Q3 2019 Earnings Call

Ladies and gentlemen, this is the operator today's conference is scheduled to begin momentarily until that time your lines will again be placed on whole. Thank you for your patience.

Operator: Operator, today's conference is scheduled to begin momentarily. Until that time, your lines will again be placed on hold. Thank you for your patience.

unknown: [inaudible] © BF-WATCH TV 2021, , , , , , , , , , , , , , , , , , , , ,

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the third quarter 2019 Geron Earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Suzanne Masseri. Please go ahead. Thank you

Unknown Attendee: Thank you, Lisa, and good morning, everyone. Thank you for joining us on our third quarter conference call. I am joined today by Dr. John Scarlett, Geron's chairman and chief executive officer, Olivia Bloom, the company's CFO, and Dr. Alexander Rizzo, our chief medical officer. After the market closed yesterday, we announced our third quarter 2019 financial results in a press release. It is available on our website under www.jaron.com slash investors. This morning, management will discuss the information from yesterday's press release. A live webcast of the call will be available on our website and will be archived for 30 days.

Ladies and gentlemen, thank you for standing by and welcome to the third quarter 2019, Geron earnings Conference call. At this time all participants are in a listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During the session you on each press star one on your telephone if you.

Unknown Attendee: Before we begin, Please note that except for statements of historical facts, this presentation and question and answer session contains forward-looking statements made pursuant to the safe harbor provisions of the Private Security Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements include any of the company's plans, expectations, timelines, beliefs, statements of potentiality and projections, and without limitation, those regarding that the top-line results from the Phase 3 portion of eMERGE are expected to be available by mid-year 2022, that there will be an end-of-Phase 2 meeting with the FDA by the end of first quarter 2020, that Geron may potentially develop Imitel Stap or Relapse Refractory MF patients, and that Geron's 2019 operating expenses will be $80 to $85 million.

You require any further assistance please press star zero.

I'd now like the hand, the conference over to your speaker today isn't necessary. Please go ahead.

Thank you Lisa and good morning, everyone.

You for joining us for third quarter conference call I'm joined today by Dr., John Scarlet Gerons, Chairman and Chief Executive Officer, Olivia Bloom, the Companys, CFO and Dr. Alexandra Red, though our chief Medical Officer.

After the market close yesterday, we announced our third quarter 2019th actual results by a press release is available at our website under www Dot German dot com flush investors.

This morning management will discuss the information from yesterday's press release, a live webcast. The call is available on our website and will be archived for 30.

Before we begin.

Please note that except for statements of historical fact, this presentation question answer session <unk> forward looking statements neighbors made pursuant to the safe Harbor provision the private Securities Litigation Reform Act.

Unknown Attendee: All of these forward-looking statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. These risks and uncertainties include, without limitation, those regarding that the company may be unable to overcome all the clinical, safety, efficacy, technical, scientific, operational, manufacturing, and regulatory challenges to enable the top-line results from the Phase 3 portion of eMERGE to be available by mid-year 2020. Regulatory authorities may not permit the further development of Imitalstat on a timely basis or at all, or the company may decide not to develop Imitalstat for relapsed or fractured MS patients.

Investors are cautioned that such forward looking statements include any the company plan expectations timeline lease payments are potentiality your projection and without limitation.

Regarding to there was regarding that the topline results from the Athree portion of emerge are expected to be available I get your 2022.

There will be an end of phase two meetings with yesterday by the end of first quarter 2020.

Sure I may potentially develop intelsat for relapsed refractory patients and that Geron 2019, operating expenses booking $80 million to $85 million. All of these forward looking statements involve risks and uncertainties that could cause actual results to differ materially notes in such forward looking statements.

unknown: And that there may be unexpected operating expenses or events that cause the $80 to $85 million 2019 financial guidance to be revised. Detailed information on the above risks and uncertainties and additional risks, uncertainties, and factors that could cause actual results to differ materially from those in the forward-looking statements according to the heading risk factors in Geron's quarterly report on Form 10-Q for the quarter ended September 30, 2019, filed with the SEC. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made, and the facts and assumptions underlying the forward-looking statements may change. Except as required by law, Geron disclaims any obligation to update these forward-looking statements to reflect future information, events, or circumstances.

Risks and uncertainties include without limitation that was regarding that the company Navy unable to overcome all the clinical safety efficacy technical side.

Additional manufacturing and regulatory challenges and able to topline results from the basic worship emerge to be available by mid year 2022.

Regulatory authorities made I missed the further development of Mtell timely basis aren't all that the company may decide not to develop and relapse refractory an assertion and that there maybe unexpected operating expenses are down the cost. The 80 to 85 million dollar 20, 2019 financial guidance to be reside revised.

