Q4 2019 Earnings Call
[music].
Ladies and gentlemen, thank you for standing by welcome to the Gerald corporations fourth quarter and year end 2019 earnings conference call. At this time all participants are in listen only mode. After the speakers presentation. There will be a question answer session to ask a question. During the session. You want me to press Star one on your telephone.
If you require any further assistance please press star zero.
Hi, Andrew the conference over to your Speaker today Mr. Han Mr. Please go ahead.
Thank you Gabriel and good afternoon, everyone.
Thank you for joining us for today's conference call Im joined today by Dr., John Scarlett, Gerons, Chairman and Chief Executive Officer, and Olivia Bloom, the company's Chief Financial Officer.
After the after the market close today, we know our fourth quarter and full year 2019 results by a press release. It is available on our website <unk> under www Dot Geron Dot Com Sosh investors. In addition, a live webcast for the call is available on our website and will be archive for 30 days.
Before we get before we begin please note that except for statements of historical fact this presentation in question and answer session contain forward looking statements made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act at next 95 investors are cautioned that such forward looking statements include any other companies playing.
Patients timelines believe statements are potentiality and projections and without limitation that was regarding that the topline results from the phase three emerged clinical trial are expected to be available by mid year 2020, mid year 2022, and that emerge will be fully enrolled.
By the end up 2020.
John will make a decision by mid 2020 regarding potential late stage development of Imetelstat enough that Gerrard will began a proof of concept study and the higher risk Mds and AML and that Gerons 2020, operating expenses will be $70 million to $75 million.
All of these forward looking statements involve risks and uncertainties that can cause actual results could differ materially from notice in such forward looking statements. These risks and uncertainties include without limitation thought was regarding that the company maybe unable to overcome all clinical safety efficacy technical scientific operational manufacturing and.
Regulatory challenges to enable full enrollment of emerging 2020, the start of the prove up proof of concept study in 2020 or that the topline results from the phase three emerged clinical trial will be available by mid year 2022.
That regulatory authorities may not permit the further development of Imetelstat on a timely basis or at all that the company may decide not to proceed with late stage development of Imetelstat in MF.
That's a kogut 19 pandemic may significantly impact enrollment of patients insurance clinical indoor drug supply.
And that there maybe unexpected operating expenses or events or changes insurance plans that caused the 70 to 75 million dollar 2020 financial guidance to be revised detailed information on the above risk and on the risks and uncertainties and additional risks uncertainties and factors that could cause actual.
To differ materially from those into forward looking statements are under the heading risk factors insurance annual report on form 10-K for the year end at December 31st 2019 filed with the FCC [noise].
[noise] undue reliance should not be placed some 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.
I will now turn the call over to Dr., John Scarlett, Chairman, Gerons, Chairman and CEO chip.
Thanks, Suzanne clicked Wilson onto our fourth quarter and yearend 2019 conference call.
Turning 18 was a pivotal Europe accomplishments for Jerome chief among them being the started the randomized placebo controlled phase three emerged trial and lower risk my we just plastic syndromes.
Based on interactions with U.S. and European regulatory authorities, we expect to study if successful to support potential registration of Imetelstat and lower risk Mds.
Topline results from a merger expected in mid 2022.
In addition in 2019, we assembled an impressive multifunctional in house team with a proven track record in early and late stage drug development.
Nine members of our current development team worked on Imetelstat when the drug was with Janssen.
They followed imetelstat to drawn.
And therefore have indepth knowledge of Imetelstat regulatory and clinical development history.
The combined depth and breadth of experience of our new hires in developing and commercializing blockbuster drugs, such as Imbruvica and Darzalex empowers us to execute not only on our current and future trials, but also to create and execute well designed global development plans to enable potential commercial success.
In 2020 or plans will focus on completing enrollment in the phase three emerge clinical trial.
Presenting at future medical conferences additional phase two data from both emerging lower risk Mds and the embark in relapsed refractory AML.
Deciding any potential late stage development path in myelofibrosis.
And commencing a new proof of concept study and higher risk Mds and AML.
All these plans our decision related to M.F. is probably the most anticipated.
We had an FDIC into phase two meeting in the fourth quarter of last year in which we discussed the results of our embark trial in myelofibrosis patients, who are relapsed or refractory to JAK inhibitors.
Based on feedback from that meeting we plan to submit phase three trial design proposals in enough to the FDA.
And in the second quarter of 2020 to have further discussions with the FDA regarding a potential regulatory approval path if any for imetelstat in MF.
Due to the sensitivity of ongoing interactions with the FDA all of the specifics related to our clinical trial design proposals and other elements of our clinical development strategy in enough will remain confidential for now.
I look forward to the opportunity of sharing more information by mid year, which is when we expect to announce our decision regarding any potential late stage development enough.
Also related to M.F., we expect presented a major medical conference new analyses from the embark phase two trial. The correlate the median overall survival observed with other clinical endpoints from the trial.
We believe these new analyses will provide further support for the pinching improvement in survival for these patients as an indication of disease modifying activity of Imetelstat treatment in myelofibrosis.
After Olivia or CFO reviews, our fourth quarter and year end 2019 financial results as well as projected 2020 guidance I'll discuss human whole stats mechanism of action data from the phase two emerged trial the status of emerge in phase three and our current thinking on potential additional indications.
Thank you chip and good afternoon, everyone.
For the fourth quarter of 29 team, we reported a net loss of $29.1 million or 15 cents per share compared to $7.3 million or four cents per share for the fourth quarter of 2018.
Net loss for the full year of 2019 was $68.5 million or 36 cents per share compared to $27 million or 15 cents per share for the full year 2018 revenues for the three in 12 months ended December 31, 2019 were $171000 and $460000, respectively compared to 370.
