Up to $50 Million in Additional Non-Dilutive Capital Potentially Available in 2023
Geron Corporation (Nasdaq: GERN), a late-stage clinical biopharmaceutical company, today announced an amendment to expand its existing loan facility with Hercules Capital, Inc. (NYSE: HTGC) and Silicon Valley Bank, from up to $75 million to up to $125 million.
“This expansion of our debt facility provides potential access of up to $50 million in additional non-dilutive capital in 2023, the year in which we expect top-line results from the Phase 3 IMerge trial in lower risk myelodysplastic syndromes in early January, and if the data are supportive, U.S. and EU regulatory filings thereafter,” said Olivia K. Bloom, Executive Vice President and Chief Financial Officer. “We believe these potential additional debt proceeds, when added to our current financial resources and the projected proceeds from exercises of currently outstanding warrants in 2023, will be sufficient to fund our projected level of operations, which includes preparatory activities for potential U.S. commercial launch of imetelstat in lower risk MDS, until the middle of 2024. Maintaining a strong balance sheet during this critical time period provides important financial and strategic optionality as Geron transforms from late-stage development to a commercial entity.”
Of the aggregate $125 million loan facility, $50 million is currently outstanding. The remaining $75 million is potentially available to Geron in four tranches. The first tranche of $20 million is available until September 15, 2023, subject to the achievement of certain clinical and financial milestones. The second tranche of $10 million is available to the Company through December 15, 2023, subject to the achievement of certain clinical and regulatory milestones, and satisfaction of certain capitalization requirements. The third tranche of $20 million is available to the Company from September 15, 2023 until September 15, 2024, subject to the achievement of certain clinical and regulatory milestones, and satisfaction of certain capitalization requirements. The final tranche of $25 million is available to the Company through year-end 2024, subject to approval from the lenders.
“We’re very excited to expand our partnership with Geron to support the Company’s efforts in advancing imetelstat as a potential transformative treatment for hematologic malignancies. The increased commitment is aimed to support Geron’s clinical, regulatory and commercialization efforts in this pivotal time in the Company’s development, and is yet another example of Hercules’ capabilities to support innovative life science companies through development and commercialization,” said Himani Bhalla, Managing Director at Hercules Capital.
“We are delighted to work with Hercules and support Geron’s continued development and potential commercialization of imetelstat,” said Peter Sletteland, Director at Silicon Valley Bank.
Geron is a late-stage clinical biopharmaceutical company focused on the development and potential commercialization of a first-in-class telomerase inhibitor, imetelstat, in hematologic malignancies. The Company currently is conducting two Phase 3 clinical trials: IMerge in lower risk myelodysplastic syndromes and IMpactMF in refractory myelofibrosis.
Use of Forward-Looking Statements
Except for the historical information contained herein, this press release contains forward-looking statements made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such statements, include, without limitation, those regarding: (i) that top-line results from the IMerge Phase 3 trial in lower risk myelodysplastic syndromes (MDS) are expected in early January 2023; (ii) that if the data from IMerge Phase 3 are supportive, there will be U.S. and EU regulatory filings thereafter; (iii) that the potential additional debt proceeds when added to Geron’s current financial resources and the projected proceeds from exercises of currently outstanding warrants in 2023 will be sufficient to fund the Company’s projected level of operations until the middle of 2024; (iv) that there will be a potential commercial launch of imetelstat in lower risk MDS in the U.S. in 2024; (v) that the $20 million first tranche is available subject to the achievement of certain clinical and financial milestones; (vi) that the $10 million second tranche is available subject to the achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization requirements; (vii) that the $20 million third tranche is available subject to the achievement of certain clinical and regulatory milestones and satisfaction of certain capitalization requirements; (viii) that the $25 million final tranche will be available to Geron following approval from the lenders; (ix) that imetelstat is a potentially transformative treatment for hematologic malignancies; and (x) other statements that are not historical facts, constitute forward looking statements. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. These risks and uncertainties, include, without limitation, those related to: (a) the timeline in (i) above may not be met due to the Company’s inability to manage the procedures necessary for obtaining the top-line results in IMerge Phase 3 or by the continuing COVID pandemic; (b) whether the top-line results from IMerge Phase 3 are positive and result in regulatory filings in the U.S. and EU; (c) whether the financial, clinical and regulatory milestones required for access to the various tranches are achieved; (d) whether U.S. and EU regulatory authorities approve imetelstat for commercialization; (e) whether the FDA or another regulatory authority imposes a clinical hold on IMerge Phase 3 that causes a delay in reporting top-line results or a cessation of the clinical trial; and (f) that imetelstat actually demonstrates in Phase 3 clinical trials that it is a transformative treatment for hematologic malignancies. Detailed information on the above risks and uncertainties and additional risks, uncertainties and factors that could cause actual results to differ materially from those in the forward-looking statements are contained in Geron’s periodic reports filed with the Securities and Exchange Commission under the heading “Risk Factors,” included in Geron’s quarterly report on Form 10-Q for the quarter ended March 31, 2022. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made, and the facts and assumptions underlying the forward-looking statements may change. Except as required by law, Geron disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances.