Geron Corporation (GERN)
Q1 2010 Earnings Call
April 30, 2010 11:00 a.m. EST
David Greenwood - EVP, CFO
Tom Okarma - CEO
Mark Monane - Needham & Company
Ren Benjamin - Rodman
Steve Brozack - WBB Securities
Geron Corporation Q1 2008 Earnings Call Transcript
» Geron Corporation Q4 2007 Earnings Call Transcript
» Geron Corporation Q1 2010 Earnings Call Transcript
Good day, ladies and gentlemen and welcome to the first quarter 2010 Geron earnings conference call. My name is [Carissa] and I’ll be your coordinator for today. At this time all participants are in the listen only mode. We will be facilitating a question and answer session towards the end of today’s conference. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Mr. David Greenwood, Executive Vice President and Chief Financial Officer, please proceed.
Good morning and welcome to the call Geron earnings call. I’m David Greenwood. With me is Tom Okarma. This is an earnings related conference call and we will begin with a summary of operating results for the first quarter, our agenda then includes an overview of recent operating highlights at the company and a look forward with our program development plans for 2010.
Following that presentation by Tom we will have a general Q&A session. The first two informational items, in the event of forward-looking statements during this call, please understand that those comments are made subject to the Safe Harbor provisions of the Securities and Litigation Reform Act. Any forward-looking statement involves uncertainty and we refer you to the risk factors detailed in our filings with the SEC.
Secondly, all participations are currently in listen-only mode and the lines will open for the Q&A and this call is available for webcast replay until the end of May on the Geron website.
Revenues for the three-month period are attributable to collaborative agreements, royalties and interest. License fee income amounted to approximately $900,000 which is an increase over the 2009 period. We'd expect this number to total about $3 million for the year. Other cash inflows to the company during the quarter included $200,000 of interest income on the marketable securities portfolio.
Quarterly R&D expense was flat period-to-period but that is not to suggest that R&D expense will be flat for the year. R&D expense for the year will increase to begin funding of four Phase II trials with our Telomerase inhibitor. We are not adding numbers of FDEs. These are external costs for drug products, contract research organizations, trial sites. The G&A line item did increase. That’s attributable primary to higher patent legal cost, principally the Novocell interference that we filed.
We end the quarter with $167 million in cash on the balance sheet. Our net burn last year was $43 million. Our burn in 2010 will be higher, perhaps $50 million, driven by the cost of the oncology trials, preparation for reinitiation of the spinal cord injury trial with our OPC1 cell therapy and large animal studies in the cardio and chondrocyte programs, the former a safety study enforcing and the latter chief efficacy study.
There were no issues with the quarterly review by E&Y and our investment portfolio remains unimpacted by the continuing uncertainty in the markets. At this point I will turn it over to Tom.
Thank you, David, and good morning, everyone. Thank you all for dialing in today. Let me first turn to a busy presentation schedule in the first quarter, at least for me. I gave seven presentations in the quarter starting with the JPMorgan Health Care Conference in San Francisco followed by the BIO CEO Conference in New York. I also gave a plenary talk at the World Congress on stem cells in San Francisco on the 20th of January.
I went to London and gave a plenary on the SMi stem cell conference in mid-February and on the 16th gave a featured presentation on the stem cell program at the London Regenerative Network Conference. We went to Tokyo at the end of February and I presented at the Drugs and Biological Conference and lastly a featured presentation in Boston on the 24th of March at the Cambridge Cancer Stem Cell conference.
Turning now to board composition, on the 26th of March we announced the appointment of Thomas Hostetter, the Chairman’s Board of Directors, coincident with the retirement of Pat Zenner.
Thomas will also serve on the Board's Compensation Committee. It goes without saying how much we have benefitted from Pat’s nine years of service on our board. His 40 years of pharmaceutical and biotech experience provided us with valuable commercial insight and counsel.
We’re also obviously very pleased to welcome Thomas to our Board. He brings more than 30 years of pharmaceutical experience from a range of senior executive positions in research and development strategy and corporate development.
I’m going to turn now to the regenerative medicine side of the company. At the end of January this year we announced a collaboration to study our OPC1 product in models of Alzheimer’s disease. This work will take place in the laboratory of Professor Frank LaFerla at UC Irvine. The project was awarded a UC Discovery Research and Training grant.
This is one of several line extension opportunities that we are exploring for OPC1, our Glial Progenitor Cell Therapy for acute spinal cord injury. Other possible line extensions include stroke and multiple sclerosis and there are collaborations ongoing in those two potential applications.
The Alzheimer’s collaboration is based on published work, published last year in August in PNAS from the LaFerla lab that showed significant improvements in memory and neuropathologic changes in a triple-transgene mouse model of Alzheimer’s disease after the injection of lide murine neural stem cells.