$5000 and $1.1 million for the same periods in 2018.
Revenues for the three in 12 months ended December 31, 2019, and 2018 included royalty and license fee revenues under various not Imetelstat license agreements. The decline in revenues reflects a reduction in the number of active research license agreements in 2019 related to our human to one might reverse transcriptase or <unk> technology as it.
Result of patent expiration on the underlying technology.
Total operating expenses for the three and told month ended December 31 training team were $30.2 million and $73 million, respectively, compared to $10 million and $32.1 million for the same period between 18.
Research and development expenses for the three and 12 months ended December 31, 2019, or 24.9 million $52.1 million, respectively, compared to $5.1 million and $13.4 million for the same period, 2018th the increase in research and development expenses compared to the same periods in 2018, primarily reflects costs.
For the transition of the Imetelstat program, including resuming sponsorship of the ongoing Imetelstat clinical trial expenses for startup activity for the immersed phase three clinical trial.
Purchase of inventories of drug product drug substance and raw materials from Janssen and higher personnel related costs with expanding development team.
General and administrative expenses for the three in 12 months ended December 31, 2019 were $5.3 million and $20.9 million, respectively compared to $4.9 million, an $18.7 million for the same period. The 2018, the increase in general and administrative expenses compared to the same period in 2018.
Primarily reflects higher corporate and patent legal costs and increased personnel related expenses for additional gionee headcount to support the development organization.
Interest and other income for the three in 12 months ended December 31, 2019 was $925000 and $4.2 million, respectively, compared to $1.1 million and $3.3 million for the same period in 2018. The overall increase in interest and other income in 2019, when compared 2018, primarily reflects higher yields on our marketing.
Our securities portfolio.
We ended the 2019 fiscal year with $159.2 million in cash and marketable securities. We expect these funds to be sufficient to continue they merge clinical trial in 2020 and to commence a proof of concept study and 2020.
Moving onto projected 2020 guidance, we expect operating expense burn to range from $70 million to $75 million, which includes costs related to the global emerge phase three clinical trial.
Validation of supply chain vendors for the manufacturing and Intelsat.
For their interactions with the FDA in connection with the plan submissions of phase three trial design proposals in MF and discussion regarding a potential regulatory approval path in enough and commencement of a proof of concept study of Imetelstat.
[noise] 2020 projected guidance does not include any late stage clinical cost for enough. Since we have not made our decision regarding any potential late stage development in N.S., which we expect to occur by mid year 2020.
As of December 31, 2019, the company had 46 employees, we plan to grow to a total of 55 to 60 employees by year end 2020 of which the majority will be research and development personnel.
The increase in head count is reflected in our 2020 projected guidance.
Financial guidance is based on a set of assumptions at a point in time and if the company's plans change, causing assumptions to be revised then we expect to update guidance at that time.
And with that I will turn the discussion back to chip.
Thanks Livia [noise].
You know toll stat has great promise in hematologic myeloid malignancies due to its unique mechanism of action, which results in telomerase inhibition.
The progression and growth of these malignancies is driven by rapidly print proliferating malignant progenitor cells, which have highly upregulated telomerase.
By selectively inhibiting the telomerase activity in these cells are clinical evidence to date indicates imetelstat may have disease modifying activity in multiple hematologic myeloid malignancies, including Mds and M. enough.
This potential to be disease modifying may fill the void in the current treatment landscape of these disorders. For example, myelofibrosis key opinion leaders point out that a potential disease modifying agent with the mechanism of action different from a JAK inhibitor would be highly desirable in order to treat non JAK inhibitor responsive patients and became law.
Long term benefits, including increased survival.
Turning to lower risk Mds the phase two emerged data presented at the European Hematology associations annual Congress in June 29 team continued to highlight the meaningful and durable transfusion independence across all MBS subgroups and most importantly in patients with a high transfusion burden of greater than four units.
Per eight weeks.
For example, we reported an eight week transfusion independence or T. I read a 42% and a 24 week PPI rate of 29%.
Transfusion free intervals lead to an improved quality of life less time in an infusion chair less cost and reduced exposure to potential iron overload.
For observations from the emerged data presented at <unk> also highlighted the potential disease modifying activity associated with imetelstat treatment and lower risk Mds.
First 75% of the eight week T.I. responders also experienced rise in hemoglobin of more than three grams per deciliter.
This would not have occurred without re population of normal hematopoietic cells and subsequent production of normal blood cells in the bone marrow.
Second the medium duration of transfusion independence, and emerge with reported to be 86 weeks or over 20 months with the longest duration free period reported to be more than two and a half years also clearly indicating modification of the underlying disease process.
Third of the three patients with poor cytogenetic risk in whom post treatment carry type data was available to achieved a partial cytogenetic response as indicated by reduction in cells with abnormal carry types and more importantly, these patients achieved eight or more weeks of transfusion independent.
Fourth Imetelstat decrease the amount of one of the most common mutations in Mds patients, which was a three be one.
Of the six patients with a three be one five had some reduction in the number of cells with this mutation and after treatment with Imetelstat also achieve long term transfusion independent.
With patients remaining in the face to emerge trial. This year, we expect to present at a future medical conference more mature data from the continued treatment and follow up to these patients including durability of transfusion independent.
As I commented on earlier in this call we opened the emerge phase three clinical trial in August of 2019 in the first patient was dosed in October of 2019.
63% of the sites, we're open for enrollment as of the end of February.
[noise] well with regard to coded 19 yesterday, the world Health organization deemed infections with this agent to be a pandemic.
As of today Jiron is not experienced any significant disruptions due to the virus.
