Geron reports net loss of $16.6M for first-quarter 2010

Geron CorporationApr 29 2010

Geron Corporation (Nasdaq: GERN) today reported financial results for the three months ended March 31, 2010.

For the first quarter of 2010, the company reported operating revenues of $918,000 and operating expenses of $17.4 million, compared to $444,000 and $17.1 million, respectively, for the comparable 2009 period. Net loss for the first quarter of 2010 was $16.6 million, or $(0.18) per share, compared to $16.8 million, or $(0.20) per share, for the comparable 2009 period. The company ended the quarter with $166.5 million in cash and investments.

Revenues for the first quarter of 2010 included funding from collaboration agreements and royalty and license fee revenues under various agreements. Revenues for the first quarter of 2009 reflected royalty and license fee revenues under various license agreements. Interest and other income for the first quarter of 2010 amounted to $202,000, compared to $525,000 for the comparable 2009 period.

Research and development expenses for the first quarter of 2010 were $13.5 million, compared to $13.8 million for the comparable 2009 period. The decrease in research and development expenses primarily reflected lower manufacturing costs for GRNVAC1 due to the completion of patient enrollment for that Phase II clinical trial, offset by increased preclinical study costs for GRNOPC1. The company expects its research and development expenses to increase in the future as it advances imetelstat to Phase II clinical trials. General and administrative expenses for the first quarter of 2010 were $3.9 million, compared to $3.4 million for the comparable 2009 period. The increase in general and administrative expenses was primarily the result of higher legal costs associated with the company's patents and consulting costs.

First Quarter 2010 Highlights:

• Geron published preclinical data in Clinical Cancer Research demonstrating that imetelstat (GRN163L) inhibited telomerase activity and reduced tumor growth rate and size in xenograft models of glioblastoma, and inhibited the activity of glioblastoma stem cells in culture. These preclinical data showed that imetelstat crossed the blood-brain barrier that limits the delivery of most therapeutic drugs to brain tumors.

• Outstanding warrants held by certain institutional investors were exchanged for shares of Geron common stock. In connection with the exchange, the company sold additional shares of common stock for gross proceeds of $10.0 million to the investors at a premium to the then current market price of the company's common stock and issued a call option to the investors to purchase an additional $5.0 million of common stock at the premium price.

• A new collaboration was formed to investigate the therapeutic potential of human embryonic stem cell (hESC)-based product, GRNOPC1, for Alzheimer's disease. The collaboration is being jointly funded by Geron and a University of California Discovery Research and Training Grant.

• Geron scientists and collaborators gave five presentations describing recent data on imetelstat (GRN163L) and highlighted the drug's activity against cancer stem cells at the American Association for Cancer Research (AACR) Special Conference on The Role of Telomeres and Telomerase in Cancer Research. Preclinical data has shown that imetelstat exhibits anti-cancer stem cell activity in nine different human cancers.

• Corning Incorporated launched the Synthemax™ surface, a new synthetic matrix for growing hESCs. The new product was developed under a collaboration and license agreement between Geron and Corning.

• Geron appointed Thomas Hofstaetter, Ph.D. to its board of directors and as a member of the board's compensation committee. The company also announced that Patrick J. Zenner, who has served as a director of the company since July 2001, will retire from the board, effective as of the annual meeting of stockholders on May 19, 2010.