Geron Corporation Reports 2009 Third Quarter Financial Results and Events

http://www.businesswire.com/news/home/20091029006327/en

MENLO PARK, Calif.--(Business Wire)--
Geron Corporation (Nasdaq:GERN) today reported financial results for the three
and nine months ended September 30, 2009.

For the third quarter of 2009, the company reported net loss applicable to
common stockholders of $15.2 million, or $(0.17) per share, compared to $17.2
million, or $(0.22) per share, for the comparable 2008 period. Net loss
applicable to common stockholders for the first nine months of 2009 was $52.0
million, or $(0.59) per share, compared to $44.4 million, or $(0.57) per share,
for the comparable 2008 period.

Revenues for the third quarter of 2009 were $494,000, compared to $367,000 for
the comparable 2008 period. Revenues for the first nine months of 2009 were $1.1
million, compared to $2.3 million for the comparable 2008 period. Revenues for
the third quarter and year-to-date periods of 2009 and 2008 reflect royalty and
license fee revenue and collaboration funding revenue under various agreements.
Revenues for the first nine months of 2008 also included receipt of a $1.5
million milestone payment.

Interest and other income for the third quarter of 2009 amounted to $240,000,
compared to $1.2 million for the comparable 2008 period. Interest and other
income for the first nine months of 2009 was $1.1 million, compared to $4.5
million for the comparable 2008 period which reflects the lower interest rate
environment. The company has not incurred any impairment charges on its
marketable securities portfolio.

Total operating expenses for the third quarter of 2009 were $16.9 million,
compared to $18.3 million for the comparable 2008 period. Research and
development expenses for the third quarter of 2009 were $13.4 million, compared
to $14.2 million for the comparable 2008 period. Research and development
expenses decreased primarily as a result of the timing of purchases of drug
product for clinical trials. General and administrative expenses for the third
quarter of 2009 were $3.5 million, compared to $4.1 million for the comparable
2008 period.

Total operating expenses for the first nine months of 2009 were $53.0 million,
compared to $51.6 million for the comparable 2008 period. Research and
development expenses for the first nine months of 2009 were $42.3 million,
compared to $39.4 million for the comparable 2008 period. Overall research and
development expenses increased in 2009 as a result of hiring additional
personnel, increased clinical trial costs and increased production costs
associated with the GRNVAC1 clinical trial in AML and initiation of the GRNOPC1
clinical trial in spinal cord injury. General and administrative expenses for
the first nine months of 2009 were $10.7 million, compared to $12.2 million for
the comparable 2008 period. The reduction in general and administrative expenses
was primarily the result of lower legal costs associated with our patents and
consulting costs.

Third Quarter 2009 Highlights:

* Geron scientists published data in the journal Regenerative Medicine
demonstrating that dendritic cells (DCs) scalably manufactured from human
embryonic stem cells (hESCs) exhibit the normal functions of naturally occurring
human DCs found in the bloodstream. These findings support the use of
hESC-derived DCs in therapeutic vaccine applications for cancer and other
diseases.
* The U.S. Food and Drug Administration (FDA) placed Geron`s IND
(Investigational New Drug application) for GRNOPC1, a cell therapy for
neurologically complete, subacute spinal cord injury, on clinical hold pending
the agency`s review of new nonclinical animal study data. The data showed a
higher frequency of cysts, although their characteristics were similar to what
was observed in previous studies: non-proliferative, confined to the injury
site, smaller than the injury cavity and not associated with adverse clinical
outcomes. The company has identified new candidate markers and assays for
product release that are linked with cyst formation across all animal studies in
which cysts were found. The company is in discussions with the FDA to answer its
questions in anticipation of proceeding with the clinical trial.
* Calvin B. Harley, Ph.D., the company`s chief scientific officer (CSO) for
telomerase technologies, retired on September 15, 2009. Dr. Harley joined Geron
in 1993 and served as CSO since 1996. Dr. Harley will continue a relationship
with Geron in a senior advisory capacity.
* Shares of Geron common stock and warrants to purchase common stock were sold
to certain institutional investors for proceeds of $3.6 million. The proceeds
funded an equity contribution to ViaGen, Inc. to maintain Geron`s ownership
interest, and were in part used to repay a $1.5 million loan extended by Geron
to ViaGen.
* Corning Incorporated, Geron`s collaborator, presented data showing
multi-passage growth of multiple undifferentiated hESC lines and the subsequent
differentiation of one of these cell lines into cardiomyocytes. Corning is
developing novel synthetic surface matrices that support the growth and
differentiation of hESCs in a defined (animal-free) medium.

