Geron 2010 third quarter revenue increases from $494,000 to $546,000

Geron CorporationOct 29 2010

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

For the third quarter of 2010, the company reported net loss applicable to common stockholders of $18.3 million, or $(0.19) per share, compared to $15.2 million, or $(0.17) per share, for the comparable 2009 period. Net loss applicable to common stockholders for the first nine months of 2010 was $52.0 million, or $(0.54) per share, compared to $52.0 million, or $(0.59) per share, for the comparable 2009 period.

Revenues for the third quarter of 2010 were $546,000, compared to $494,000 for the comparable 2009 period. Revenues for the first nine months of 2010 were $2.5 million, compared to $1.1 million for the comparable 2009 period. Revenues for the third quarter and year-to-date periods of 2010 and 2009 reflect funding under collaboration agreements and royalty and license fee revenues.

Total operating expenses for the third quarter of 2010 were $18.7 million, compared to $16.9 million for the comparable 2009 period. Research and development expenses for the third quarter of 2010 were $13.7 million, compared to $13.4 million for the comparable 2009 period. Research and development expenses increased primarily as a net result of higher costs related to clinical trials and preclinical toxicology studies, partially offset by reduced manufacturing costs for GRNVAC1. In the 2010 third quarter, additional costs were incurred for the start up of the Phase 2 clinical trial for imetelstat in non-small cell lung cancer, start up of the Phase 1 clinical trial for GRNOPC1in spinal cord injury and pre-IND enabling studies for GRNCM1. With the completion of patient enrollment for the Phase 2 AML trial, production of GRNVAC1 has ceased since January 2010. General and administrative expenses for the third quarter of 2010 were $5.0 million, compared to $3.5 million for the comparable 2009 period. The increase in general and administrative expenses was primarily due to higher non-cash compensation expense associated with stock-based awards and increased legal and consulting costs.

Total operating expenses for the first nine months of 2010 were $54.0 million, compared to $53.0 million for the comparable 2009 period. Research and development expenses for the first nine months of 2010 were $40.7 million, compared to $42.3 million for the comparable 2009 period. Overall research and development expenses decreased in 2010 as a net result of reduced manufacturing costs for GRNVAC1, partially offset by higher non-cash compensation expense associated with stock-based awards. General and administrative expenses for the first nine months of 2010 were $13.4 million, compared to $10.7 million for the comparable 2009 period. The increase in general and administrative expenses was primarily the result of higher non-cash compensation expense associated with stock-based awards and increased legal and consulting costs.

Third Quarter 2010 Highlights:

• The activities of TA Therapeutics, the joint venture with Hong Kong University of Science and Technology (HKUST), are being fully consolidated into Geron. Telomerase activator drug candidates have been advanced into early efficacy studies, including animal models of idiopathic pulmonary fibrosis (IPF) and in vitro studies employing immune cells from HIV patients. Geron plans to continue both efficacy and safety studies in order to advance a compound to human trials.
• The first patient was enrolled in a randomized Phase 2 clinical trial of the telomerase inhibitor drug, imetelstat (GRN163L) for non-small cell lung cancer. The multi-center trial tests the efficacy and safety of imetelstat in combination with standard of care versus standard of care alone.
• The U.S. Food and Drug Administration (FDA) lifted the clinical hold placed on Geron's Investigational New Drug (IND) application for the Phase 1 clinical trial of GRNOPC1 in patients with acute spinal cord injury.
• A collaboration was established with researchers at University Campus Suffolk (UCS) in the U.K. to develop human embryonic stem cell (hESC)-derived chondrocytes for the treatment of cartilage damage and joint disease. This collaboration is being jointly funded by Geron and with U.K. grants. Geron has exclusive rights to the technology for therapeutic applications.

Events Subsequent to Q3 2010

• GE Healthcare launched the first human cellular assay product, human cardiomyocytes or heart muscle cells, for testing potential cardiac toxicity of candidate drug compounds in development. The first commercial sale of this product occurred in October 2010, triggering a milestone payment to Geron.

• The first patient was enrolled in the Phase 1 clinical trial of hESC-derived oligodendrocyte progenitor cells, GRNOPC1. The primary objective of this Phase 1 study is to assess the safety and tolerability of GRNOPC1 in patients with "complete" American Spinal Injury Association (ASIA) Impairment Scale grade A thoracic spinal cord injuries.