On August 3, 2016 Geron Corporation (Nasdaq:GERN) reported financial results for the three and six months ended June 30, 2016 and recent events (Press release, Geron, AUG 3, 2016, View Source;p=RssLanding&cat=news&id=2192600 [SID:1234514242]).
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For the second quarter of 2016, the company reported a net loss of $8.6 million, or $0.05 per share, compared to $9.4 million, or $0.06 per share, for the comparable 2015 period. Net loss for the first six months of 2016 was $17.5 million, or $0.11 per share, compared to $18.7 million, or $0.12 per share, for the comparable 2015 period. The company ended the second quarter of 2016 with $136.4 million in cash and investments and has not incurred any impairment charges on its marketable securities portfolio.
Revenues for the three and six months ended June 30, 2016 were $211,000 and $960,000, respectively, compared to $251,000 and $788,000 for the comparable 2015 periods. Revenues for the three and six month periods ending June 30, 2016 and 2015 included royalty and license fee revenues under various non-imetelstat license agreements.
Total operating expenses for the three and six months ended June 30, 2016 were $9.1 million and $18.9 million, respectively, compared to $9.7 million and $19.7 million for the comparable 2015 periods. Research and development expenses for the three and six months ended June 30, 2016 were $4.6 million and $9.6 million, respectively, compared to $4.8 million and $9.8 million for the comparable 2015 periods. General and administrative expenses for the three and six months ended June 30, 2016 were $4.5 million and $9.3 million, respectively, compared to $4.0 million and $8.6 million for the comparable 2015 periods. Operating expenses for the three and six months ended June 30, 2015 also included restructuring charges of $941,000 and $1.3 million, respectively, in connection with the company’s organizational resizing announced in March 2015.
The decrease in research and development expenses for the three and six month periods ending June 30, 2016, compared to the same periods in 2015, primarily reflects the net result of reduced personnel-related costs resulting from the March 2015 organizational resizing and lower costs for the manufacturing of imetelstat drug product, partially offset by higher costs for the company’s proportionate share of clinical development expenses under the imetelstat collaboration with Janssen Biotech, Inc. (Janssen). The company expects research and development expenses to increase during the remainder of the year as the clinical development of imetelstat continues in collaboration with Janssen. The increase in general and administrative expenses for the three and six month periods ending June 30, 2016, compared to the same periods in 2015, primarily reflects higher non-cash stock-based compensation expense and increased allocation of facilities and other overhead costs to general and administrative activities.
Interest and other income for the three and six months ended June 30, 2016 was $293,000 and $549,000, respectively, compared to $145,000 and $294,000 for the comparable 2015 periods. The increase in interest and other income for the three and six month periods ending June 30, 2016, compared to the same periods in 2015, primarily reflects higher yields on the company’s marketable securities portfolio.
Recent Company Events
In July 2016, three U.S. patents related to imetelstat were issued by the U.S. Patent and Trademark Office. U.S. 9,375,485 has claims covering the use of telomerase inhibitor compounds, including imetelstat, for alleviating at least one symptom of myelofibrosis or myelodysplastic syndromes, including chronic myelomonocytic leukemia, and is expected to remain in force until at least March 2033. U.S. 9,388,415 and U.S. 9,388,416 have claims covering methods for using imetelstat to inhibit the activity of telomerase and using imetelstat to inhibit cancer cell proliferation, as well as methods for using imetelstat to treat cancer, and are expected to remain in force until at least September 2024. These patents are related to Geron’s existing imetelstat composition of matter patent U.S. 7,494,982, which issued in 2009 and is expected to remain in force until at least December 2025. Further extension of patent terms may be available for regulatory review periods.
Geron’s portfolio of patents related to imetelstat and related products whose mechanism of action is telomerase inhibition have been licensed to Janssen under an exclusive worldwide license and collaboration agreement for all human disorders or medical conditions.