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Edited Transcript of GERN earnings conference call or presentation 7-Mar-19 9:30pm GMT

Q4 2018 Geron Corp Earnings Call

MENLO PARK Mar 25, 2019 (Thomson StreetEvents) -- Edited Transcript of Geron Corp earnings conference call or presentation Thursday, March 7, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* John A. Scarlett

Geron Corporation - CEO, President & Chairman of the Board

* Olivia Kyusuk Bloom

Geron Corporation - Executive VP of Finance, CFO & Treasurer

* Suzanne Messere

Geron Corporation - Head of IR & Corporate Communications

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Conference Call Participants

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* Chad Jason Messer

Needham & Company, LLC, Research Division - Senior Analyst

* George B. Zavoico

B. Riley FBR, Inc., Research Division - Analyst

* Julian Reed Harrison

BTIG, LLC, Research Division - Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to Geron's Fourth Quarter and Year-end 2018 Earnings Conference Call. (Operator Instructions) As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Ms. Suzanne Messere, Head of Investor Relations. You may begin.

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Suzanne Messere, Geron Corporation - Head of IR & Corporate Communications [2]

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Thank you, Catherine, 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, we announced our fourth quarter and year-end 2018 results via press release. It is available on our website under www.geron.com/investors.

On the call today, management will discuss recent events, fourth quarter highlights, financial results, guidance and upcoming milestones before answering your questions. 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, the statements during this conference call and question and answer are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These include, without limitation, statements regarding the expectations, plans, time lines and prospects for imetelstat and Geron, including, without limitation, that patient screening and enrollment for the Phase III portion of IMerge will begin by midyear 2019; that the IND and imetelstat clinical development program will transfer to Geron by the end of the second and third quarters of 2019, respectively; that more mature data from the Phase II portion of IMerge will be available and submitted for presentation at a medical conference in 2019; that Geron will outline its decision regarding the potential for late-stage development of imetelstat in relapsed/refractory myelofibrosis patients by the end of the third quarter of 2019; that the company's operating expenses will be between $65 million to $70 million in 2019; and other beliefs and plans, expectations and projections that are not historical facts, constitute forward-looking statements.

These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. These risks and uncertainties include, without limitation, risks and uncertainties related to timing of the transfer of the IND and imetelstat clinical development program to Geron and the ability of Geron to commence the Phase III portion of IMerge by midyear 2019 and to come to a decision regarding potential late-stage development in MF by the end of the third quarter of 2019.

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 SEC under the heading Risk Factors, including Geron's annual report on Form 10-K for the year ending December 31, 2018. 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.

I will now turn the call over to Dr. John Scarlett, Geron's Chairman and CEO. Chip?

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [3]

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Thanks, Suzanne. I'd like to welcome everyone to our fourth quarter and year-end 2018 conference call. On today's call, Olivia will discuss fourth quarter and year-end financials as well as 2019 projected guidance. I'll then discuss our plans for 2019, which build on data announced at the ASH Annual Meeting last December. After that, we will open the call for questions.

So in 2018, after regaining the rights to imetelstat, we put a plan in place to advance the imetelstat development program towards potential approval and commercialization. Based on this plan, we expect 2019 to be a pivotal year for Geron.

At a high level, during 2019, we expect to complete the transfer of the imetelstat IND from Janssen to Geron, to begin the Phase III trial in lower-risk MDS and to evaluate potential late-stage development in myelofibrosis as well as evaluate other myeloid hematology-oncology indications for imetelstat.

To enable these activities this year, we are recruiting a development team with robust hematology-oncology expertise. This began in mid-January with Israel Gutierrez, who joined the company as Vice President of Pharmacovigilance and Safety. Israel has 20 years of experience in drug safety and medical affairs at Pharmacyclics, Exelixis, Genentech, Celgene and Pharmion where he was a member of the hematology-oncology development teams. Israel's responsibilities at Geron are to lead our clinical drug safety risk management and compliance efforts, including product safety-related recommendations and decisions.

At the end of January, we announced that Aleksandra Rizo joined the company as Chief Medical Officer and as a member of the company's executive management committee. Dr. Rizo will be responsible for directing imetelstat's clinical development strategy, including designing a product development plan for current and potential future indications. Functions under her oversight include clinical science, clinical operations, data management, biostatistics, clinical pharmacology, translational research and medical affairs.

