Hey, good morning, everyone. Welcome to our first day of the Cantor Healthcare Conference. My name is Li Watsek, a biotech analyst here at Cantor. It is my great pleasure to have our next fireside chat with Geron. I am delighted to have CEO Harout and CMO Joe joining me for the discussion. I would love to turn it over to Harout maybe to give us a high-level overview of where you are with the story, what investors should be focused on over the next 12 months.
Yeah. First, thank you, Li, for you, and for Cantor for the invitation, and for starting us off at the conference today in the morning. We at Geron, we are very excited to be here because we do believe we have something special going on. We are now a commercial stage company, which is always good to be a company that is actually helping patients and making cash at the same time. We just reported, a few weeks ago, our Q2 earnings as well. Now we are continuing to grow RYTELO, our leading telomerase inhibitor. We are actually up 24% this year in the first half of the year, while being financially disciplined, reducing our operating expenses by 4%. So 24% up, 4% down, and we will continue that trend.
That is kind of what we are looking at going forward is we have an asset in lower-risk MDS that is helping more and more patients in the U.S. We also know there are so many thousands of patients out there, so that is kind of what we are focused on in the next while. The last thing I would say over there in our opening is, we also confirmed that our full year outlook in terms of net revenue, we see it in the mid to high end of our guidance, meaning $230 million- $240 million. So RYTELO is becoming a substantial asset, and we do believe it has significant growth left in it, and we are just getting started.
That is great. So Harout, maybe going back to your guidance, right? $220 million- $240 million, and you guys feel pretty confident that you can land in the mid to high end. When we look at consensus right now, it is about $236 million. I guess, right now we are well into Q3. How confident that you guys feel about you can achieve that guidance and any seasonality, especially during the summer months, that we should keep in mind?
Sure. We delivered $57.5 million of net revenue in Q2, and that was up almost $5 million from the quarter before. Now we are seeing three quarters of growth consecutively. We feel very good about the guidance that we gave in the beginning of the year in January, and at that time, we were asked how confident we were. We are like, "Let's see Q1." Q1 came, and we were in good shape. Q2 now came, we are in good shape. Obviously, we do not take these things for granted. Every day the team wakes up needs to make sure that we are out there educating the market in terms of the benefits that RYTELO can bring to patients. But we feel pretty good about our outlook for this year. That is why we have upgraded our language to say between mid to high end of that guidance.
It sounds like nothing you have seen so far would make you have a pause about whether you will be able to achieve your guidance.
Not really.
Okay.
For us, it is really about making sure that every day we are anticipating as well what can happen.
Yeah.
We are in the second year of launch.
Yeah
A lot of the seasonality, a lot of the things that are unanticipated,
typically will happen more in the first half year,
because you're kind of making your transition, or we were making our transition from a clinical stage company where we were for the last 20 plus years.
To a commercial place. There is that cycle, but now we are in the second year. Summer is always in the summer.
Yeah.
Christmas is always in December.
Yeah.
Some of these things we can anticipate, but of course, we are also prepared for things that can happen because this is business, and things do happen. But we have a very good team that is able to, one, anticipate, but also deal rapidly with whatever can happen and keep that boat going and that growth going.
I wanted to talk a little bit about the growth trajectory that you guys are seeing. Obviously, you had a very good Q2, as you said. See very nice volume growth, and it seems like that was driven by more community use and earlier lines of therapy, so that is all good. Then you also said maybe going forward we should think about maybe depth, not breadth, what drive the growth going forward. Is that sort of function of just where you are with the launch and where are you seeing in terms of penetrating new accounts?
Yeah, it's a great question, Li. If you look at the trajectory of any launch in hematology, oncology, but specifically in hematology, where it's more concentrated, first of all, you really need the Academic Medical Centers to get on board.