He told information on the above risks and uncertainties additional risks uncertainties. The factors that could cause actual results to differ materially NYSE and forward looking statements are under the heading risk factors and drive quarterly report on Form 10-Q quarter ended September 30 to 90 filed with the FCC undue reliance should not be place or the kids.

John A. Scarlett: http://TheBusinessProfessor.com Dr. John Scarlett, Geron's Chairman and CEO

John A. Scarlett: Thanks, Suzanne, and good morning, everyone. JIRM continues to execute on its key 2019 Imitelstat development with the achievement of several important milestones in the past quarter. We assumed full control of all development for Imatelstat by completing the transition of the program back to Geron from Janssen at the end of the third quarter. This means that, in addition to the U.S., we're now the sponsor of both Emerge and Embark in all countries where the trials are being conducted. In August, we opened the Phase 3 eMERGE trial for screening and enrollment, and in October, we announced the first patient had been dosed. More recently, in September, we announced that the FDA granted Fast Track designation to Emmett House.

That's which speak only as of the date, the army and the facts and assumptions underlying the forward looking statements may change, except as required by law churn disclaims any obligation to update.

That's true, but each reformation events or circumstances with that I like to turn the call over to Dr., John Dr., John Scarlet Geron, Chairman and CEO Jeff.

Thanks, and good morning, everyone.

Joe continues to execute on its a key 2019 imetelstat.

With the achievement of several important milestones.

We assumed full control of all the Goldman frame it sounds like they did the transition of the program back to Jerome from chance you have to the third.

This means that in addition to the west where now this.

Urging them.

All countries for controls are being stopped.

In August we opened the phase three emerged over screening interval in October we announced first [laughter] jokes.

More recently in September we announced that the FDA granted fast track designation.

For the treatment of adult patients with intermediate two or high risk Multibrand says.

John A. Scarlett: Treatment of Adult Patients with Intermediate to or High-Risk Myelofibrosis whose disease has relapsed after or is refractory to jacket. This is the same patient population that was studied in Geronti and BART Phase II clinical trials. With no marketed drugs specifically approved for relapsed refractory MF, there is a significant unmet medical need. FDA's Fast-Track Program is designed to facilitate the development and expedite the review of new drugs that are intended to treat serious conditions and that are supported by data that demonstrate the potential to address an unmet need. We view the FASTRAC designation positively as it provides opportunities for more frequent interactions with the FDA, the ability to submit sections of a new drug application on a rolling basis, and eligibility to request priority review of the FASTRAC designation.

Diseases relapsed after worries refractory to truck.

This is the same patient population studies drawn to embark phase two clinical trial.

But no market a drug specifically.

Perfect and there's a significant unmet medical need syndication.

Yes, yes, that's right programs designed to facilitate the development expedited review of new drugs that are intended to treat trees conditions never supported by data that demonstrate essential to addressing unmet medical need.

We view the fast track designation positively as it provides opportunities for more frequent interactions.

He believes instructions, but new drug application on a rolling basis and eligibility to request priority review.

On the call today, Olivia will review, our to record financial results and expectations around future.

John A. Scarlett: On the call today, Olivia will review our third quarter financial results and expectations around future development. Next, Alexandra will comment on the abstracts that were published yesterday morning for the upcoming American Society of Hematology annual meeting that will be held in December and the current status of the Phase 3 MERS trial. After that, I'll sum up the call. Now, I'd like to turn the call over to Olivia, our CFO, who will report back.

Actually Alexandra will comment on the abstracts published yesterday morning, the upcoming American Society of College annual meeting in December .

And the current status it takes three mergeco after that I'll call it.

So I'd like to try to Colibri Olivia our CFO .

Actual results.

Olivia Kyusuk Bloom: Thank you, Chip, and good morning, everyone. For the third quarter of 2019, we reported a net loss of $15.2 million, or $0.08 per share, compared to $5.6 million, or $0.03 per share, for the third quarter of 2018. The net loss for the first nine months of 2019 was $39.5 million, or $0.21 per share, compared to $19.7 million, or $0.11 per share, for the first nine months of 2018. Revenues for the three and nine months ended September 30, 2019, were $131,000 and $289,000, respectively, compared to $165,000 and $691,000 for the same period in 2018. Revenues for the three and nine months ended September 30, 2019 and 2018, included royalty and license fee revenues under various non-Immatelstat license agreements. The decline in revenues reflects a reduction in the number of active research license agreements in 2019, related to the company's telomerase reverse transcriptase or HTRT technology as a result of pen explorations on the underlying technology. Total operating expenses for the three and nine months ended September 30, 2019 were $16.1 million and $42.8 million, respectively, compared to $7 million and $22.2 million for the comparable 2018 period. Research and Development Expenses for the 3 and 9 months ended September 30, 2019, for 11.