Aleksandra has more than 10 years of experience in hematology-oncology clinical development, leading teams through the entire drug development process from Phase I through Phase III clinical trials and regulatory submissions. At Janssen, she was compound development team lead for all Phase I myeloid hematology assets and global clinical leader for all late-stage myeloid assets, including acting as the clinical lead for the imetelstat development program for over 3 years.

In these roles, Aleksandra had oversight and leadership responsibilities for overall clinical development strategy, study designs, execution and data interpretation for all related programs, again, including the imetelstat program. In addition, she was a core member of Janssen's hematology strategy team and in this role, participating in and led diligence projects evaluating prospective hem-onc product candidates.

In the year prior to joining us, Aleksandra was the Executive Director of Strategy and a clinical lead for the myeloid hematology programs at Celgene Corporation. While there, she led both submission activities within the myeloid and hematology portfolio and participated in strategic and business development initiatives.

Since coming to Geron, Dr. Rizo is clearly assimilating extremely well and is very busy. She is interacting with her ex-Janssen colleagues as well as members of our team to ensure that all aspects of the IND transfer are on track and that we are fully up to speed on all elements of the clinical data. In addition, she's been very involved with the planning for the start of the Phase III MDS clinical trial as well as meeting with KOLs as part of the transition from Janssen to Geron. And of course, she's extremely busy with recruiting activities. We anticipate that Aleksandra will likely join us on future conference calls.

Overall, we're very happy to have both of these exceptional individuals joining our company and look forward to discussing other important new hires within our development team in the future.

So I'd like to turn the call over to Olivia, our CFO, who will review our fourth quarter and year-end 2018 financial results as well as projected 2019 guidance. Olivia?

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Olivia Kyusuk Bloom, Geron Corporation - Executive VP of Finance, CFO & Treasurer [4]

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Thank you, Chip, and good afternoon, everyone. For the fourth quarter of 2018, we reported a net loss of $7.3 million or $0.04 per share compared to $7.4 million or $0.05 per share for the comparable 2017 period. For 2018, we reported a net loss of $27 million or $0.15 per share compared to $27.9 million or $0.18 per share for 2017. Revenues for the fourth quarter of 2018 were $375,000 compared to $191,000 for the comparable 2017 period. Revenues for 2018 and 2017 were each $1.1 million and included royalty and license fee revenues under various non-imetelstat license agreements.

We adopted a new revenue recognition accounting standard as of January 1, 2018, using the modified retrospective transition method. Revenue for 2018 is presented under the new accounting standard, but revenue for 2017 has not been adjusted and continues to be reported under accounting standards used historically. Therefore, there is a lack of comparability between the periods presented. However, we do not expect the adoption of the new revenue recognition accounting standard to have a material impact to our financial statements on an ongoing basis.

Total operating expenses for the fourth quarter of 2018 were $10 million compared to $8 million for the comparable 2017 period. Total operating expenses for 2018 were $32.1 million compared to $30.2 million (sic) [$30.3 million] for 2017. Research and development expenses for the fourth quarter of 2018 were $5.1 million compared to $2.5 million for the comparable 2017 period.

Research and development expenses for 2018 were $13.4 million compared to $11 million for 2017. The increase in research and development expenses for the fourth quarter and year-to-date 2018 periods compared to the comparable 2017 periods, primarily reflects increases in Geron's share of imetelstat development costs under the former collaboration agreement with Janssen, where our share increased from 50% to 100% as of the termination date of the collaboration agreement; and additional costs for our CRO and other consultants to support the transition of the imetelstat program from Janssen to Geron.

General and administrative expenses for the fourth quarter of 2018 were $4.9 million compared to $5.5 million for the comparable 2017 period. General and administrative expenses for 2018 were $18.7 million compared to $19.3 million for 2017. The decrease in general and administrative expenses in 2018 compared to 2017 primarily reflects the net results of reduced personnel-related costs, including lower stock-based compensation expense, partially offset by higher consulting expenses and higher patent legal expenses due to the termination of the imetelstat collaboration with Janssen, as imetelstat patent costs previously were being shared by the 2 companies on a 50-50 basis.

Interest and other income for the fourth quarter of 2018 was $1.1 million compared to $375,000 for the comparable 2017 period. Interest and other income for 2018 was $3.3 million compared to $1.4 million for 2017. The increase in interest and other income for 2018 compared to 2017 primarily reflects higher yields on our marketable securities portfolio.