That was one area where Joe and his team, and our medical team, has been very focused on in the beginning because as you know, a lot of our clinical trials were not conducted in the U.S. So, we didn't really have a lot of big advocates who have used RYTELO within the clinical trial program before launch. So what happened, we had to educate and work and engage after the launch. So that was phase one, where we really focused on the AMCs. But to your point, lower-risk MDS is a community disease. 80% of the patients actually are seen and treated in the community, especially the patients that we're targeting, which is the second-line patients, are still predominantly in the community. Academic Medical Centers really see the much more tougher cases.
So we really need to win in the community, and that's where the educational. We've unleashed a lot of programs over there and really focused on the especially high-volume community centers. That's where what we're saying is, yes, of course, we need some more breadth.
Yeah.
We need to report on that. So at every quarter, we continue to report on the new accounts that have come on board. But we also see that now it's time that the ones who are using it, using it in the right patient population, getting the benefit of it, now they continue to use it in other patients that they can help as well. That's the focus area. So that's where the depth piece comes in.
That is kind of how we see our trajectory from the AMCs in the beginning to shift to the community, focus on community high volume, and now really driving depth in those high-volume accounts.
Great. I think another element for our growth that you guys talked about is basically moving patients from later line into front line, second line. It is nice to see that you have higher mix of earlier line use over time. I guess for you, Harout, it seems like you guys want to really focus on increasing the second line use and really focus your sales force there. On the other hand, is there any risk of losing more later line patients, and how does that translate into net revenue growth over time? I understand longer treatment duration in earlier line is better, but on the other hand, do you really want to lose the later line patients?
Yeah. Obviously, we want to help any patient that we can.
Yeah.
Having said that, our label is in the second line.
The NCCN guidelines that have been recently updated are supporting us in the second line. Now even more with us being a preferred agent over there ahead of even some classical other areas that have been used, like HMAs and other things. We really want to focus on where we can help the patients the most, which is in line with our label, in line with the NCCN guidelines. As you know, Li, in oncology, it's typical that when you launch a new therapy, a lot of patients in later lines that need new options and physicians will try them out. That part is not unique for RYTELO. That happens across every launch, at least the ones I've seen. The key is really to move faster.
To where you're actually approved, so that patients can get the benefit earlier and stay longer, right?
Yeah.
Because as you know, patients in second line, their duration will be longer than a third line. Third line will be longer than a second line. We think that's the right approach, and that's why we report on a quarterly basis our advancement of first-line, second-line patients. Now more than a third of our patients are coming from the earlier lines.
And we like to see that, and we will continue reporting on that. That is really where we want to win in the second-line patient population, where our data is the strongest, it is most durable, and that is where we are all aligned on helping those patients. Anybody is going to try us off in later lines, it will happen organically. That is not where we are going to be focusing our efforts and our teams' efforts.
Okay, that makes sense. As you guys shift more to the community setting, how should we think about gross to net discount over time? I know you guys have provided some guidance. Should we think over time that discount might increase, or are we at sort of a steady state?
Yeah. I wish I could say it will be a steady state. It typically isn't, especially in diseases of the elderly, like the ones that we are playing in. We have given our year guidance in that mid 20s or so we have that visibility for now. Of course, going forward, we will also update the market whenever we see something different as well. For us now, it is all about volume growth. Obviously, the more volume we grow, the more that gross to net can happen. But I think where we are is very appropriate for therapies of that nature. We will report if we have anything new on that front.
Mm-hmm. Just look at your capital spend right now. If we just do the math, looking at the revenue guidance and your OPEX, looks like you guys are very close to profitability by the end of the year. You guys have been very disciplined when it comes to spending. So Harout, what do you need to see to provide that guidance?
Yeah.
Seems like you guys are in striking distance.
Yeah, we get that question a lot, and as my CFO would say, we see a path to profitability, which is always a good thing. The numbers tell the story over there, Li. We have given guidance on our top line, $220 million-$240 million net revenue, and we came up and updated that to say mid to high levels, so $230 million-$240 million, just for simplicity. Then on the operating expenses, we've said also $230 million-$240 million.