We have been able to continue to operate relatively seamlessly, particularly with the use of technology, such as video teleconferencing and to date haven't experienced any enrollment delays or supply chain issues in emerge related to Cobiz 19.
We're carefully monitoring both enrollment and the supply chain.
Based on internal assessments, we anticipate there could be isolated enrollment delays in the future for example in Italy due to travel restrictions. We also believe we have substantially mitigated the risk related to our supply chain. Because we believe we have sufficient drug supply to conduct are ongoing emerge clinical trial and have why.
We distributed this drug supply throughout the regions, where we're consuming trial.
[noise], there's still a lot of uncertainty regarding the magnitude of the effects of cobot 19, including the length of time, the pandemic will persist. Therefore like any company that is conducting clinical trials, we could become significantly impacted by coves at 19 with respect to slower than expected patient enrollment or.
One of drug supply and will provide an updated our next quarterly call.
We continue to expect completion of enrollment in the emerge phase three trial by the end of 2020 and to achieve topline results by midyear 2022.
In the phase three were enrolling the same population of low risk Mds patients, who are relapsed or refractory to a richer site stimulating agent and are using the same primary and secondary endpoints is in the phase two.
Finally in the second half of this year, we plan to expand the Imetelstat program by commencing the proof of concept single agent study and higher risk Mds and acute myeloid leukemia, otherwise known as AML.
These patients have a dismal prognosis after failure of Hypomethylating agents for example, following HMH treatment failure higher risk Mds patients have immediate no west of approximately six months and AML patients, having medium notes of less than six months.
Operator: BF-WATCH TV 2021 Ladies and gentlemen, thank you for standing by, and welcome to the Geron Corporation 4th Quarter and Year-End 2019 Earnings Conference Calls. 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 1 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, Ms. Suzanne Masseri. Please go ahead.
There are currently no approved therapies to treat these eight you make failure patients as such they represent a significant unmet medical need.
We believe that based on the mechanism of action of Imetelstat. It may be efficacious in higher risk Mds and AML.
In addition, we've reported strong preclinical data that suggests it imetelstat targets malignant stem cells in a mill.
We're still in the planning stages of this proof of concept study and expect to have more information to share out or before our second quarter conference call.
Unknown Attendee: Thank you, Gabriel, and good afternoon, everyone. Thank you for joining us on today's conference call. I am joined today by Dr. John Scarlett, Geron's Chairman and Chief Executive Officer, and Olivia Bloom, the company's Chief Financial Officer. After the market closed today, we announced our fourth quarter and full year 2019 results via press release. It is available on our website under www.geron.com slash investors. In addition, a live webcast of the call is available on our website and will be archived for 30 days.
We expect to begin this study by the end of the fourth quarter this year.
In summary, this could be a defining moment or sorry, a defining year for jiron and imetelstat with a strong team in place to execute our 2020 plans and ongoing phase three registration trial in lower risk Mds upcoming clinical data updates to support imetelstat competitive advantages of drugs with potential disease modifying active.
City in hematologic myeloid malignancies potential future MF development plans and a proof of concept study to expand the Imetelstat program with additional heme malignancies.
Unknown Attendee: Before we begin, please note that except for statements of historical fact, this presentation and question and answer session contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities 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 eMERGE clinical trial are expected to be available by mid-year 2020 – mid-year 2022, and that eMERGE will be fully enrolled, by the end of 2020, that Geron will make a decision by mid 2020 regarding potential late stage development of imitelstatin MF, that Geron will begin a proof-of-concept study in higher-risk MDS and AML, and that Geron's 2020 operating expenses will be $70 to $75 million.
We look forward to further advancing the development of Imetelstat.
We believe that as we continue to formalize and achieve our 2020 plans that we will demonstrate were firmly on the path to create new treatment options for patients and value for investors.
So with that now we'd like to answer your questions I'll turn the call back over to our operator.
As a reminder to ask a question you will need to press star one on your telephone.
Draw your question you press the pound.
First question will come from a line of Chad Messer Needham. Please go ahead. Your line is open.
Great. Thanks for taking my questions.
Just starting with the proof of concept study just to be clear. It sounds like this is a single agent Hmm.
Failures, just wanted to confirm that.
Is there any interested doing imetelstat combo studies.
Unknown Attendee: All of these forward-looking statements involve risks and uncertainties that could 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 clinical, safety, efficacy, technical, scientific, operational, manufacturing, and regulatory challenges to enable full enrollment in eMERGE in 2020, the start of the proof-of-concept study in 2020, or that the top-line results from the Phase III eMERGE clinical trial will be available by mid-year 2022. That regulatory authorities may not permit the further development of Imatelstat on a timely basis or at all. That the company may decide not to proceed with the late-stage development of Imatelstat and MF. That the COVID-19 pandemic may significantly impact enrollment of patients in Geron's clinical trials and or drug supply.
In the future, whether it's in AML or Mds and ask for or anywhere else.
Thanks, Chad.
So currently we anticipate that this will be in HMH failures.
So confirm that second of all.
With regard to combination studies as you know the challenge there is that you have to always think about.
Competing toxicities from the combination agent.
I think we'll probably have more to say about this in the future in terms of.
Our thinking around how to develop drug further but for the moment don't have any planned combination studies on the books right now.
Hi, Thanks.
That's helpful.
Part of your operational goals for the year, you talk about reestablishing manufacturing supply chain, not something I ever remember worrying about and hopefully after you answer my question. The Delaware Me true, but what is there to do there is something Janssen was doing and you've got to get back control. All been you said you have drug supply.
For the ongoing clinical trials, but it's not so that I presume this is for future trials and potential commercial supply.
So I'm going to let Olivia comment about that she's been all over it.