We ended the year with $182.1 million in cash, cash equivalents, restricted cash and current and noncurrent marketable securities, which is sufficient to commence the planned Phase III clinical trial in lower-risk MDS.

Moving on to projected 2019 guidance. We expect operating expenses to increase as we fully -- as we assume full responsibility for the development and potential commercialization of imetelstat. For fiscal year 2019, we expect operating expense burn to range from $65 million to $70 million, of which approximately $10 million to $15 million represents onetime costs, such as imetelstat program transition activities from Janssen to Geron, including the transfer of the IND sponsorship and purchase of raw materials and other supplies in preparation for new drug manufacturing.

In addition to the onetime costs, the 2019 guidance includes higher personnel costs for the expansion of the internal development teams and new cost associated with opening the New Jersey office and starting and supporting the global Phase III clinical trial in low-risk MDS.

The 2019 projection assumes the total number of employees for the company to grow to approximately 30 to 40 by year-end 2019, of which half of this total will be R&D personnel representing various functions, including clinical operations, data management, clinical sciences, clinical development, biostatistics, medical affairs, pharmacovigilance and drug safety, quality, regulatory and manufacturing.

The 2019 guidance includes modest costs to evaluate potential other indications for imetelstat in the latter part of the year, but the guidance does not include any late-stage clinical costs for MS as the assessment of the potential for future MS development has not been completed. Financial guidance is based on a set of assumptions at a point in time, and if those assumptions change significantly as a result of company activities and events, then we expect to update to guidance at that time. And with that, I will turn the discussion back to Chip. Chip?

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [5]

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Okay. Thanks, Olivia. It's a great segue to our 2019 objectives. Our first objective in 2019 is the transition of the imetelstat program back to Geron. We're on track for the IND transfer to take place by the end of the second quarter and for the transfer of the majority of the program by the end of the third quarter of 2019. We expect transfer of the manufacturing activities to be completed by the end of the third quarter of 2020.

We're diligently managing the transfer of the IND in order to enable the start of enrollment of the Phase III trial in lower-risk MDS by midyear. In order for us to complete the transfer, we need to obtain clinical, regulatory, biometric and safety information from Janssen to create our own databases and monitoring systems.

In addition, Janssen needs to transfer all regulatory filings as well as preclinical CMC and vendor information. We're also preparing clinical supplies and readying our internal processes and systems to ensure compliant study conduct for both of the ongoing imetelstat Phase II clinical trials.

Once the IND transfer has been completed, our next 2019 objective is to commence screening and enrollment for the Phase III clinical trial for imetelstat and lower-risk MDS by midyear. Data from the Phase II portion of IMerge that were reported at ASH in December support our decision to move forward to the Phase III.

The ASH presentation in December reported results from 38 patients enrolled in the Phase II portion of IMerge. All 38 patients were transfusion-dependent, with low or Intermediate-1 risk, non-del(5q) MDS who had relapsed or refractory to prior treatment with an erythropoiesis-stimulating agent and who were naïve to treatment with a hypomethylating agent or lenalidomide. The baseline-- sorry, the median baseline transfusion burden was 8 units of packed red cells given within an 8-week period of time, representing a high-transfusion-burdened patient population. Across the population of 38 patients, the transfusion burden at baseline range from 4 to 14 units per 8 weeks.

The primary efficacy endpoint of the trial is the proportion of patients who achieved transfusion independence for at least 8 consecutive weeks, also known as an 8-week TI rate. Key secondary endpoints include durability of response as assessed by a 24-week TI rate as well as the breadth of response through reduction in transfusion burdens and responses across the MDS subtypes.

I'd like to highlight some of the main outcomes reported at ASH in December, which encourage us to continue further development of imetelstat in lower-risk MDS. First, the 8-week TI rate was 37%. We believe this is a strong response. Patients in a similarly designed study of lenalidomide in non-del(5q) lower-risk MDS patients achieved an 8-week TI rate of only 27%.

Second, the 24-week TI rate was 26%. To put this in perspective, this means that about 70% of the patients who achieved an 8-week TI went on to achieve a 24-week TI. This is an excellent result, indicating significant durability of the transfusion independence in imetelstat-treated patients.

Third, the hematologic improvement-erythroid rate, known as HIE, was 71%, which means that 71% of the patients had a reduction of at least 4 units of packed red cells over 8 weeks compared to baseline. Again, this is an excellent result. Drugs other than imetelstat in a protocol similar to IMerge have struggled to show an HIE rate of greater than 50%.