Okay. Thank you Jeff good morning, everyone.

Third quarter of 2019, we reported a net loss $15.2 billion or eight cents per share compared to $5.6 million or three cents per share <unk> third quarter in 2018.

Net loss for the first nine month of 29, he was $39.5 billion or 21 cents per share compared to $19.7 million or 11 cents for sure, but the first nine months in 2018.

Revenues for the three and nine month ended September 30 29.

Or 131000 dollar.

$289000 respectively.

There are two $165000 $691000, but the same period in 2018.

Revenues for the three and nine months ended September 30, 2019 and 28.

Included royalty and license fee revenue under bearish, not an account that license agreements.

The decline in revenue reflects a reduction in the number of active research license agreements in 29.

Related to the company telomerase reverse transcriptase or each or technology as a result, and patent expiration on the underlying technology.

Total operating expenses for the three and nine month ended September 32019, or $16.1 billion and $42.8 million, respectively, compared to $7 million at $22.2 million or the comparable 2018 period.

Research and development expenses, but it's being nine month ended September 30 29.

Well $11.1 billion and $27.1 billion, respectively, compared to 2.7 billion dollar and $8.4 billion, but the same curious in 2018.

unknown: [inaudible]

unknown: $2.7 million and $8.4 million for the same period in 2018. The increase in research and development expenses compared to the same period in 2018, primarily reflects costs for the transition of the Inmatel step program.

The increase in research and development expenses compared to the same period in 2018.

Generally reflect cost, but the transition of Imetelstat program.

unknown: including resuming sponsorship of the ongoing Everett Health Network clinical trials.

Putting resuming sponsorship ongoing.

Clinical trials.

<unk> expenses for start up activities for a reverse.

Olivia Kyusuk Bloom: Expenses from start-up activities for the Phase 3 eMERGE trial and higher personnel-related costs for the Expanding Development General and Administrative Expenses for the three and nine months ended September 30, 2019, were $5 million and $15.6 million, respectively, compared to $4.3 million and $13.8 million for the same period in 2020. The increase in general and administrative expenses, compared to the same period in 2018. This primarily reflects higher corporate and patent legal costs and increased personnel-related expenses for additional headcount to support the development organization.

And higher personnel related costs with expanding development.

General and administrative expenses for that to be a nine month ended September 30, 20 IP.

Were $5 million and $15.6 million, respectively, compared to $4.3 million and $13.8 billion for the same period.

The increase in general and administrative [laughter] compared to the same carried the 20 I.

Primarily reflects higher corporate legal costs and increased personnel related expenses for additional headcount to support the development organization.

Interest and other income for the three and nine month ended September 30 29.

Olivia Kyusuk Bloom: Interest and other income for the three and nine months ended September 30, 2019 were $1,000,000 and $3.3 million, respectively, compared to $1.1 million and $2.2 million for the comparable 2018 period. The overall increase in interest and other income in 2019 compared to the same period in 2018, primarily reflects higher yields on our increased marketable securities portfolio. We ended the third quarter of 2019 with $159.3 million in cash and marketable security. Since May 2019, we have raised cumulative net cash proceeds of approximately $19.3 million from the sales of an aggregate of 13,214,867 shares of common stock under an at-market issuance program.

Or 1 million dollar and $3.3 million respectively.

Her to $1.1 billion at $2.2 billion for the comparable 2018 periods.

Overall increase in interest and other income and 29.

Compared to the same period in 28.

I barely reflect higher yield on our increased marketable securities portfolio.

We ended the third quarter of 2000, 1900 $59.3 million in cash and marketable security.

It's may 29 teams, we have raised cumulative net cash proceeds of approximately $19.3 million.

Sales of an aggregate 13 million tutor 14807 shares of common stock under at market issuance sale degree.

Olivia Kyusuk Bloom: [inaudible] We expect these Net Cash Proteins to provide additional financial flexibility as we advance the ImmunHealth Debt Development Program. The funds will support future development costs, including the emergency free trial.

After deducting sales commissions and other operating expenses well my house.

We expect these net cash proceeds to provide additional financial flexibility as we advance the it didn't help that development program.

The funds will support future development costs, including the first phase three trial.

As chip mentioned, we completed the transition of the in house that partner I'm guessing at the end of third quarter 2019.

Olivia Kyusuk Bloom: As Chip mentioned, we completed the transition of the ImitHealthNet program from Janssen at the end of the third quarter of 2019. Last quarter, in June, we signed a clinical supply agreement with Janssen to purchase certain inventories of drug products, drug substance, and raw materials for MNHealthNet manufacturing. Under the Supply Agreement, we will pay JEMS an approximate $7.5 million for drug products upon shipment of the products to our specified Drug Storage and Distribution Centers. We've also agreed to pay up to approximately $6.7 million for other drugs

Last quarter due.