You're right Chatto and as part of the guidance I did say that on some of those costs are related to validation of our supply chain vendors.
So as you may recall and Intelsat is contract manufactured out and we have several vendors that we've utilized for many years that entire supply chain vendor relationships was transferred to dance at the time the calibration. They all have now transferred back to John now with us being the sponsors of the study in with US now see potential future.
Unknown Attendee: And that there may be unexpected operating expenses or events or changes in Geron's plans that cause the $70 to $75 million 2020 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 is under the heading risk factors in Geron's annual report on Form 10-K for the year ended December 31st, 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, GRN disclaims any obligation to update these forward-looking statements to reflect future information, events, or circumstances. I will now turn the call over to Dr. John Scarlett, Geron's Chairman and CEO.
Commercializing, obviously, we need to ensure the revalidation of the processes under our quality process right.
John A. Scarlett: Thanks, Suzanne. I'd like to welcome everyone to our fourth quarter and year-end 2019 conference call. 2019 was a pivotal year of accomplishments for Geron, chief among them being the start of the randomized placebo-controlled Phase III eMERGE trial and lower-risk myelodysplastic syndrome. Based on interactions with U.S. and European regulatory authorities, we expect this study, if successful, to support potential registration of imitelstat and lower-risk MDS. Top line results from eMERGE are expected in mid-2022.
John A. Scarlett: In addition, in 2019, we assembled an impressive, multifunctional, in-house team with a proven track record in early and late stage drug development. Nine members of our current development team worked on Imitalstat when the drug was with Janssen, followed Imitelstat to Geron, and therefore have in-depth knowledge of Imitelstat's regulatory and clinical development history.
And that would be part of that was part of a submission in the future right. So we have to have that we have to demonstrate that we have control of that.
And that all of our protocols are being met.
That sounds like it's more or less what I would've expected, yes, I will hold my my follow up on a on amat suffer from mid year. Thanks, guys. Okay [laughter] okay.
Great. Thank you.
Your next question will come from line of Andrew Dsilva of B. Riley. Please go ahead. Your line is open.
Yes. Good afternoon. Thanks for taking my question sorry, if you did hit on the these I was jumping in between a couple other calls.
But.
As it relates to a Mds did you provide any additional information on patients.
John A. Scarlett: The combined depth and breadth of experience of our new hires in developing and commercializing blockbuster drugs, such as Imbruvica and Darzalex, empowers us to execute not only on our current and future trials but also to create and execute well-designed global development plans to enable potential commercial success. In 2020, our plans will focus on completing enrollment in the Phase III eMERGE clinical trial. Presenting at future medical conferences, additional Phase II data from both eMERGE and Lower Risk MDS and eMBARC and Relapse Refractory MS, deciding any potential late stage development path for myelofibrosis, and commencing a new proof-of-concept study in higher-risk MDS and AMS. Of these plans, our decision-related MF is probably the most anticipated.
Related to transfusions or as far as the ones that have.
Surpassed 141 weeks is that.
With that I mentioned in her remarks, no week, we will we will hold any further information for future medical conferences right. So we just reiterated some of the data from call last year, but we have not we haven't related any new information on this call.
Okay, Okay, but patients that your wherever still.
Oh, Yeah, we have patients who are still continuing on in in the phase two study for sure.
Okay. Okay, that's good to hear and.
As it relates to to the phase three obviously eight weeks it's.
John A. Scarlett: We had an FDA End of Phase II meeting in the fourth quarter of last year in which we discussed the results of our EMBARQ trial in myelofibrosis patients who were relapsed or refractory to jack inhibitors. Based on feedback from that meeting, we plan to submit Phase III trial design proposals for MF to the FDA, and in the second quarter of 2020, to have further discussions with the FDA regarding a potential regulatory approval path, if any, for Imitelstat and MS. Due to the sensitivity of ongoing interactions with the FDA, all of the specifics related to our clinical trial design proposals and other elements of our clinical development strategy NMF will remain confidential for now. We look forward to the opportunity of sharing more information by mid-year, which is when we expect to announce our decision regarding any potential late-stage development in MS. Also, related to MF, we expect to present at a major medical conference new analyses from the MBARC Phase II trial that correlate the median overall survival observed with other clinical endpoints from the trial.
The benchmark for you for your primary endpoint can you just talked about secondary endpoints and maybe how you think about that as your as you've gone through the trial and when you start thinking about actually its mission.
Yeah, absolutely it's a great question Andy Thanks.
First of all I'd like to say that the eight week transfusion free interval is in fact.
A it is a regulatory.
Milestone, our AR or efficacy endpoint that all regulators want to see it's a good way to look across comparative efficacy.
Across different drugs, but I have to tell you that many regulators, particularly I would say European regulators have emphasized the importance of longer durability than eight weeks and when we talk to physicians as MK wells. We also here exactly the same thing.
So I think we've been very pleased by the.
John A. Scarlett: We believe these new analyses will provide further support for the potential improvement in survival for these patients as an indication of disease-modifying activity of imitalostat treatment in myelofibrosis. After Olivia, our CFO, reviews our fourth quarter and year-end 2019 financial results as well as projected 2020 guidance. I'll discuss Imitelstat's mechanism of action, data from the Phase 2 eMERGE trial, the status of eMERGE in Phase 3, and our current thinking on potential additional indications.
By the 24 week durability. That's you know that that's that's been discussed and we continue to follow patients for long term durability, we think thats going to be a very important.
Story for this drug in lower risk Mds, So I'd say the two stories that I think are they're worth watching our that.
The the actual links and durability of of of.
Of transfusion pre intervals.