Lastly, patients had a mean relative reduction of transfusion burden from baseline of 68%, meaning that across all patients, regardless of whether they achieved an 8-week TI, imetelstat treatment resulted in a mean reduction of 68% in the number of units transfused. In our market research, physicians who treat MDS patients value such meaningful reductions in transfusion burden because of the reduction in cost and improvements in quality of life associated with reducing transfusions to this degree.

To put these results in further context, I'd like to say a few words about the data presented at ASH in December from the MEDALIST trial with luspatercept, which was a Phase III clinical trial, and compare those -- the data that I just described for imetelstat-treated patients in the Phase II portion of IMerge.

The low-risk MDS patients studied in MEDALIST had many similarities to those patients studied in IMerge. They've failed ESAs and had become transfusion-dependent. They were non-del(5q) and they were naïve to both lenalidomide and HMAs. However, there was an important distinction. The baseline median number of pretreatment transfusions for the MEDALIST patients with 5 units of packed cells over 8 weeks compared to 8 units over 8 weeks for the IMerge patients. Notably, 29% of the MEDALIST patients had a baseline transfusion burden of less than 4 units per 8 weeks. Those patients would not have been eligible for our IMerge trial, where we required a transfusion burden of greater than or equal to 4 units over 8 weeks.

When we look at the efficacy results for the 2 drugs and the 2 studies, the overall 8-week TI rates were quite similar, 37% from imetelstat-treated patients and 38% from luspatercept. However, upon further analysis of the data from the ASH presentation, in the luspatercept patients with a transfusion burden of greater than or equal to 4 units per 8 weeks, that is the population with a baseline transfusion burden consistent with that of the imetelstat patients in IMerge, the 8-week TI rate declined from 38% to approximately 20%.

Based on these data from MEDALIST, we expect that luspatercept, which has a relatively benign adverse effect profile, is likely to be used predominantly in patients with low transfusion burdens. In contrast, the Phase III portion of IMerge will continue to enroll only patients who have a transfusion burden of at least 4 units of packed cells per 8 weeks.

In conclusion, the efficacy results from the Phase II portion of IMerge presented at ASH showed clinical benefit, including in patients with high transfusion burdens, and suggest that imetelstat has a potentially important role to play in transfusion-dependent, lower-risk MDS.

As of the October 26, 2018, data cutoff for the IMerge ASH presentation, the median duration of transfusion independence had not been reached. Since there are still a few handfuls of patients continuing on treatment in the Phase II portion of IMerge, we expect more mature data to be available in 2019 and anticipate submitting such data for presentation at a future medical conference.

Another objective in 2019 is to outline a decision regarding the potential for late-stage development of imetelstat in MF by the end of the third quarter. While the data from the Phase II IMerge clinical trial, including new overall survival data presented at ASH in December, suggest a meaningful survival outcome in relapsed/refractory MF patients, the potential clinical path forward is yet to be determined. The ASH presentation reported that median OS for the 9.4 milligram per kilogram dosing arm was 29.9 months in a poor-prognosis relapsed/refractory patient population where there are currently no approved treatments today. Other observational studies of similar patient populations at academic medical centers published recently in medical literature have reported median OS ranges of approximately 12 to 14 months after failure of or discontinuation from ruxolitinib.

Our decision whether to continue late-stage development in MF will be influenced by our assessment of what would likely be required to achieve clinical success in regulatory approval, including the cost and duration of any potential clinical trials. To inform this assessment, we will conduct discussions with key opinion leaders over the coming months, and we expect discussions with regulatory authorities to begin after the IND is transferred back to Geron.

A key organizational objective in 2019 is to build our development team by recruiting senior personnel with late-stage hematology-oncology expertise. There are 3 core reasons for doing this. The first is to provide for outstanding execution of the Phase III clinical trial in lower-risk MDS. This includes full engagement with key opinion leaders and clinical investigators who will form an influential group of supporters as we near commercialization.

The second is having the organizational expertise and capacity to allow us to maximize imetelstat's value by evaluating potential additional indications, including MF and perhaps other heme malignancies in the future. The third is that having in-house scientific and clinical capabilities enables us to evaluate, attract and develop additional hematology-oncology assets that can be added to our franchise in the future.

Our plans to open an office in Northern New Jersey should be very helpful in recruiting senior personnel with late-stage hematology-oncology clinical drug development expertise as well as enhancing efficient support for global clinical trials, including the many European sites we will have for the Phase III IMerge trial.

