Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Geron Corp (GERN, Financial) achieved $28.2 million in Rytelo net product revenue in its first full quarter, exceeding expectations.
- The company has a strong intellectual property position, with exclusivity in the U.S. through August 2037 for Rytelo.
- Geron Corp (GERN) completed a synthetic royalty transaction and a debt financing transaction, generating $250 million in gross proceeds.
- The company has achieved significant payer coverage for Rytelo, with policies covering approximately 70% of U.S. covered lives.
- Geron Corp (GERN) is preparing for potential EU commercialization of Rytelo, with expected approval in the first half of 2025.
Negative Points
- The company faces potential fluctuations in weekly sales data, which may not fully capture internal insights.
- Geron Corp (GERN) is still in the early stages of Rytelo's launch, with potential variability in growth trajectory.
- The company has significant operating expenses, with total operating expenses for the nine months ended September 30, 2024, at $183.1 million.
- There is a dependency on achieving internal revenue projections to reach break-even without additional financing.
- The company is facing competition in the first-line treatment setting from other therapies like luspatercept.
Q & A Highlights
Q: Can you provide insights on how you expect growth cadence to look over the next few quarters, and how your growth assumptions factored into the terms of the royalty deal?
A: Jim Ziegler, Executive Vice President, Chief Commercial Officer, stated that they expect steady, consistent growth across all patient segments, particularly in second line and third line plus patients. Michelle Robertson, Chief Financial Officer, explained that the royalty deal was negotiated using their current internal forecasts, and they are pleased with the competitive terms achieved.
Q: Can you clarify how investors should think about the royalty rate and cap multiplier, and your cash flow expectations?
A: Michelle Robertson noted that the royalty rate is competitive and emphasized the focus on the cap of 1.65 times the closing payment. She mentioned that based on their current plans, they could reach break-even without needing additional financing, maintaining a 12-month cash buffer.
Q: What does "steady growth" mean in terms of patient growth or growth rate, and what portion of patients have previously seen treatment with Revil?
A: Jim Ziegler explained that they expect growth across all patient segments in both academic and community settings. They are seeing uptake and utilization across all patient segments, including first line ESA ineligible, second line, and third line patients.
Q: Can you discuss the initial real-world experience in terms of benefit on transfusion reductions and safety profile?
A: Jim Ziegler stated that real-world experiences are consistent with clinical trials, although it is still early in the launch. He noted that they expect their differentiated product profile to allow them to become standard of care in second line.
Q: Can you elaborate on why the royalty and debt structure was chosen over a simpler equity raise?
A: Michelle Robertson explained that the hybrid structure was chosen for flexibility, allowing them to pay off existing debt and retain more sales during the early launch period. This approach reduces dependency on equity markets and avoids further stock dilution.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