In the clinical supply agreement with chance to.

The purchase certain inventories of drug product drug substance and raw materials frame and help that manufacturing.

No the supply agreement, we will pay Joe said approximately $7.5 billion for drug talk about ship the product to our specified drug storage and distribution centers.

Also agreed to pay up to approximately $6.7 billion for drug substance raw materials upon testing and confirmation such materials meet certain specification.

Olivia Kyusuk Bloom: Upon testing and confirmation, such materials meet certain specifications. We are not obligated to purchase materials that do not pass testing and conform to our quality specifications.

We are not obligated to purchase material that do not have testing and conform to our quality specifications.

We expect delivery a material under the supply agreement and any testing to be completed by the end of December 2019, upon which we will recognize associated expenses in accordance with accrual method of accounting.

Olivia Kyusuk Bloom: We expect delivery of materials under the supply agreement and any testing to be completed by the end of December 2019, upon which we will recognize the associated expenses in accordance with the accrual method of accounting. We expect cash payments to Janssen for the materials to occur in the first quarter of 2020. As such, we are reaffirming our 2019 guidance and continuing to expect total operating expenses to range from $80 to $85 million, of which approximately $20 to $25 million represents one-time costs that include Immunhealth Debt Program transition activity from Janssen to Geron and purchases of materials to supply the eMERGE Phase III trial and prepare for new drug manufacturing. As you know, we began the year with approximately $183 million in cash and marketable securities.

We expect cash payments to chances for the material to occur in the first quarter of 2020 .

As such we refer we are reaffirming our 2019 guidance.

Continue to expect total operating expenses to range from 80 $85 million of which approximately $20 billion to $25 billion represents onetime costs that include any help that program transition activity or Jan to Jeremy.

Just as a material to supply the emerged a three trial.

Okay and prepare for new drug manufacturing.

And you know we began the year with approximately $180 million in cash and marketable securities.

Olivia Kyusuk Bloom: We estimate our year-end cash and marketable securities to be approximately $145 to $150 million. This projection includes our 2019 Auburn Aid Fence Guide, adding back certain liabilities that would be paid in 2020, such as the purchases of camps and materials. Interest income to be earned in 2019 and the $19.3 billion in net cash proceeds raised under the ATM program. As of October 31, Geron has 42 employees and plans to grow to a total of approximately 45 to 50 employees by year-end 2019, of whom half will be research and development personnel.

To meet our year end cash and marketable security to be approximately $145 million to $150 million.

It's projection includes our 2019 operating expense guidance, adding back certain liabilities that would be paid 2020, such as the purchase of Janssen material.

Interest income to be earning 29 team and the $19.3 billion net cash proceeds raised under the ATM program.

As of October 31.

Geron had 22 employees and plans to grow to a total of approximately 45.

By year end 2019.

Oh half will be research and development personnel.

With that I will turn the discussion Alexandra.

Alexandra: With that, I will turn the discussion to Alexandra. Thanks, Olivia.

So yeah.

I was glad to the two abstracts accepted for poster presentations at Ash annual meeting to be held in December the abstract can be positive aspects I thought when did that wasn't up would you I told US you got fourq.

Alexandra: I will comment on the two abstracts accepted as poster presentations at the ASH Annual Meeting to be held in December. The abstracts can be found on the ASH website at www.hematology.org. Let me start with the abstract reporting data from non-clinical laboratory experiments on the potential effects of combining hematopoietic endotoxin with malignant myofibrosis or MS cells. Ruxolitinib is the first drug approved for the treatment of myelofibrosis and until recently, was the only drug.

[laughter] starts the abstract reporting D [laughter] no meaningful leverage.

On the potential effects are finding until.

Like the Onboarding, that's filed for groceries or Mexico.

Actually the first drug approved for the treatment the file rosy and until recently was the only track.

Alexandra: The two sets of non-clinical experiments described in this abstract explore the hypothesis that the combination of hematopoietin and ruxolitin might create a treatment regimen for MS that could be more efficacious than using either drug alone. In the first set of experiments, spleen cells from MS patients and cord blood cells from healthy individuals, each containing hematopoietic stem and progenitor cells, were grown in a tissue culture lab and were treated with one of four regimens. Emmett Telford-Alone, Brooke Shelley-Penepe-Alone, Unknown Speaker, Unknown Speaker, Unknown Speaker, and a combination of fluctuating amygdala cells that is even sequential.

