Geron second-quarter net loss decreases to $17.0 million

Jul 30 2010

Geron Corporation (Nasdaq:GERN) today reported financial results for the three and six months ended June 30, 2010.

For the second quarter of 2010, the company reported a net loss applicable to common stockholders of $17.0 million, or $(0.18) per share, compared to $19.9 million, or $(0.23) per share, for the comparable 2009 period. Net loss applicable to common stockholders for the first six months of 2010 was $33.7 million, or $(0.35) per share, compared to $36.8 million or $(0.43) per share, for the comparable 2009 period. The company ended the quarter with $156.0 million in cash and investments.

Revenues for the second quarter of 2010 were $1.0 million, compared to $183,000 for the comparable 2009 period. Revenues for the first six months of 2010 were $1.9 million, compared to $627,000 for the comparable 2009 period. Revenues for the second quarter and year to date period of 2010 reflect funding from collaboration agreements and royalty and license fee revenues under various agreements. Revenues for the second quarter and year to date period of 2009 reflected royalty and license fee revenues under various license agreements.

Interest and other income for the second quarter of 2010 amounted to $194,000, compared to $363,000 for the comparable 2009 period. Interest and other income for the first six months of 2010 was $396,000, compared to $888,000 for the comparable 2009 period which reflects the lower interest rate environment. The company has not incurred any impairment charges on its marketable debt securities portfolio.

Total operating expenses for the second quarter of 2010 were $17.9 million, compared to $18.9 million for the comparable 2009 period. Research and development expenses for the second quarter of 2010 were $13.4 million, compared to $15.1 million for the comparable 2009 period. General and administrative expenses for the second quarter of 2010 were $4.5 million, compared to $3.8 million for the comparable 2009 period.

Total operating expenses for the first six months of 2010 were $35.3 million, compared to $36.1 million for the comparable 2009 period. Research and development expenses for the first six months of 2010 were $26.9 million, compared to $28.9 million for the comparable 2009 period. General and administrative expenses for the first six months of 2010 were $8.3 million, compared to $7.2 million for the comparable 2009 period.

Research and development expenses decreased for the three and six month periods ending June 30, 2010, compared to the same periods in 2009, primarily as a result of reduced manufacturing costs associated with the completion of patient enrollment for the GRNVAC1 Phase 2 trial and lower preclinical study costs. General and administrative expenses increased for the three and six month periods ending June 30, 2010, compared to the same periods in 2009, primarily due to increased consulting costs and higher non-cash stock-based compensation expense.

Second Quarter 2010 Highlights:

• Five presentations were given on Geron's telomerase inhibitor, imetelstat sodium (GRN163L), at the American Association for Cancer Research annual meeting. The presentations highlighted the importance of telomerase as a cancer stem cell target and the broad anti-cancer stem cell properties of imetelstat in preclinical models of multiple tumor types.
• The Board of Patent Appeals and Interferences of the U.S. Patent Office reversed an earlier decision that had upheld the claims of the patents assigned to the Wisconsin Alumni Research Foundation (WARF) and licensed to Geron. WARF will have an opportunity to continue examination of the claims in the patent at the examination level of the Patent Office.
• Geron's collaborator, Dr. Michael Laflamme from the University of Washington Medical School, presented preclinical study data at the 31st Annual Scientific Sessions of the Heart Rhythm Society showing that GRNCM1 does not cause cardiac arrhythmias after transplantation into a rodent model of chronic heart damage. GRNCM1 is being developed for the treatment of congestive heart failure and myocardial infarction.
• Geron's collaborator, Dr. Claude Jourdan Le Saux from the University of Texas Health Science Center at San Antonio, presented positive data at the American Thoracic Society 2010 International Conference on the small molecule telomerase activator, TAT153, in an animal model of idiopathic pulmonary fibrosis. The data show that administration of TAT153 increased telomerase activity in the lung tissue, reduced inflammation, preserved functional lung tissue, slowed disease progression and attenuated loss of pulmonary function.
• Clinical data from the Phase 1 trial of imetelstat (GRN163L) in combination with paclitaxel and bevacizumab in patients with breast cancer was presented at the American Society of Clinical Oncology annual meeting. The data show good tolerability and exposures of the drug, which exceeds levels that have been associated with tumor inhibition in several models of human cancers.
• Hoyoung Huh, M.D., Ph.D. and Robert J. Spiegel, M.D., FACP were appointed to Geron's board of directors.

Subsequent Events to June 30, 2010

• In July 2010, the company announced that the activities of TA Therapeutics, Ltd., the joint venture with Hong Kong University of Science and Technology, are being fully consolidated into Geron.
• In July 2010, the first patient was enrolled into Geron's randomized Phase 2 clinical trial of imetelstat as maintenance therapy following platinum-based induction therapy for patients with non-small cell lung cancer.