In summary, we look forward to 2019 being a pivotal year for the future of both imetelstat and Geron. We believe we're firmly on the path to create value for patients and investors alike. So with that, we'd like to answer your questions, and I'll turn the call back over to our operator.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from Chad Messer with Needham & Company.

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Chad Jason Messer, Needham & Company, LLC, Research Division - Senior Analyst [2]

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Just a couple for me. First, on this more mature MDS data, mentioned median transfusion independence wasn't reached and kind of called out, maybe we could get that. Wondering if you could discuss what you think a good readout on that would be. And also, anything else to look for in that more mature data set? Any kind of subsets or any other analyses that we might keep our eye open for?

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [3]

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Sure. Thanks, Chad. Well, I think, first of all, the form of the analysis will be very similar to that which we did -- which was presented at ASH. That's pretty much quite a comprehensive evaluation of any drug being developed in lower-risk MDS. I don't think we're going to really change from that. It will also offer the opportunity to do a comparison as, in particular, the patients who are involved in the second cohort, who are enrolled in the second cohort, continue to mature into the window of time that we expect to see potential efficacy outcomes. So I think the main thing to be looking for are really all of the efficacy outcomes, which include not only median transfusion independence, et cetera, but also 8-week TI, 24-week TI, HIE and other classic measurements. Of course, there will be an update on safety as well.

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Chad Jason Messer, Needham & Company, LLC, Research Division - Senior Analyst [4]

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Okay. And then you talked about potentially exploring other indications. Wondering if it were possible for you to expand on that a bit more. I know in the past, Chip, we've discussed AML as a possibility on that list. Just want to hear your thoughts on that or for any other particular myeloid malignancies for imetelstat.

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [5]

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Sure. Well, as you know, we've actually seen activity in all of the myeloid heme malignancies that have actually been studied, although to more or less degree according to the size of the study, et cetera. So we obviously presented ET, and those results were in the back-to-back paper with -- from Dr. Tefferi on MF in the journal in 2015. We've just talked about MDS and a further follow-on for MF.

So the other big indication that remains is, as we say, Chad, is AML. AML is a complex disease. It's frankly difficult to treat. And so we will be doing some work, for sure, in assessing where a drug like imetelstat, with its mechanism of action, might best be positioned within the treatment paradigm for AML. I don't think we're ready to discuss that yet or discuss the type of studies, if any, that might occur. But I think there is sufficient -- the sufficient number of preclinical studies and other indications as well as this sort of broad-brush activity in kissing cousin myeloid heme malignancies to sort of justify a deeper dive on that. I don't really have a whole lot more to say about that.

But I'd like to emphasize for everyone listening on the call that even though this is -- that's exciting and that's interesting and potentially of value, really, the first job of this team and our company is to get our Phase III lower-risk MDS clinical trial up and running and then evaluating the potential MF strategy. Once we've achieved that, we can turn our attention to these potential other imetelstat indications and potentially other product candidates actually.

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Chad Jason Messer, Needham & Company, LLC, Research Division - Senior Analyst [6]

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Great. And I absolutely understand what your job one is. We just had plenty of time since the ASH to discuss some of those other things. So I appreciate you getting down into the weeds with me a little bit.

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Operator [7]

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And our next question comes from Julian Harrison with BTIG.

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Julian Reed Harrison, BTIG, LLC, Research Division - Analyst [8]

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This is Julian on for Tom. First off, just curious how we should be thinking about imetelstat for myelofibrosis in the context of the fedratinib NDA acceptance earlier this week.

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [9]

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Sure. Well, first of all, we kind of know about fedratinib, about what you do from reading publications, et cetera, and understanding some of its past history as well as some of the more recent data. I think the way I would put it is that it's a very -- it's a JAK inhibitor, very different mechanism of action. Most of the emphasis has been, as you would expect, on spleen volume reduction, total symptom score, presumably being driven by changes in cytokines associated with inhibition of the JAK-STAT pathway. So I think it is probably best compared to ruxolitinib.

The only other thing I can say that I've gleaned in reading those papers, and I don't have any other inside information of any material as to what's in the submission, et cetera, is to say that, the -- I think that imetelstat's potential survival advantage looks -- still looks extremely attractive. And I think that there will likely be very different potential uses of these various products based on the different mechanisms of action. But beyond that, until we see deeper into how the agency deals with it and perhaps any additional information coming out, I don't think I have a lot more to say about that.