Two sets of Nonclinical experiment is tracking these abstract export that had wasn't it it's a combination mattel's back it looks like it might treat a treatment regimen right, Matt it could be more education and using either dry alone.

In the first kind of experiments, we sell from MSP and sports lifestyle from healthy be jokes, each containing how much afraid extend and protect yourselves are growing in tissue called tearlab retreating we'd won a fourth regiments imetelstat alone.

So we didn't even alone.

A combination of FERC sleeves, and he's been asking that tells that.

He asked me.

And.

The nation, Unfortunately, I can't tell us that you've been sequentially.

Alexandra: In the second set of experiments, mice were transplanted with either MF spleen cells or normal cord blood cells and then treated with one of the four regimens as used in the first set of experiments. In both sets of experiments, the sequential treatment of ruxolipinib followed by metelsat resulted in significant reductions in the numbers and functions of the malignant hematopoietic stem and progenitor cells originating from the MS compared to either treatment alone or the simultaneous treatment regimen. Furthermore, in both sets of experiments, the sequential treatment regimen did not affect the hematopoietic stem and progenitor cells originating from normal cord blood cells.

In the second set of experiments my we're trying to find it either and that we sell or normal northwest shelf and then treaty we might have supported regiments and used in the first expert.

In both set of experiments.

Special treatment the FERC Selene Oh.

<unk> buying until that resulted in significant production numbers and the function of tamales nine month operating staff or James yourselves or anything like that.

Compared to either.

Going forward he is treatment regimen.

Furthermore, imposed have expressed the sequential treatment regimen did not affect that.

Morning.

And your self originating from the normal worth what else.

The results from these experiments for why potential additional if the kitchen mintel country.

Alexandra: The results from these experiments provide a potential additional application of hematopoietin-treating MS because the complexities involved with combining two therapies with overlapping toxicities have not been explored. Further research would be needed to determine the appropriate dose and schedule of the combination treatment before we could decide to pursue this as a potential treatment regimen format. In the meantime, since Hematelstat has shown single agent activity in various hematologic malignancies, we intend to prioritize our efforts on advancing Hematelstat as an individual treatment regimen. The second abstract accepted for ASH was in a new category called Childhood Progress.

Because the complexities involved with combining two therapy overlap.

It has not been exploring further research would be needed to try and the appropriate dose escalate due to combination treatment before we could decide to pursue against potential treatment regimen frame.

In the meantime, you myself that has shown single agent activity various hematology placements.

Sachin prioritized our efforts on advancing myself that.

Drug regimen.

The second abstracts accepted for Ash watching the news has agreed to trial can progress.

Alexandra: Asterisks for this category describe innovative clinical trials that have not reached their primary endpoints to provide opportunities for early engagement and collaboration amongst translational, clinical, and industry investigators, statisticians, and regulators. In addition, abstracts in this category enhance the feasibility of ongoing clinical trials to facilitate patient care. We are pleased that the Phase 3 eMERGE trial has been included in this new category, and details of the trial design will be presented at a post-session. Many aspects of the Phase III trial design, including the primary and secondary endpoints, the target patient population, and the dose and schedule from cell-type administration, remain consistent with the Phase II portion of the trial. In addition to the presentations of the two abstracts, we also look forward to the upcoming ASH Annual Meeting, as we are sponsoring three additional educational symposiums and will have the opportunity to connect with investigators and PRLs who will be actively involved in patient recruitment and enrollment. With regard to the fate of the emergency trial, Scarlett's activity... We have recently hosted two meetings, one in the U.S. and one in Europe, for investigators and participating The reception of these meetings has been very positive.

Abstracts for these category describing how much is clinical trial. It has not reached their primary endpoint.

Provide opportunities for early engagement and operation.

Thanks, Josh H., no Pico and he industry investigators.

Regulators.

In addition, abstract in this category [laughter], if ongoing clinical trials.

[laughter], we're pleased that must be reimbursed trial has been included in these new country and details of the trial design.

[laughter] many aspects of the phase three trial design win in the primary and secondary endpoints the target patient population and the dose and schedule myself administration remain.

We the phase two portion.

In addition to the for their patients. So that you asked right. We also for right. Yeah, I guess annual meeting its first wondering you should know.

Educational.

And we'll have the opportunity to connect the best years and carry else well be active people they should be written in April .

With regard to the CE Mark trial starts.

We have recently hosted to meet next one right in line in Europe for investigators everything site.

There's section in these meetings have been very cool.

Alexandra: The first patient was dosed in October, and approximately 30% of the sites are open for enrollment. At this stage of the trial, it is too early to determine what the enrollment dynamics will be since less than 50% of the sites are open, and many of the sites that are expected to be high enrollers, particularly in Europe, have yet to be opened. We expect to have a better sense of enrollment dynamics by the end of the first quarter of 2020. Going forward, we plan to provide quality safety updates on enrollment during our quarterly conference calls. We also expect to announce when half of the patients have been enrolled in the trial and when the trial is fully enrolled. Based upon our current planning assumptions, we continue to expect top-line results by mid-year 2020. And now we'll turn the discussion back to Jim.