Right? Beginning of the year. It doesn't take a genius to realize, oh, the $230 million-$240 million are the same numbers. We definitely see a path to profitability, which is great. At the same time, we are building a company. We are building a company. For us, Geron is very ripe for writing the next chapter of its growth. RYTELO in lower-risk MDS is now growing very nicely. We have the MF shot at one point. That we will find out as well, if we're able to help more patients with it. Of course, with more than $327 million of cash on our balance sheet, with the financial discipline we've added, with the growth of the asset, it really excites us that we can actually look beyond as well, RYTELO, in the longer term, and see, can we dream of a company that has multiple assets?
And has multiple shots at goal? Yes, we do see the path to profitability, but we also see a path for us to build a business on very solid grounds with RYTELO, but then also beyond.
Just stay with RYTELO for a little bit. We talk about the USPs.
You guys have talked about you may figure out your European strategy there maybe by the end of the year. Can you give us an update on where you are with that? Then just maybe run through some scenarios for us, what could that be?
Yeah, we are fortunate that we have global rights for RYTELO. It's not just in-
Yeah
the U.S., but also ex-U.S. And we've done our phase III trials predominantly in Europe, actually. So we have even more advocates in Europe who have been part of the clinical program, who've seen the benefit of RYTELO in their clinical setting. And we get calls quite often in terms of when will that be available. As you know, we also have EMA approval. So a lot of these key regulatory milestones, we actually have them. The way we think about it, Li, is RYTELO needs to be everywhere in the world, helping patients around the world. We don't necessarily need to be everywhere in the world.
Yeah.
Whatever is the right path and the optimal path, we'll do it. Particularly to your question about Europe, what we have said is we're now looking at what are some of our optionality.
In areas outside of the U.S., and coming back to the market before end of year and updating on what can that be. And the optionality is really not something hidden. It can be either partnerships and/or certain targeted ways that we can do certain things. What we're not going to be doing is the old classical model of putting large teams in Germany and large teams in all these companies. That's not really for us. But there are other models as well emerging in the marketplace where you can partner, especially with contract sales organizations and other areas which are available for us as well. If partnerships are the way to go, then that's something we'll pursue. If there's some other, more innovative ways that we can do-
then that's what we will do as well. Or it can be a mix of all these things. We will be giving the team some time to plan for these things, to have the conversations, and we do believe by end of year, we should be in a place where we can update the market on how do we see us as well helping patients next year.
That's great. Given there are some pricing dynamic, policy dynamic in Europe, I guess for you guys, what do you think the contribution of revenue would be from Europe relative to the U.S.?
Yeah, obviously we have to take all these into account in terms of the. It's an evolving world, right?
Yeah.
MFN is here. Every day we learn something new about it. That's something where we want to make sure that we're part of that conversation. Obviously, the last thing we want to do is, in the spirit of helping more patients, hurt ourselves.
Over here, We want to make sure that everything we are doing is gated. Whenever we hit any stumble, we always have the right to reverse course. That's where the careful thinking comes in, Li. We've seen the market, U.S. versus ex-U.S., over time, especially in specialty areas like what we're talking about. It used to be 50/50, right?
The contribution at one point. Then it became 60/40 to the U.S., 70/30.
Still, ex-U.S., I think is still a very important opportunity.
Yeah
It is thousands of patients. We are not just talking Europe. We are talking China, Japan, Latin America, Middle East. There are so many patients who can benefit from RYTELO. So our commitment is to ensure we are not giving up on the conversation. We are always part of the conversation, but we also are wide-eyed in terms of implications.
Making sure that we are moving in a carefully choreographed way, preserving our optionality, and that is why we have said by end of year. We could have always done a fast deal, but that is not what we are aiming for. We want to win on the long term.
Mm-hmm. It seems like there is a growth opportunity in ex-U.S. quite meaningfully as well.
Well, we know from our friends at BMS,
Yeah
They report on luspatercept, and I think the last report, at least the ones I have seen, was about $2.5 billion of sales for luspatercept. About $500 million of that was coming from ex-U.S., if I am not mistaken.
