Geron Corporation: scientific research, aging & cancer

Geron Corporation Reports 2005 Third Quarter Financial Results and Events
11/4/2005

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.

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