The first patient must dose in October .

Nothing serious and oversight are opened for enrollment.

At this stage of the trial is too early to determine what the rolling dynamics.

[laughter] aside.

Many of the sites that are expected to be high rollers, particularly in Europe have yet to be up.

Do you expect to have a better [laughter] enrollment by the end up at France, where 20.

[laughter] going forward.

Nice to provide.

Updates on enrollment drink our quarterly conference calls, we also expect announcement half the patients have been involved in the trial and when that trial intimately involved.

Based upon our current planning assumptions, we continue to expect topline results and meet your 2022.

And now I'll turn the discussion that you.

John A. Scarlett: Thanks, Alexandra. Moving on to MF. As discussed previously, we're currently in the process of preparing to conduct an end-of-phase-two meeting with the FDA by the end of the first quarter of 2020, and we'll subsequently announce our decision regarding any potential future late-stage development for Elapsed Refractory In-Mouth. This decision will be influenced by, among other things... The nature of our discussions with the FDA, and our assessment of what would be required to achieve clinical and regulatory success in this indication, including the cost and duration of any potential clinical trials required for regulatory approvals in the United States. So, in summary, we're a much different company today than we were a year ago. We continue to make...

Thanks, Sandra [noise] moving on to enough [noise] as discussed previously we're currently in the process of preparing to conduct an end of phase two meeting yesterday by the end of the first quarter of 2020 and will subsequently announced our decision regarding any potential future late stage development plans for relapsed refractory on that.

This decision will be influenced by among other things the nature of our discussions.

Hey.

What would be required to achieve clinical and regulatory success in this application, including the cost and duration of any potential trials required regulatory approvals in the United States in Europe .

So in summary, we were a much different company today than we worry Hurco, we've continued to make great progress in 29.

We have solid foundation of in house expertise in hematology oncology and in late stage to though.

Two dosing the first patient in the phase three emerging clinical trial.

Just on opening sites to enable patient recruitment in enrollment for the phase three and on preparing for the end of things to meeting with the FDA.

John A. Scarlett: to dosing the first patient in the Phase 3 eMERGE clinical trial. We're focused on opening sites to enable patient recruitment and enrollment for the Phase 3 trial and on preparing for the end of Phase 2 meeting with the FDA. All of the development activities completed to date and plans for the future support the development of a telestat as a potential treatment to address unmet medical needs. We look forward to the remainder of this pivotal year as we continue to execute on our 2019 development plans. We believe our accomplishments will translate into shareholder value more than once. So with that, we're now happy to answer your questions, and we'll turn the call back to the operator.

On in relapsed refractory enough always development activities completed eight and futures support the development of Imetelstat as a potential treatment to address unmet medical needs.

I would like.

We look forward to the remainder of this pivotal years, we continue to execute on our 2019 <unk> plans, we believe our accomplishments will translate shareholder value.

So with that we're now I'm happy to answer your questions and we'll turn the call back to the operator.

Thank you as a reminder to ask a question you want me to press Star one nine your telephone to withdraw your question press the pound or hash key please standby only compiler Q and a roster.

And our first question comes from the line of Charles Duncan from Cantor Fitzgerald. Your line is open.

Operator: Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound or hash key. Please stand by while we compile the Q&A roster. And our first question comes from the line of Charles Duncan from Cantor Fitzgerald. Your line is open.

Good morning. This is our pizza <unk> on for Charles.

All right so I.

Good morning.

One question regarding.

So your we have a potential approval of Patterson and die.

Wondering whether you think you may have difficulty enrolling our as positive patients into the study given that.

Pete Stavropoulos: Good morning. This is Pete Stavropoulos. I'm on behalf of Charles. Thank you for your time.

There's these make your own towards an approved drugs. If so how do you think that may affect overall study timeline and would you consider enrolling pieces that relapse or refractory museums Patterson emerged study.

unknown: Good morning.

Alexandra: One question regarding So, we have a potential approval of lispatercept, and I was wondering whether you think you may have difficulty enrolling RS positive patients into the study given that the physicians may steer them toward an approved drug. If so, how do you think that may affect the overall study timeline, and would you consider enrolling patients that relapse or are refractory to lispatercept into the iMERGE study?

[noise] I'm happy talk time, Tracy I'll take that question. So I mean, it's as we just mentioned right. We're open for screening and enrollment and especially pretty far along can be rolling process by the time.