Olivia Kyusuk Bloom: Thank you, Chip, and good afternoon, everyone. For the fourth quarter of 2019, we reported a net loss of $29.1 million, or $0.15 per share, compared to $7.3 million, or $0.04 per share, for the fourth quarter of 2018. The net loss for the full year of 2019 was $68.5 million, or $0.36 per share, compared to $27 million, or $0.15 per share, for the full year of 2018. Revenues for the three-and-twelve months ended December 31, 2019, were $171,000 and $460,000, respectively, compared to $375,000 and $1.1 million for the same periods in 2018. Revenues for the three-and-a-half months ended December 31, 2019, and 2018, included royalty and license fee revenues under various non-Immittelstat license agreements. The decline in revenues reflects a reduction in the number of active research license agreements in 2019 related to our human telomerase reverse transcriptase, or HTERT, technology as a result of patent explorations on the underlying technology.
Also I would secondarily I would look at the degree to which.
Olivia Kyusuk Bloom: Total operating expenses for the three and 12 months ended December 31, 2019, were $30.2 million and $73 million, respectively, compared to $10 million and $32.1 million for the same period in 2018. Research and development expenses for the three and 12-month ends of December 31, 2019, were $24.9 million and $52.1 million, respectively, compared to $5.1 million and $13.4 million for the same period in 2018. The increase in research and development expenses compared to the same periods in 2018 primarily reflects costs for the transition of the ImitelSTAT program, including resuming sponsorship of the ongoing ImitelSTAT clinical trials, expenses for startup activities for the eMERGE Phase III clinical trial, purchase of inventories of drug product, drug substance, and raw materials from Janssen, and higher personnel-related costs for the expanding development team.
[music].
Transfusion burdens come down even if patients don't quite achieve a transfusion.
Free interval, that's often measured by.
I believe its whr criteria HIV, which means.
Effectively means a reduction in the transfusion burden and.
Olivia Kyusuk Bloom: General and Administrative Expenses for the 3 and 12 months ended December 31, 2019, were $5.3 million and $20.9 million, respectively, compared to $4.9 million and $18.7 million for the same period in 2018. The increase in general and administrative expenses compared to the same period in 2018, primarily reflects higher corporate and patent legal costs and increased personnel-related expenses for additional G&A headcount to support the development organization. Interest and other income for the three and 12 months ended December 31, 2019, was $925,000 and $4.2 million, respectively, compared to $1.1 million and $3.3 million for the same periods in 2018. The overall increase in interest and other income in 2019, when compared to 2018, primarily reflects higher yields on our marketable securities portfolio.
Physicians tell us that that's really important even if you can't quite reach no transfusions. If you can substantially take someone lets say who has eight or 10 units for eight weeks that they're requiring a lot of red blood cells over that period of time and reduce that's very substantially to less than four and in some cases only a couple that's that's actually.
Very clinically meaningful.
And so so I think.
So the durability of transfusion free intervals and the overall reduction and then of course, it's the patient population that it's occurring in its one thing to take a patient who's got a couple of units of Red cells. Every eight weeks that they require that's still important it's still important to get them to be transfusion free but weve.
We've shown that we can achieve both eight weaken longer duration.
<unk> in patients who have a substantially greater transfusion burden that baseline. Thank all of that's really important.
As we go forward and as this area matures.
With new entrants and with them.
With the availability of modern therapies beyond each amaze.
Okay, Great now that that was very good color.
Just last question as far as new hires, though and the cash burn for 2020 about how much of that's going to be tied to.
New studies that concepts that you.
That you referenced.
I won't have I'm not.
<unk> provided the breakdown between the phase three and the proof of concept, but as you can imagine the proof of concept itself with commencing on toward the fourth quarter here, it's not going to be as big of a burden on on obviously, the overall burn, but just to give you a little bit of color related to the total operating guidance. The 70 to 75 I would.
Hey, I would tell you that the F. T E call for that is a little over a third.
The CMC or manufacturing.
Hi costs are about one fourth.
The trial costs, which are inclusive of the faced I mean as well as a proof of concept. Okay. It's about a fifth.
And then just general GNS kind of operating as a public company all those kinds of things you to facilities and all that kind of sounds about a six onesix the number.
Olivia Kyusuk Bloom: We ended the 2019 fiscal year with $159.2 million in cash and marketable securities. We expect these funds to be sufficient to continue the eMERGE clinical trial in 2020 and to commence a proof-of-concept study in 2020. Moving on to projected 2020 guidance, we expect operating expense burn to range from $70 to $75 million, which includes costs related to the global eMERGE Phase III clinical trial, validation of supply chain vendors for the manufacturing of Dimetelstats, and for their interactions with the FDA in connection with the planned submissions of Phase 3 trial design proposals in MF and discussion regarding a potential regulatory approval path in MF, and Commencement of the Approval Concept Study of The 2020 Projected Guidance does not include any late-stage clinical costs for MF since we have not made our decision regarding any potential late-stage development of MF, which we expect to occur by mid-year 2020.
Okay perfect. Thank you very much and best of luck on board.
Okay. Thank you very much.
Your next question will come from line of Tom Shrader of BTG. Please go ahead. Your line is open.
Hi, This is carried for Tom Thank for taking my question I have a couple my first question is on emerge play a phase three trial have you thought about stratifying patients on prior Liespotter suffuse are they likely to have less intact bone marrow after failing that drugs.
That's an interesting question, we don't know the answer to the latter part we do allow patients.
Who have prior experience with luspatercept into the study as you can imagine.
Since that drug.
Is scheduled for PDUFA date in the future.
Maam.
We haven't seen very many patients they would have to have been patients who would.