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Julian Reed Harrison, BTIG, LLC, Research Division - Analyst [10]

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Okay, got it. That's helpful. And for my last question, regarding the Phase III portion of IMerge, should we expect an interim readout? And if so, when might that occur, assuming enrollment starts by midyear?

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [11]

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Yes, thanks. No, I don't think you should expect an interim readout. We have a lot of confidence based on a couple of different elements of this -- of the design of this study. And I'd kind of like to perhaps comment about that. The data from the Phase II, which we just described, is really awfully strong from our perspective. The Phase III trial, we use the same patient population, same efficacy endpoints and the same dosing regimens as Phase II. And it has a Phase III design that's based on interactions of [Phase III] regulators. So I don't think we feel the need right now to do an interim analysis to check for how things are tracking or any of the usual reasons that one would do an interim analysis. So that's not in our plan as it stands today.

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Operator [12]

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And our next question comes from George Zavoico with B. Riley FBR.

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George B. Zavoico, B. Riley FBR, Inc., Research Division - Analyst [13]

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I have a question about luspatercept -- because it's possible that by the time your trial starts or certainly maybe halfway through or partway through, luspatercept might be approved and marketed. How do you see that perhaps interfering, if you will, in any way, with the conduct and execution of your Phase III trial?

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [14]

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George, as far as I know, the -- I don't think we expect luspatercept approvals before we would start our Phase III. I'm not even sure, to be honest with you, when or if the NDA's been filed. I don't think it's been filed yet, but...

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Olivia Kyusuk Bloom, Geron Corporation - Executive VP of Finance, CFO & Treasurer [15]

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April 2019.

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [16]

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April 2019 is when it's going to be announced. I guess, that Celgene plans to file it. So I don't think that will interfere with our study. They'll presumably, while reviewing the bulk of the enrollments, luspatercept, even if it gets a very quick review, et cetera, should not -- I would not expect it to be available during the bulk of that enrollment.

I think secondarily, the more important one is that at least so far from what we can see, the 2 drugs really are -- I don't know where they're aimed. I'm not going to speak for Celgene in that regard, but they seem to have a different profile. Obviously, there are very different mechanisms of action. And I think our perspective is that the patients, who we've certainly gotten plenty of in our Phase II and expect plenty of in our Phase III which would be higher transfusion burden patients. Remember, we have, on average, 8 units per 8 weeks of transfusion -- of pretreatment transfusion burden compared to, a lower number, 5 for luspatercept MEDALIST patients -- clearly, we're probably going to end up with a somewhat different patient population.

So -- and by the way, on the other side, luspatercept clinical, the safety profile is pretty benign. And so I wouldn't be surprised to see clinicians being more interested in luspatercept earlier and maybe the patients who are difficult to treat, we may end up getting those. Whatever the case may be, I see the 2 drugs -- we've always seen the 2 drugs sharing the market. And I don't see anything different to suggest that, that will be true in the future. I think we will have enthusiastic investigator support and patient support of Phase III.

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George B. Zavoico, B. Riley FBR, Inc., Research Division - Analyst [17]

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Okay. That's great to hear. That's great to hear. And finally, for the IND, you mentioned about manufacturing. Is the -- does Janssen have some imetelstat in stock to pass over to you, or do you have to still make the stuff for -- make it for the Phase III trial?

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [18]

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Yes. No, we have the drug ready to go, obviously. The imetelstat supply chain has been cranking away, and we do -- we are able to access drug made at Janssen, but we will need to bring that supply chain fully back under our control as part of the transition. And that's actually -- and then we have to make drug beyond that to support future uses and perhaps -- so I think that the point of the story is that, that's got a longer tail on the transition than some of the purely clinical and regulatory items. And that was always contemplated in the agreement that we had with Janssen. So this is really just a reflection of what we anticipated in the event that Janssen did not continue development, and that's pretty much going according to plan.

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Operator [19]

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And I'm showing no further questions at this time. I'd like to turn the call back to Dr. Scarlett for any closing remarks.

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John A. Scarlett, Geron Corporation - CEO, President & Chairman of the Board [20]

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Well, thanks, everybody, for joining us today, and we look forward to sharing the achievement of several objectives throughout the coming year with you. Thanks a lot, and have a good day. Bye.

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Operator [21]

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Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.