GERON CORPORATION Quick Quote: GERN 9.07 (Even)
Geron Corporation Reports 2005 Third Quarter Financial Results and Events
11/4/05
MENLO PARK, Calif., Nov 04, 2005 (BUSINESS WIRE) --
Geron Corporation (Nasdaq:GERN) today reported financial results for the three and nine months ended September 30, 2005.
For the third quarter of 2005, the company reported a net loss of $11.9 million or $(0.21) per share compared to $10.3 million or $(0.23) per share for the third quarter of 2004. Net loss for the first nine months of 2005 was $24.6 million or $(0.44) per share compared to $70.9 million or $(1.62) per share for the same period in 2004.
Revenues for the third quarter of 2005 were $673,000 compared to $101,000 for the comparable period in 2004. Revenues for the first nine months of 2005 were $5.4 million compared to $715,000 for the comparable period in 2004. The increase in revenues in 2005 primarily reflected the receipt of an upfront payment of $4 million in conjunction with the transfer of certain intellectual property rights to the company's new joint venture, stART Licensing, Inc. and revenue recognized from the license and option payment received in July 2005 from Merck & Co., Inc.
Operating expenses for the third quarter of 2005 were $13.6 million compared to $10.6 million for the comparable period in 2004. The increase in research and development expenses was primarily the result of higher personnel-related costs and increased purchases of materials to produce GRN163L. The decrease in general and administrative expenses in the third quarter of 2005 was primarily due to reduced external patent legal expenses as a result of the stART Licensing joint venture assuming prosecution and maintenance of certain nuclear transfer patents.
Operating expenses for the first nine months of 2005 were $32.6 million compared to $72.4 million for the comparable period in 2004. Operating expenses in 2004 included a non-cash charge of $45.2 million related to the acquisition of technology rights from Merix Bioscience, Inc. (now Argos Therapeutics, Inc.). Excluding that charge, the company's overall research and development expenses increased in 2005 as a result of higher personnel-related costs and increased consulting costs for clinical and regulatory matters.
Third Quarter 2005 Highlights:
-- Geron Corporation reported the initiation of clinical trials at two sites in the New York metropolitan area to test its lead anti-cancer compound, GRN163L, in patients with chronic lymphocytic leukemia (CLL).
-- Geron Corporation and Merck & Co., Inc. entered into a collaboration and license agreement to develop a cancer vaccine targeting telomerase utilizing Merck's expertise in vaccine technologies. The agreement includes an option to Merck to negotiate with Geron for rights to Geron's cancer vaccine program.
-- Charles J. Homcy, M.D. appointed to Geron's board of directors. Dr. Homcy holds A.B. and M.D. degrees from Johns Hopkins University and is currently the President and Chief Executive Officer of Portola Pharmaceuticals, a privately held biotechnology firm focused on developing novel cardiovascular therapies. He is the author of over 135 original publications in the field of molecular and clinical cardiology.
-- Geron scientists and collaborators published studies in the American Journal of Pathology showing that cardiomyocytes differentiated from human embryonic stem cells (hESCs) engraft when transplanted into the rat heart. The results provide proof of concept that transplanted hESC-derived cardiomyocytes survive and retain properties of cardiomyocytes, important for their use in the treatment of myocardial infarction.
-- Geron scientists and collaborators published research results in the journal Hepatology demonstrating efficacy of GRN163L in mouse models of human hepatocellular carcinoma and human metastatic lung cancer. The studies confirm and extend the broad potential of GRN163L for the treatment of cancer, and provide insights into how GRN163L works in inhibiting tumor growth and tumor metastases.
-- Geron closed a public offering of 6,900,000 shares of common stock, including 900,000 shares issued upon exercise of an option granted to the underwriter to cover over-allotments. The public offering price was $9.00 per share and the aggregate gross public offering price, including the shares issued upon exercise of the over-allotment option, was $62.1 million. Concurrent with the closing of the underwritten public offering, Merck & Co., Inc. exercised its warrant to purchase 2,000,000 shares of Geron common stock for total proceeds of $18.0 million.
Geron is a biopharmaceutical company developing and commercializing three groups of products: i) therapeutic products for oncology that target telomerase; ii) pharmaceuticals that activate telomerase in tissues impacted by senescence, injury or degenerative disease; and iii) cell-based therapies derived from its human embryonic stem cell platform for applications in multiple chronic diseases.
This news release may 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 in this press release regarding potential applications of Geron's technologies constitute forward-looking statements that involve risks and uncertainties, including, without limitation, risks inherent in the development and commercialization of potential products, need for future capital, dependence on collaborators and maintenance of our intellectual property rights. Actual results may differ materially from the results anticipated in these forward-looking statements. Additional information on potential factors that could affect our results and other risks and uncertainties are detailed from time to time in Geron's periodic reports, including the quarterly report on Form 10-Q for the quarter ended September 30, 2005.
GERON CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(In thousands, except THREE MONTHS ENDED NINE MONTHS ENDED share and per share SEPTEMBER 30, SEPTEMBER 30, amounts) 2005 2004 2005 2004 ----------- ----------- ----------- -----------Revenues from collaborative agreements $ 67 $ -- $ 118 $ --License fees and royalties 606 101 5,285 715 ----------- ----------- ----------- ----------- Total revenues 673 101 5,403 715Operating expenses: Research and development 12,183 8,900 25,480 22,099 Acquired in-process research technology -- -- -- 45,150 General and administrative 1,411 1,676 7,104 5,120 ----------- ----------- ----------- ----------- Total operating expenses 13,594 10,576 32,584 72,369 ----------- ----------- ----------- -----------Loss from operations (12,921) (10,475) (27,181) (71,654)Interest and other income 1,105 348 2,950 1,231Equity in losses of joint venture -- -- (12) --Interest and other expense (46) (175) (389) (507) ----------- ----------- ----------- -----------Net loss $(11,862) $(10,302) $(24,632) $(70,930) =========== =========== =========== ===========Basic and diluted net loss per share $ (0.21) $ (0.23) $ (0.44) $ (1.62) =========== =========== =========== ===========Weighted average shares used in calculation of basic and diluted net loss per share 57,225,184 45,442,854 55,567,371 43,719,086 =========== =========== =========== =========== CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, DECEMBER 31,(In thousands) 2005 2004 ------------- ------------ (Unaudited) (Note 1)Current assets: Cash, restricted cash and cash equivalents $120,208 $ 10,376 Marketable securities 79,536 110,118 Interest and other receivables 1,367 1,550 Other current assets 2,919 2,733 ------------- ------------Total current assets 204,030 124,777Property and equipment, net 2,326 2,089Deposits and other assets 2,834 3,876Intangible assets 565 1,131 ------------- ------------ $209,755 $131,873 ============= ============Current liabilities $ 8,767 $ 8,458Noncurrent liabilities 1,674 1,352Stockholders' equity 199,314 122,063 ------------- ------------ $209,755 $131,873 ============= ============Note 1: Derived from audited financial statements included in Geron's Annual Report on Form 10-K, filed with the SEC.
SOURCE: Geron Corporation
Geron Corporation David L. Greenwood, 650-473-7765
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