It is still a significant number out there, in terms of what that can look like, both in terms of what is the potential in lower-risk MDS.
but also the fact that ex-U.S. is a significant opportunity as well. Obviously, we have to make sure that with the MFN conversation, that is all taken into consideration, but the patients are there. It is not like somehow because there is MFN, lower-risk MDS does not
Yeah
Exist anymore. It just unfortunately does not work that way.
Okay. Very good. I want to switch to the interim OS data readout in myelofibrosis by the end of the year. I know you guys recently made some modification to the event thresholds. Maybe you can tell us a little bit about the reason behind that, so close to the interim.
Yeah. Maybe, Joe, you can comment on our myelofibrosis program overall and what we have recently
Yeah
as well updated the market.
Just to level set, the study was designed in relapsed refractory myelofibrosis patients who have failed JAK inhibitors, with an overall survival as a primary endpoint, which is a unique design in this disease. The study completed enrollment in September of last year. It had started in 2020, and with the anticipated information fraction or the threshold, we wanted to make sure that the discussion that happened with the FDA six years ago are current. So we met with regulators both on the U.S. side and the European side to inquire about their point of view in 2026. In those discussions, we wanted to assess the possibility of approval on the basis of the interim analysis. Our base case, as you know, we have said was the final analysis.
In those discussions, the focus was on the interim analysis, what would be viewed in their eyes as a path to a supplemental NDA. That's why we feel that the adjustment to the information fraction for the interim analysis is at play. We are in discussion with the regulators, and once we finalize that conversation, we'll update the market accordingly.
Okay. I wonder if you guys can run through maybe three outcomes from this interim analysis. I know you mentioned your base case is obviously the study continues to final OS, which I believe will be in 2028?
H2 2028.
2028. There are two other scenarios. I wonder if you can just talk through them.
Again, it's an overall survival endpoint.
Yeah.
Driven by a number of events. We can't control the data. We will deal with the data as it comes. We hope for the benefit of patients, because this is a dismal disease, especially in that stage of the disease, that we can help those patients with a positive trial. Yes, any of those events can happen. The trial can go on without any modification. It can hit futility or it can hit a positive outcome. We will be prepared for any of these outcomes as they come.
Yeah, it's one where Li, if you look at these trials and having done this for quite some time, what we want to make sure is that we're running a world-class dataset, clinical ops, and really engaging with the regulators.
That's one thing which I do commend our team for doing it, is doing this outreach to the agencies, both in the FDA and also on the European side, to really make sure that we're reengaging with them in the year 2026. Because to Joe's point, these trials started in 2020. Of course, just take the FDA, not only the last six years, but last while, it has changed quite a bit. So we need to make sure that we're aligned with the current thinking and anything new that we need to know.
That we have time to react so that we're not having to do that after we're unblinded and things of that nature. So that's why the team has been very proactive in terms of those outreaches. Now the timing of our call was such that we're in the middle of doing that. So that's why the options are all open
because the conversation is ongoing.
Yeah, and I think what Harout said is critical, is we want to have all this conversation behind us before we hit any trigger
where we become unblinded. We want to stay
Yeah
blinded in those conversations to maintain integrity of the study, which is critical for approval.
It seems like you guys have aligned with both U.S. and E.U. regulators on the study.
We're in the process of aligning to make sure that
Oh
Before we are at a point of needing to be unblinded, that we are totally aligned with the regulators because it's a one shot.
Yeah.
We either get it right or we miss it if we don't do it right.
Okay. Sounds like this will be done before you guys unblind the study.
We have to.
Right.
We have to.
Yeah. Okay.
We're pursuing operational excellence across the board.
Yeah. Okay. That makes sense. I know there is a crossover design in the study, and we know crossover can confound OS. Any comment around that?
Yeah. The trial was designed with a buffer, so it did allow patients to cross over, but every patient who crossed over from the control arm to the active arm had to be going through a washout period, and had to also be screened by the clinical monitor at Geron to make sure that it is the appropriate crossover. So especially in that late-stage disease, that limits the number of patients that crossover. Even if we do have patients that do crossover, it does not change the balance of the power of the study. That was designed upfront to make sure that we do not dilute the benefit.