Olivia Kyusuk Bloom: As of December 31, 2019, the company had 46 employees. We plan to grow to a total of 55 to 60 employees by year-end 2020, of which the majority will be research and development personnel. The increase in headcount is reflected in our 2020 projected guidance. However, financial guidance is based on a set of assumptions at a point in time, and if the company's plans change, causing assumptions to be revised, then we expect to update guidance at that time. And with that, I will turn the discussion back to Chip.
A controlled clinical study and I'm not even sure if they would know whether they had been on who's patterns have dora or placebo. So we haven't seen it yet.
And I don't know how much will we'll we'll see in the future. It's I think I think not that many is my guess, but we do allow them in and kind of interested to see what happens. If in fact, we do get a few but I don't know anything about their status of their bone marrow et cetera et cetera. We just haven't we don't have any experience yet.
John A. Scarlett: Thanks, Olivia. Hematelstat has great promise in hematologic myeloid malignancies due to its unique mechanism of action, which results in telomerase inhibition. The progression and growth of these malignancies is driven by rapidly proliferating malignant progenitor cells, which have highly upregulated telomerase. By selectively inhibiting the telomerase activity in these cells, our clinical evidence to date indicates Imitelstat may have disease-modifying activity in multiple hematologic myeloid malignancies, including MDS and MS. This potential to be disease-modifying may fill a void in the current treatment landscape of these disorders. For example, myelofibrosis K-opinion leaders point out that a potential disease-modifying agent with a mechanism of action different from a JAK inhibitor would be highly desirable in order to both treat non-JAK inhibitor-responsive patients and to gain long-term benefits, including increased survival.
That's helpful. Thanks, and curious to know how do you expect to define high risk Mds patients given that Mds patients are less willing relative to AML patients to deal with drugs with some level of toxicity in other words high risk Mds has been a historical challenge to enroll to you.
See that as an issue.
You know first of all this a proof of concept study so whatever the numbers will be it will be pretty fairly small numbers of patients right.
I think once we have evidence whether the drug actually works and for example, each bank failures it will be.
Probably easier to predict the ease or lack thereof of enrollment.
I would say this.
Although we as a company don't have direct experience with in rolling and treating high risk Mds patients.
John A. Scarlett: Turning to lower-risk MDS, the Phase 2 eMERGE data presented at the European Hematology Association's Annual Congress in June 2019 continued to highlight meaningful and durable transfusion independence across all MDS subgroups, and most importantly, in patients with a high transfusion burden of greater than 4 units per 8 weeks. For example, we reported an 8-week transfusion independence, or TI, rate of 42%, and a 24-week TI Transfusion-free intervals lead to an improved quality of life, less time in the infusion chair, less cost, and reduced exposure to potential iron overload.
They have today H. amaze are really quite toxic drugs I don't think anyone should misunderstand or or or have any question about the fact that that h. amaze.
Require very careful monitoring cause a lot of toxicity.
And so I and lastly high risk Mds patients are really sick and and have varied diminished.
Survival compared to low risk Mds patients. So many of them also understand that.
Substantial proportion will transform to AML, if they live long enough and of course, that's really dismal survival once you transform.
John A. Scarlett: Four observations from the eMERGE data presented at EHA also highlighted the potential disease-modifying activity associated with imitelstat treatment in lower risk MDS. First, 75% of the eight-week TI responders also experienced a rise in hemoglobin of more than 3 grams per deciliter. This would not have occurred without the repopulation of normal hematopoietic cells and subsequent production of normal blood cells in the bone marrow. Second, the median duration of transfusion independence in eMERGE was reported to be 86 weeks, or over 20 months, with the longest duration-free period reported to be more than two and a half years, also clearly indicating modification of the underlying disease process. Third, of the three patients with poor cytogenetic risk in whom post-treatment karyotype data was available, two achieved a partial cytogenetic response as indicated by a reduction in cells with abnormal karyotypes.
John A. Scarlett: And more importantly, these patients achieved eight or more weeks of transfusion independence. Fourth, imitelstat decreased the amount of one of the most common mutations in MDS patients, which was SS3B1. Of the six patients with SF3B1, five had some reduction in the number of cells with this mutation, and after treatment with Imitelstat, they also achieved long-term transfusion independence.
So I think.
Lot of.
There's a lot of clamor within the community at least in the people. We talk to we we don't talk has many patients right. Because there are only accessible through very limited means, but we should talk to a lot of K wells key opinion leaders and treating physicians and I think they're very anxious to have additional therapies and I think.
They will be.
Very interested in in this type of study so I hope that explains kind of a little more color on how we're imagine this going.
Got it thanks on the color.
Sure.
This concludes our Kuni portion for today I will now turn the call back over to talk to Scarlett for closing remarks.
No so I'd like to thank everybody on the call for joining us today.
We look forward to the next three months the next quarter with a lot of anticipation I.
And where we certainly look forward to sharing any achievements that come our way.
Throughout the coming year. So thanks, an awful lot talk to you soon bye.
This concludes today's conference call you may now disconnect.
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John A. Scarlett: With patients remaining in the Phase II eMERGE trial, this year, we expect to present more mature data from the continued treatment and follow-up of these patients, including durability of transfusion independence. As I commented earlier in this call, we opened the eMERGE Phase III clinical trial in August of 2019, and the first patient was dosed in October 2019. 63% of the sites were open for enrollment as of the end of February.
John A. Scarlett: Well, with regard to COVID-19, yesterday the World Health Organization deemed infections with this agent to be a pandemic. As of today, Geron has not experienced any significant disruptions due to the virus. We have been able to continue to operate relatively seamlessly, particularly with the use of technology such as video teleconferencing, and to date, we haven't experienced any enrollment delays or supply chain issues in eMERGE related to COVID-19, although we are carefully monitoring both enrollment and the supply chain. Based on internal assessments, we anticipate there could be isolated enrollment delays in the future, for example, in Italy, due to travel restrictions. We also believe we have substantially mitigated the risk related to our supply chain because we believe we have sufficient drug supply to conduct our ongoing eMERGE clinical trial and have widely distributed this drug supply throughout the regions where we're conducting the trial.