Alexandra: I'm happy to have Alexandra here. I'll take that question. So I mean, as we just mentioned, right, we're open for screening and enrollment. And we expect to be pretty far along in the enrollment process by the time of the PDUFA date for who spider steps, and that will follow perhaps with approval in Europe during the second half of 2020. So we would expect to be close to completing enrollment by that time. And, you know, based upon what we know today, we believe that it is unlikely that the potential approval of the who spider steps will impact our enrollment timeline.

Based on war.

[laughter] and that we fall, perhaps with the approval in Europe , three second half of the tiny tiny so we would expect to be close to completing enrollment by that time and you know just based upon what we know today.

We believe I like that.

That's fine.

Act our enrollment timeline.

Okay. Thank you and.

For the abstract for ash, you're going to their nonclinical data. So there wasn't much sequential treatment of a tracker inhibitor.

That's helpful.

<unk>.

Is there or is there a possibility of adding oh.

Alexandra: Okay, thank you. And in the abstracts for ASH, you're going to present non-clinical data for the regimen of sequential treatment of a JAKA inhibitor with methoxydac. So, is there a possibility of adding an MF? (inaudible).

Enormously Vms study for this given regimen and you think it's gonna be or one of the list of topics.

At the end of phase two meeting.

[laughter] and I mentioned right more work that needs to be tied to to pursue [laughter] clinical studies.

Alexandra: As I mentioned, more work could need to be done to pursue a clinical study with the combination, and that would include careful exploration of the overlapping toxicities between the two drugs. At the moment, our resources and ventures are focused on advancing hematocytes as a single-agent treatment, such as the eMERGE Phase III clinical trial. We are also working hard on determining the potential regulatory path for relapsed-refractory MS. So, you know, we believe that at the moment this should be stable.

Combination that would include airports, we should not be overlapping toxicities between the two dry.

At the moment, our resources and bad Bank, we are focused on I've been thinking that's outside in the Eagle agent treatment.

Such as he emerge phase three clinical trial and also we worked hard on determining potentially regulatory path.

Before we.

Yes, you factory a man side you know we believe at the moment issue they our focus.

Alexandra: Okay, and can you speculate as to why sequential dosing rather than simultaneous dosing may have a greater reduction in MS hematopoietic cells?

Okay and can you speculate as to why sequential dosing Robbins <unk>.

We have a greater reduction and Uh huh.

The direct sales and the regenerative cells.

Alexandra: Right, yeah, so we, yes, I can give you some flavor of that, and as you might know, ruxolitinib has been reported to be a DNA damaging agent and not an anti-apoptotic agent. So in the experiments, with the sequential treatments, what happens is that you first induce DNA damage into these MS malignant cells, and after that, you induce an anti-apoptotic agent that tells us that, therefore, the combination has an additive effect, or synergistic effect, if you will, on the malignant cells.

Right right, Yeah. So we Oh, yes, I can I can give you some flavor of that and as you might know excuse me has been reported to be a DNA damaging age and up north and <unk> 28.

So we the experiments to be the sequential treatments, what's happened to bed breaking news DNA damaging basketball business held and after that induce an anti epileptic agents like myself that there's going to combination has.

Or that effect.

Expect wheel R&D malignant cells.

Pete Stavropoulos: Alright, thank you very much, and congratulations on the progress for the quarter. Thank you.

That's bad for this.

Alright, Thank you very much in that congrats on progress for the quarter.

Actually again.

Our next question comes from the line of Tom Shrader from B T. G. Your line is open.

Tom Schrader: Our next question comes from the line of Tom Schrader from BTIG. Your line is open.

Hi, this is coming <unk> or Tom Thanks for taking my question I just have one on average could there be any incremental data from the phase two trial between now and when we first expect data from the phase three study.

Kaveri: Hi, this is Kaveri from KALM. Thanks for taking my question.

unknown: I just have one question on eMERGE. Could there be any incremental data from the Phase II trial between now and when we first start?

unknown: [inaudible]

unknown: In other words, any kind of interim analysis or any kind of other data? Is that the question?

In other words or any kind of interim analysis or in any kind of.

Other data is that the question.

Yes [laughter].

unknown: I think she's asking whether we'll have any follow-up data.

She backing away they will have any follow up eight as friends that phase two oh <expletive> already merge.

unknown: At the moment, we do not plan to have that, at least not at the next ASH or EHA conference. We will look at the data as it evolves, and we will let you know. Thank you. And our next question comes from Gil Blum from Needham and Company.

Okay.

At the moment, we do not plan.

At least not that next ash or E. G. Friends, we'll look at that age I see people I feel that you know.

[laughter].

Thank you.

And our next question comes from the line of Gil Bluhm from Needham and company. Your line is open.