Mm-hmm. Okay, that makes sense. You guys have not disclosed what kind of OS benefit or delta that you would need to see to hit at interim, right?
In recent times, we have not shared
Yeah
Anything related to the statistical plan.
Yeah, okay.
Especially now that we are in discussion with regulators, those are things that we are keeping to ourselves at this point.
Assuming a bold case happens here, how does that change your priority?
Look, that would be a jackpot for us, right? If we are able to help myelofibrosis patients post JAK with an overall survival trigger, right? That is the primary endpoint of the trial. That would be a transformational moment for the company and for that patient community as well. That is clear. We want to make sure that we are building a company longer term with multiple shots at goal. This is a trial that has been going on for multiple years. I have been in these situations before where overall survival, you cannot just bet on that. That is a big bar, high bar. That is why we have shifted our own thinking even in the last few months, from the best case scenario.
That was one of the things which we came out from straight out the door last year and communicated is our base scenario that this trial will continue to mature into H2 2028.
We think that is what it will take for the full events to happen. Again, it is an event-driven trial. We do not know when patients will be having death events, but that is the latest forecast. Why that was importantly is because we wanted to make sure that we really are first focusing on the business that we have today.
which is in lower-risk MDS. We're not just, "Oh, but when we get that one for us.
Yeah
No, no. We have something fantastic today. Let's make sure we're growing it. Let's make sure that we have the financial discipline that gives us optionality that we can fund our myelofibrosis.
We can fund whatever else that needs to come at the same time or after myelofibrosis. That's where we're building that optionality and really making sure that at least internally, we're saying, "Okay, this would take another couple of years at least. Let's make sure that we're focusing on our base business today.
Then we grow over there." These things can take a long time, of course, to maturity. If it does hit positive, obviously it will be transformational. No question about that.
Yeah. In terms of building the growth story over time, Harry, you mentioned, RYTELO is base business for you, but you are also actively looking at some business development opportunities to potentially bring in some good assets. Tell us about what would be, I guess, a sweet spot for you guys, given the resource and given the expertise.
Yeah. It is almost like a tale of two worlds in one way, where the vast majority of the team is really focused on making sure that we are growing RYTELO appropriately in the U.S., making sure that we are having the right conversations ex-U.S.
But also, what is beyond, right? That is where what we build on. So recently, we have announced the newest addition to the executive leadership team in terms of a chief business officer who joined us a few weeks ago. With the financial discipline as well, we have more than $320 million of cash. We just reported that we have not exercised the last two tranches with our Pharmakon debt facility of $125 million, because we do believe that where we are from an operational perspective, we can take care of ourselves.
We would rather have those conversations whenever we build up the company more. So it is a more cautious approach at this point, really making sure that the infrastructure is in place so that we can do diligence when needed. We can actually have the right partnership conversations when needed. So we are moving in that direction step-by-step, but without taking the eye off the ball of really making sure that RYTELO, which has significant growth for many, many years is really taken care of. So it is really a two-pronged approach.
I see. It seems like for you guys in terms of priorities, obviously the base business, making sure it continues to grow is still your top priority.
Absolutely.
But on the other hand, I guess you guys are also looking at or evaluating potential business development opportunities.
Yes. Because, on one side,
Yeah
We want to make sure that we land the myelofibrosis trial appropriately.
Right.
But at the same time, we've put a world-class team in place, especially in the U.S.
in the field, customer-engaging on the medical side, on the field, on the commercial side, obviously. So ideal things would be what else can go in their bags, right?
Those are some of the things that we'll look at. We're not Pfizer or any of the big pharma, so we don't need assets that have to have peak sales of $3 billion or whatever.
Yeah.
For us, there is multiple other assets which are very good that can work for our story as well. So, we'll look at that as well, and we're always open for partnerships. And we have the dry powder for it, which I've been in situations where I didn't have that. So, the fact that we have that is actually a very good thing for us, that if we see something we like, we can exercise on it.
Okay, great. Thank you so much, guys.
Thank you very much.
That's all the time we have.
Perfect. Thank you.
Thank you.
Take care.