John A. Scarlett: There's still a lot of uncertainty regarding the magnitude of the effects of COVID-19, including the length of time the pandemic will persist. Therefore, like any company that's conducting clinical trials, we could become significantly impacted by COVID-19 with respect to slower-than-expected patient enrollment or redistribution of drug supply, and we'll provide an update at our next quarterly call. We continue to expect completion of enrollment in the eMERGE Phase 3 trial by the end of 2020 and to achieve top-line results by mid-year 2022.
John A. Scarlett: In the Phase 3, we're enrolling the same population of lower-risk MDS patients who are relapsed or refractory to erythrocyte-stimulating agents and are using the same primary and secondary endpoints as in the Phase 2. Finally, in the second half of this year, we plan to expand the Imitel STAT program by commencing a proof-of-concept, single-agent study in higher-risk M These patients have a dismal prognosis after failure of hypomethylating agents. For example, following HMA treatment failure, higher-risk MDS patients have a median OS of approximately six months, and AML patients have a median OS of less than six months. There are currently no approved therapies to treat these HMA failure patients. As such, they represent a significant unmet medical need.
John A. Scarlett: We believe that based on the mechanism of action of Imitelstat, it may be efficacious in higher-risk MDS and AML. In addition, we've reported strong preclinical data that suggest that Imitelstat targets malignant stem cells in AML. We're still in the planning stages of this proof-of-concept study and expect to have more information to share at or before our second quarter conference call. We expect to begin this study by the end of the fourth quarter. In summary, this could be a defining moment, sorry, a defining year for Geron and Imitalstat. With a strong team in place to execute our 2020 plans, an ongoing phase three registration trial in lower risk MDS, upcoming clinical data updates to support Imitalstat's competitive advantage as a drug with potential disease-modifying activity in hematologic myeloid malignancies, potential future MF development plans, and a proof of We look forward to further advancing the development of Imitelstat. We believe that as we continue to formalize and achieve our 2020 plans, we will demonstrate we're firmly on the path to create new treatment options for patients and value for investors. So with that, now, we'd like to answer your questions. I'll turn the call back over to our operator.
Operator: As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, simply press the pound key. Your first question will come from the line of Chad Messer of Needham. Please go ahead; your line is open. Great, thanks for taking my questions. Just starting with the proof of concept study, just to be clear, it sounds like this is a single agent and HMA failure. Just wanted to confirm that. Is there any interest in doing Imitelstat combo studies?
John A. Scarlett: Yeah, thanks, Chad. So currently, we anticipate that this will be in HMA failures. So I'll confirm that. Second of all, with regard to combination studies, as you know, the challenge there is that you always have to think about competing toxicities from the combination agents. I think we'll probably have more to say about this in the future in terms of our thinking around how to develop the drug further, but for the moment, we don't have any planned combination studies on the books right now.
Chad Messer: I think, um... Unknown Speaker And then, as part of your operational goals for the year, you talk about reestablishing the manufacturing supply chain. Not something I ever remember worrying about. And hopefully, after you answer my question, that'll remain true.
Chad Messer: But what is there to do there? Is this something Janssen was doing and you got to get back control of? And you said you have drug supply for the ongoing clinical trial. So it's not for that. I presume this is for future trials and potential commercial supply.
John A. Scarlett: Yeah, I'm going to let Olivia comment on that. She's been all over it.
Olivia Kyusuk Bloom: You're right, Chad. So, as part of the guidance, I did say that some of those costs are related to verifying our supply chain vendors. So, as you may recall, Imitelset is contract manufactured out, and we have several vendors that we've utilized for many years. That entire supply chain vendor relationship was transferred to Janssen at the time of collaboration. They all have now transferred back to Geron. Now, with us being the sponsors of the study and with us now potentially potentially commercializing, obviously, we need to ensure the revalidation of the processes under our quality process.
Olivia Kyusuk Bloom: All right. And that would be part of a submission in the future, right? So we have to demonstrate that we have control of that and that all of our protocols are being met.
Chad Messer: That sounds like it's more or less what I would have expected. I will hold my follow-up on...
John A. Scarlett: I will hold my follow-up on MS until mid-year. Thanks, guys.
Operator: Thank you very much.
Operator: Our next question will come from the line of Andrew DaSilva. Riley.
Andrew DaSilva: Please go ahead. Your line is: Yeah, good afternoon. Thanks for taking my questions. And sorry, if you did hit on any of these; I was jumping in between a couple other calls.
John A. Scarlett: As it relates to MDS, did you provide any additional information on patients related to transfusions or as far as ones that have surpassed 141 weeks? Was that mentioned, any further remarks?
John A. Scarlett: No, we will hold any further information for future medical conferences, so we just reiterated some of the data from last year, but we haven't related any new information on this call.
John A. Scarlett: Okay, but patients that you're aware of are still...
John A. Scarlett: Oh, yeah, we have them.
John A. Scarlett: Okay, okay, that's good to hear. And as it relates to Phase 3, obviously, eight weeks is kind of the benchmark for your primary endpoint. Can you just talk about the secondary endpoints and maybe how you think about that as you're going through the trial and when you start thinking about actually making a submission?
John A. Scarlett: Yeah, absolutely. It's a great question, Annie.
