's a great question, Andy. Thanks. First of all, I'd like to say that the eight week transfusion-free interval is in fact -- it is a regulatory milestone or efficacy endpoint that all regulators want to see. It's a good way to look across comparative efficacy across different drugs.

But I have to tell you that many regulators, particularly I would say European Regulators have emphasized the importance of longer durability than eight weeks. And when we talk to physicians and KOLs, we also hear exactly the same thing.

So I think we've been very pleased by the 24-week durability that's been discussed and we continue to follow patients for long-term durability. We think that's going to be a very important story for this drug in low-risk MDS.

So I'd say the two stories that I think are -- they're worth watching are that the actual length and durability of transfusion-free intervals. We also -- I would -- secondarily, I would look at the degree to which transfusion burdens come down even if patients don't quite achieve, a transfusion-free interval.

That's often measured by the -- I believe WHO criteria HIE, which means -- effectively means a reduction in the transfusion burden. And physicians tell us that that's really important. Even if you can't quite reach no transfusions, if you can substantially take them on let's say who has eight or 10 units per eight weeks that they're requiring.

It's a lot of red blood cells over that period of time and reduce that very substantially to less than four and in some cases only a couple. That's actually very clinically meaningful. And so I think -- so the durability of transfusion-free intervals and the overall reduction. And then of course it's the patient population that's occurring in.

It's one thing to take a patient who's got a couple of units of red cells every eight weeks that they require. That's still important. It's still important to get them to be transfusion-free but we've shown that we can achieve both eight-week and longer duration TIs in patients who have a substantially greater transfusion burden at baseline.

I think all of that's really important as we go forward and as this area matures with new entrants and with the availability of monitoring the therapies beyond HMAs..

Okay and great. No that was very good color. And just last question.

As far as new hires go and the cash burn for 2020, about how much of that's going to be tied to new studies the proof-of-concept that you referenced?.

I won't have -- I'm not providing the breakdown between the Phase III and the proof-of-concept. But as you can imagine the proof-of-concept itself with commencing towards the fourth quarter of the year. It's not going to be as big of a burden on obviously the overall burn.

But just to give you a little bit of color related to the total operating guidance of the $70 million to $75 million. I would say -- I would tell you that the FTE cost for that is a little over a third. The CMC or manufacturing type costs are about one-fourth.

The trial costs which are inclusive of the Phase III as well as the proof-of-concept, okay it's about a fifth. And then just general G&A kind of operating as a public company and all those kinds of things facilities in all kind of stuff is about a six -- one sixth of the number..

Okay. Perfect. Thank you very much and best of luck going forward..

Okay. Thank you very much..

Your next question will come from the line of Tom Shrader of BTIG. Please go ahead. Your line is open..

Hi. This is Kaveri for Tom. Thanks for taking my question. I have a couple. My first question is on IMerge. For your Phase III trial, have you thought about stratifying patients on prior luspatercept use.

Are they likely to have less impact bone marrow after failing that drug?.

That's an interesting question. We don't know the answer to the latter part. We do allow patients who have prior experience with luspatercept into the study. As you can imagine since that drug is scheduled for PDUFA date in the future next month. We haven't seen very many patients.

They would have to have been patients who would be on a controlled clinical study and I'm not even sure if they would know whether they had been on luspatercept or a placebo. So we haven't seen it yet. And I don't know how much we'll see in the future. I think not that many is my guess.

But we do allow them in and kind of interested to see what happens if -- in fact we do get a few. But I don't know anything about their status of their bone marrow, et cetera, et cetera. We just haven't -- we don't have any experience yet..

That's helpful. Thanks. And curious to know how do you expect to define high-risk MDS patients given that MDS patients are less willing relative to AML patients to deal with drugs with some level of toxicity. In other words, high-risk MDS has been a historical challenge to enroll.

Do you see that as an issue?.

First of all this is a proof-of-concept study. So whatever the numbers will be it will be fairly small numbers of patients, right? I think once we have evidence whether the drug actually works in for example, HMA failures, it will be probably easier to predict the ease or lack thereof of enrollment. I would say this.

Although, we as a company, don't have direct experience with enrolling and treating high-risk MDS patients. They have -- today HMAs are really quite toxic drugs.

I don't think anyone should misunderstand or have any question about the fact that HMAs require very careful monitoring, cause a lot of toxicity, and so I -- and lastly, high-risk MDS patients are really sick and have very diminished survival compared to low-risk MDS patients.

So, many of them also understand that a substantial proportion will transform to AML if they live long enough. And of course that's really dismal survival once you transform. So, I think there is a lot of clamor within the community at least.

And the people we talk to we don't talk to as many patients, right, because they're only accessible through very limited means. But we sure talk to a lot of KOLs, Key Opinion Leaders and treating physicians. And I think they're very anxious to have additional therapies and I think they will be very interested in this type of study.

So, I hope that explains kind of a little more color on how we're imagining this going..

Got it. Thanks for the color..

Sure..

This concludes our Q&A portion for today. I will now turn the call back over to Dr. Scarlett for closing remarks..

So, I'd like to thank everybody on the call for joining us today. We look forward to the next three months the next quarter with a lot of anticipation. And we're -- we certainly look forward to sharing any achievements that come our way throughout the coming year. So, thanks an awful lot. Talk to you soon. Bye..

This concludes today's conference call. You may now disconnect..