Geron Corp (GERN) Q2 2024 Earnings Call Highlights: Strong Financial Position Amid Early Rytelo ...
Cash, Cash Equivalents, and Marketable Securities: Approximately $430 million as of June 30, 2024.
Total Product Revenue (Net): Approximately $780,000 for the three and six months ended June 30, 2024.
Total Revenues: $882,000 for the three months and $1.2 million for the six months ending June 30, 2024.
Total Operating Expenses: $70.2 million for the three months and $126.7 million for the six months ended June 30, 2024.
Cost of Goods Sold: Approximately $17,000 for the three and six months ended June 30, 2024.
R&D Expenses: $30.8 million for the three months and $60.2 million for the six months ended June 30, 2024.
Selling, General, and Administrative Expenses: $39.4 million for the three months and $66.5 million for the six months ended June 30, 2024.
Full-Time Employees: 220 as of June 30, 2024, with plans to grow to 230-260 by year-end 2024.
Projected Full-Year 2024 Operating Expenses: Expected to be between $270 million and $280 million.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Rytelo, Geron Corp (NASDAQ:GERN)'s new drug, has been approved by the FDA and is commercially available in the US, showing strong early uptake with approximately 160 patients receiving the treatment.
The NCCN Guidelines have been updated to include Rytelo as a Category 1 and 2A treatment for lower-risk MDS patients, enhancing its competitive position.
Geron Corp (NASDAQ:GERN) has strong patent protection and regulatory exclusivity for Rytelo in the US, with potential patent term extension through August 2037.
The company has built a robust commercial infrastructure, enabling effective launch and distribution of Rytelo across the US, with rapid availability to healthcare providers.
Geron Corp (NASDAQ:GERN) has a solid financial position with approximately $430 million in cash, cash equivalents, and marketable securities, expected to fund operations into the second quarter of 2026.
Negative Points
The company is still in the early stages of the Rytelo launch, with uncertainties around long-term demand and patient uptake trends.
There is limited visibility into the specific patient demographics and treatment lines for those receiving Rytelo, making it difficult to assess market penetration.
The patent term extension process is expected to be lengthy, potentially taking three to five years for confirmation.
Operating expenses have increased significantly due to commercial launch activities, with projected full-year expenses between $270 million and $280 million.
Reimbursement processes and payer coverage for Rytelo are still being established, with a permanent J-code expected only in the first quarter of 2025.
Q & A Highlights
Q: Can you provide expectations for the year, particularly regarding revenue guidance and the J-code finalization? A: We are pleased with the early launch results but are not providing revenue guidance at this time. We expect the J-code to be finalized in the first quarter of 2025, though there is some variability in timing. Our sales force is fully engaged, and we anticipate continued strong performance.
Q: How would you characterize the initial 160 patients using Rytelo? Is this a bolus or sustainable demand? A: It's too early to definitively say if this is a bolus or sustainable demand. We believe the strong initial uptake reflects organic demand driven by positive factors such as the ODAC, a clean label, and favorable NCCN guidelines. We are seeing significant interest from healthcare providers.
Q: Of the 160 patients who started therapy, how many are paying for the drug, and are there any reimbursement issues? A: It's early to determine exact numbers, but we haven't faced any reimbursement issues so far. Our reimbursement process is in place, and even with a temporary J-code, customers are successfully pushing Rytelo through formularies.
Q: Are you seeing patients switching from other therapies to Rytelo, and is this expected to continue? A: We expect some patients to switch from other therapies, but we don't have detailed data on this yet. Our information is primarily based on demand from accounts, and we are working to gather more detailed insights over time.
Q: How do you view the current sell-side consensus estimates for Rytelo, and do you anticipate any changes based on NCCN guidelines? A: There is variance in sell-side models, particularly regarding annual cost per patient and duration of therapy. We plan to provide more guidance post-earnings call. The NCCN guidelines align well with our expectations and affirm the value we see in Rytelo across different patient subgroups.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.