John A. Scarlett: Thanks. First of all, I'd like to say that the eight-week transfusion-free interval is, in fact, a regulatory milestone or efficacy endpoint that all regulators want to see. It's a good way to look at comparative efficacy across different drugs. But I have to tell you that many regulators, particularly, I would say, European regulators, have emphasized the importance of longer durability than eight weeks. And when we talk to physicians and KOLs, we also hear exactly the same.
John A. Scarlett: So, I think we've been very pleased with the 24-week durability that's been discussed, and we continue to follow patients for long-term durability. We think that's going to be a very important story for this drug in lower-risk MDS. So, I'd say the two stories that I think are worth watching are the actual length and durability of transfusion-free intervals. And I would also, secondarily, look at the degree to which transfusion burdens come down even if patients don't quite achieve a transfusion-free interval. That's often measured by the, I believe it's WHO criteria, HIE, which means, you know, effectively means a reduction in the transfusion burden. And physicians tell us that that's really important, even if you can't quite reach no transfusions.
John A. Scarlett: If you can substantially take someone, let's say, who has 8 or 10 units per 8 weeks that they're requiring, there are a lot of red blood cells over that period of time, and reduce that very substantially to less than 4, and in some cases only a couple, that's actually very clinically meaningful. So I think the durability of transfusion-free intervals and the overall reduction, and then, of course, it's the patient population that it's occurring in. It's one thing to take a patient who's got a couple of units of red cells every eight weeks that they require, that's still important, it's still important to get them to be transfusion-free, but we've shown that we can achieve both eight-week and longer duration TIs in patients who have a substantially greater transfusion burden at baseline. So I think all of that's really important as we go forward and as this area matures with new entrants and, you know, with the availability of modern therapies beyond HMAs.
Olivia Kyusuk Bloom: Okay, great. Now that was very good color. And just last question, as far as new hires go and the cash burn for 2020, how much of that's going to be tied to, you know, new studies, the proof of concepts that you referenced?
Olivia Kyusuk Bloom: I'm not providing the breakdown between the Phase 3 and the Proof of Concept, but as you can imagine, the Proof of Concept itself commencing toward the fourth quarter of the year is not going to be as big of a burden on, obviously, the overall burn. But just to give you a little bit of color related to the total operating guidance of the 70 to 75, I would tell you that the FTE cost for that is a little over a third. The CMC, or Manufacturing, type costs are about one-fourth. The trial costs, which are inclusive of phase 3 as well as the proof of concept, okay, are about a fifth, and then just general GNA kind of operating as a public company and all those kinds of things, you know, facilities and all that kind of stuff is about a sixth, one-sixth of the number.
Andrew DaSilva: Okay, perfect. Thank you very much and best of luck going forward.
John A. Scarlett: Okay, thank you very much.
Operator: Your next question will come from the line of Tom Schrader of BTIG. Please go ahead; your line is open.
Operator: Hi, this is Kaveri from TOMS.
Kaveri: Thanks for taking my questions. I have a couple. My first question is on eMERGE. For your phase 3 trial, have you thought about stratifying patients on prior...
Operator: [inaudible]
John A. Scarlett: That's an interesting question. We don't know the answer to the latter part.
John A. Scarlett: We do allow patients who have prior experience with leucepatricept into the study. But, as you can imagine, since that drug is scheduled for a PDUFA date in the future, next month, we haven't seen very many patients. They would have to have been patients who would have been in a controlled clinical study, and I'm not even sure if they would know whether they had been on leucepatricept or placebo. So we haven't seen it yet, and I don't know how much we'll see in the future. I think not that many, my guess, but we do allow them in, and we're kind of interested to see what happens if, in fact, we do get a few. But I don't know anything about their status regarding their bone marrow, et cetera, et cetera. We just haven't – we don't have any experience yet.
Unknown Attendee: Curious to know, how do you expect to define high-risk MDS patients given that MDS patients are less willing relative to AML patients?
Unknown Attendee: Unknown Attendee, Anil Kapur, Aron Feingold, Faye Feller, Robert Driscoll, Ethan Markowski
John A. Scarlett: I don't see that as an issue.
John A. Scarlett: You know, first of all, this is a proof-of-concept study, so whatever the numbers will be, they will be fairly small numbers of patients, right? I think once we have evidence whether the drug actually works in, for example, HMA failures, it will probably be easier to predict the ease or lack thereof of enrollment. I would say this.
John A. Scarlett: Although we, as a company, don't have direct experience with enrolling and treating high-risk MDS patients, they have, today. HMAs are really quite toxic drugs. I don't think anyone should misunderstand or have any question about the fact that HMAs require very careful monitoring, cause a lot of toxicity, and so I... And lastly, high-risk MDS patients are really sick and have very diminished... Survival compared to low-risk MDS patients, but many of them also understand that a substantial proportion will transform to AML if they live long enough. And, of course, that's really dismal survival once you transform.
John A. Scarlett: So I think there's a lot of clamor within the community, at least, and among the people we talk to. We don't talk to as many patients, though, right because they're only accessible through very limited means. But we sure talk to a lot of KOLs, key opinion leaders, and treating physicians, and I think they're very anxious to have additional therapies, and I think they will be very interested in this type of study. So I hope that gives kind of a little more color on how we're imagining this going.
John A. Scarlett: Got it. Thanks for the caller. Sure.
John A. Scarlett: This concludes our Q&A portion for today. I will now turn the call back over to Dr. Scarlett for her closing remarks.
John A. Scarlett: I'd like to thank everybody on the call for joining us today. We look forward to the next three months, the next quarter, with a lot of anticipation. And we certainly look forward to sharing any achievements that come our way throughout the coming year. So thanks an awful lot. Talk to you soon. Bye.
Operator: And this concludes today's conference call. You may now disconnect.