Conference Call

At 8:00 a.m. PDT / 11:00 a.m. EDT on Friday, October 30, Thomas B. Okarma,
Ph.D., M.D., Geron`s chief executive officer, and David L. Greenwood, Geron`s
chief financial officer, will host a conference call to discuss the company`s
third quarter and year-to-date results.

Participants can access the conference call via telephone by dialing
866-356-3093 (U.S.) or 617-597-5381 (international). The passcode is 61745709. A
live audio-only Webcast is also available through a link that is posted on the
events page in the Investors section of Geron`s Website at http://www.geron.com.
The audio Web broadcast of the conference call will be available for replay
until November 30, 2009.

Geron is developing first-in-class biopharmaceuticals for the treatment of
cancer and chronic degenerative diseases, including spinal cord injury, heart
failure and diabetes. The company is advancing an anti-cancer drug and a cancer
vaccine that target the enzyme telomerase through multiple clinical trials in
different cancers. For more information, visit www.geron.com.

This news release may contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Investors are cautioned that statements in this press
release regarding potential applications of Geron`s technologies and future
operating results constitute forward-looking statements that involve risks and
uncertainties, including, without limitation, risks inherent in the development
and commercialization of potential products, uncertainty of clinical trial
results or regulatory approvals or clearances, need for future capital,
dependence upon 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 June 30, 2009.

GERON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
(In thousands, except share and per share data) 2009 2008 2009 2008

Revenues from collaborative agreements $ 225 $ 74 $ 225 $ 240
License fees and royalties 269 293 896 2,019
Total revenues 494 367 1,121 2,259

Operating expenses:
Research and development 13,395 14,208 42,278 39,435
General and administrative 3,499 4,093 10,705 12,165
Total operating expenses 16,894 18,301 52,983 51,600
Loss from operations (16,400 ) (17,934 ) (51,862 ) (49,341 )

Unrealized gain (loss) on derivatives, net 966 (162 ) (287 ) 739
Interest and other income 240 1,197 1,128 4,513
Losses recognized under equity method investment - (229 ) (656 ) (229 )
Interest and other expense (30 ) (23 ) (116 ) (71 )
Net loss (15,224 ) (17,151 ) (51,793 ) (44,389 )
Deemed dividend on derivatives - - (190 ) -
Net loss applicable to common stockholders $ (15,224 ) $ (17,151 ) $ (51,983 ) $ (44,389 )

Basic and diluted net loss per share applicable to common stockholders $ (0.17 ) $ (0.22 ) $ (0.59 ) $ (0.57 )
Shares used in computing basic and diluted net loss per share applicable to common stockholders 89,402,642 78,752,645 87,370,361 77,841,505

CONDENSED CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, DECEMBER 31,
(In thousands) 2009 2008
(Unaudited) (Note 1)
Current assets:
Cash, restricted cash and cash equivalents $ 98,660 $ 110,164
Marketable securities 80,748 53,491
Other current assets 5,275 4,591
Total current assets 184,683 168,246

Property and equipment, net 4,265 4,386
Deposits and other assets 3,974 3,586
$ 192,922 $ 176,218

Current liabilities $ 9,359 $ 7,711
Noncurrent liabilities 525 52
Stockholders` equity 183,038 168,455
$ 192,922 $ 176,218

Note 1: Derived from audited financial statements included in the company`s Annual Report on Form 10-K for the year ended December 31, 2008.

Geron Corporation
Anna Krassowska, Ph.D., 650-473-7765
Investor and Media Relations
info@geron.com

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