Q3 2026 Geron Earnings Conference Call - GERON CORP

Financial Performance:

• Total net product revenue for Q3 2026 was $60.1 million, a 27% increase year-over-year (vs. $47.2 million in Q3 2025) and a 5% quarter-over-quarter increase.
• Gross-to-net deductions improved to 19.3% in Q3 2026 from 21.6% in the prior year period.
• Operating expenses decreased 9% year-to-date compared to 2025, driven by workforce reductions; total operating expenses for Q3 2026 were $48.3 million versus $60.1 million in Q3 2025.
• Research and development expenses for Q3 2026 were $12.7 million, down from $21.1 million in Q3 2025, due to lower clinical, CMC, and headcount costs.
• Cash, cash equivalents, restricted cash, and marketable securities totaled $339 million as of September 30, 2026.
• Full-year 2026 net revenue guidance reiterated at $220 million to $240 million, with management expecting results at the mid-to-high end of the range.
• Full-year 2026 total operating expense guidance lowered to $220 million to $230 million (previously $230 million to $240 million).

Guidance and Future Outlook:

• Management maintains confidence in a "long-term growth runway" for Rytello in the U.S., driven by consistent quarter-over-quarter demand growth (four consecutive quarters).
• Europe commercialization strategy involves a "gated launch" starting in Germany by end of 2026, followed by France in 2027, preserving pricing integrity and flexibility for future partnerships.
• Future operating expenses expected to increase next year to support maturing Europe strategy and post-marketing clinical commitments, despite current efficiency gains.
• Strategic focus includes pursuing business development (BD) opportunities to build a "leading hematology company," specifically targeting assets with potential peak sales in the millions to support a "string of pearls" approach.
• Upcoming scientific milestones include the 68th ASH Annual Meeting in December to present new data on low-risk MDS and other hematologic diseases.

Business Segments and Product Lines:

• Rytello (Imetelstat): Primary commercial focus for low-risk myelodysplastic syndromes (MDS); prescribing accounts expanded to over 1,700, predominantly in community practices.
• Prescribing Trends: Demand grew 10% quarter-over-quarter; 36% of patient starts are in first or second-line settings.
• IMPACT-MS Trial: Discontinued Phase III trial evaluating imetelstat for relapsed/refractory myelofibrosis following an independent Data Monitoring Committee recommendation that the trial would not meet its primary endpoint of overall survival.
• Commercial Infrastructure: Maintained a lean operational model in the U.S. while establishing a flexible European entry strategy without full infrastructure investment in each market.

Market and Competitive Landscape:

• Target Market: Addresses unmet needs in low-risk MDS, a patient population of approximately 8,000 eligible for second-line therapy in the U.S.
• Global Market Dynamics: European markets show less entrenched use of hypomethylating agents (HMAs) compared to the U.S., potentially offering different adoption pathways; older demographic average in Europe supports demand.
• Competitive Positioning: Differentiated by single-indication orphan drug status, which aids reimbursement scoring (particularly in Germany), unlike competitors with multiple indications (e.g., Rockrazol).
• Market Share Strategy: Focus on accelerating adoption in community settings where thousands of patients remain untreated.

Risks and Challenges:

• Clinical Discontinuation: The halt of the IMPACT-MS trial removes a potential future indication, though no new safety signals were observed, and data will be unblinded and analyzed.
• Commercial Execution: Reliance on the success of the gated European launch and maintaining pricing integrity without a full local commercial footprint in every territory.
• Operational Efficiency: Continued need to balance cost reductions from workforce reductions with necessary investments in CMC and post-marketing commitments.
• Forward-Looking Uncertainties: Standard risks associated with clinical trials, regulatory approvals, and the ability to execute business development strategies.

Management Commentary and Tone:

• Tone: Confident and disciplined; leadership expressed strong satisfaction with consistent quarter-over-quarter growth and successful cost control measures.
• Strategic Clarity: Emphasized a shift from R&D-heavy speculation on MF to a capital-efficient commercialization of Rytello, using the strong balance sheet to pursue strategic acquisitions.
• Operational Focus: Management highlighted "financial discipline" and "intentional investments" as key pillars for sustaining long-term value creation.

Analyst Questions and Answers:

• OPEX Outlook: Asked about future operating expense expectations; CFO confirmed OPEX will remain steady through 2026 but is expected to increase next year due to Europe market expansion and clinical post-marketing trials.
• Growth Trajectory: Asked if growth rates could accelerate; Management reiterated that the strategy aims for consistent, sustainable quarter-over-quarter growth rather than a sharp inflection point, citing the large addressable market.
• Business Development Criteria: Asked about specific BD targets; CEO clarified interest in hematologic/oncology assets suitable for the community-centric sales team, targeting assets with millions in peak sales potential rather than blockbuster multi-billion dollar products.
• Europe Market Strategy: Asked about differences in disease management in Europe vs. the U.S.; Management noted lower HMA use in Europe and significant unmet need in the RS-negative population, supporting the selective market entry strategy.
• Inventory Levels: Confirmed inventory levels remain within the standard 2-to-4 week guidance range.

Other Key Points:

• Regulatory Milestones: Noted the exclusion of orphan drugs like Rytello from the CMS GLOBE model, enhancing global pricing and access opportunities.
• Awards: Rytello was nominated for the Pre-Dallium USA Award for Best Product for Orphan-Derived Diseases.
• Real-World Evidence: New presentations highlighted hemoglobin improvements in community oncology settings, supporting the drug's differentiated clinical profile and durability.
• Data Analysis: Management is committed to fully unblinding and analyzing the rich dataset from the discontinued IMPACT-MS trial to inform future research.