Gil Joseph Blum: Hi everyone, thanks for taking my question. Just a quick one about modeling. I just want to make sure I understood. So we expect a pretty significant tick up on 4Q R&D expenses. Is that a good way to look at this?

Everyone. Thanks for taking my question just a.

A quick one about modeling I just want to make sure I understood. So we expect a pretty significant pick up on for Q R&D expenses.

Oh, good way to look at this.

Olivia Kyusuk Bloom: Yes, Gil, as you probably have seen through the year, there has been a steady increase in the pickup in both R&D and G&A expenses, especially R&D obviously for the startup activities for Phase 3, as well as the hiring of individuals into the development team.

Yes ill, let you probably have seen through the year there has been it.

He increase and the pickup in both R&D and she'd expense, but I'm, especially R&D, obviously for the startup activities for the phase three as well as the hiring of individuals into the development team.

All right.

Gil Joseph Blum: Alright, my question is more of, am I expecting a very significant increase, mostly in the fourth quarter, to be almost like a one-off in that sense?

My questions more of them and my expecting a very significant increase mostly in the fourth quarter two to be.

Almost like a one off.

Yes, and and that's as a result, as I mentioned about the purchases at this supply materials that are coming from Janssen, but if you add the two together, that's almost $14 million and because we expect the delivery that activity to be completed by the ended the year I do I need to accrue them for accounting purposes, and those expenses, but.

Olivia Kyusuk Bloom: Yes, and that's as a result, as I mentioned, about the purchases of the supply materials that are coming from Janssen, but if you add the two together, that's almost $14 million, and because we expect the delivery and the testing activities to be completed by the end of the year, I need to accrue them for accounting purposes, and those expenses would hit in 2019, even though the cash won't hit, the cash outlay will not hit until the following quarter.

28, even though the cash well the cash outlay watch it until the fall in corridor.

Gil Joseph Blum: Gotcha. Thank you. That helps.

Thank you that's the that's helped.

Okay, just one more about.

Gil Joseph Blum: And just one more about ash. It seems like we're going to get a pretty exciting ash for myelofibrosis. We're getting some data from Constellation, I understand, and there's more data coming out of Frederatneb. Do you guys think maybe relapsed refractory myelofibrosis is getting kind of highlighted?

Oh gosh, it seems like we're gonna get pretty exciting asked for a myelofibrosis, we're getting some.

Data from constellation understand and there's more data coming out of for her out and Uh huh.

Do you guys think maybe reflect relapse refractory myelofibrosis is getting kind of highlighted in this upcoming gosh.

unknown: I think it's always, you know, good news for patients to have new and data for, you know, potentially new drugs available for them. I mean, the Fidrazimib data, you're right, there are a few abstracts that are both in frontline and B-electrofractory MS, and Fidrazimib clearly continues to show clinical benefits however you analyze the data. Again, it also has a different mechanism of action than Fidrazimib, so that's where we, you know, stay focused and differentiate. In terms of the constellation data that is being reported, as you mentioned, again, both data on frontline and B-electrofractory MS.

I think it's always you know I wouldn't use for patients I have to you and and beat up or no potentially new drugs available right now.

The dropping you'd be that.

Right right. There you abstract odd that are voting for online and ask you asked refractory amassed.

You know drives me clearly continues.

So any color benefits. However, you analyze the data again, but he also has a different mechanism of action on Ben Thanks to dry you've said that that's where we you know state okay. Great shape in terms of E. Constellation data that is being reported a D. S. You mention again both.

We've gone from flying and angry like factory and that's.

You know I just doesn't have to their base right eight days entry Inc. and its really and yeah. It remains to be seen how the deal that will mature so yeah I mean.

unknown: Um, excellent. Thank you for taking my questions. Congratulations on. Thank you.

It's good asked for miles for growth in Ah Okay.

Excellent. Thanks for taking my questions then.

Operator: Thank you. Thank you. Thank you very much. Again, if you'd like to ask a question, that's star one on your telephone. And this ends the Q&A session. I will turn the call over to Dr. John Scarlett.

Congratulations on progress in this quarter.

Thank you. Thank you thanks very much.

Hi, Ken if he'd like to ask a question that star one on your telephone.

[noise] and this and securing a session I will turn the call over to Dr., John Scarlett for closing remarks.

John A. Scarlett: Thanks, everybody, for joining us.

unknown: Thanks, everybody.

unknown: Thank you for joining us today. We look forward to reporting new progress as we go forward here. Have a good day. Bye.

Thanks, everybody for joining us today for two reporting continued progress as we go forward here.

Good day bye.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

unknown: BF-WATCH TV 2021 (inaudible) BF-WATCH TV 2021