Executive Summary / Key Takeaways

• Geron Corporation has transitioned to a commercial-stage biopharmaceutical company with the U.S. launch of RYTELO (imetelstat) for lower-risk MDS, a first-in-class telomerase inhibitor with a differentiated mechanism of action.
• Initial U.S. RYTELO sales in Q3 and Q4 2024 exceeded internal expectations, but revenue flattened in late Q4 and declined in Q1 2025 ($39.4M vs. Q4's $47.5M), primarily due to distributor inventory adjustments and slower-than-anticipated uptake in earlier treatment lines.
• Management is implementing a refined commercial strategy with increased investment, including expanding the field force by over 20% and enhancing targeting and education, aiming to drive new patient starts across the eligible population and build momentum throughout 2025.
• Recent non-equity financing ($125M royalty, $125M initial debt draw) has significantly strengthened the balance sheet ($457.5M cash/investments as of Q1 2025), providing funding for the foreseeable future and potentially to profitability based on internal projections, reducing reliance on equity markets.
• Key catalysts include the progress of the Phase 3 IMpactMF trial in relapsed/refractory myelofibrosis (85% enrolled, interim OS analysis H2 2026), which could substantially expand RYTELO's market opportunity, and the planned EU launch in select markets in 2026 via partners.

Setting the Scene: Geron's Evolution and the Promise of Telomerase Inhibition

Geron Corporation has embarked on a transformative journey, evolving from a research-focused biotechnology firm with roots in stem cell technology to a commercial-stage entity centered on its lead asset, RYTELO (imetelstat). This shift follows the U.S. Food and Drug Administration (FDA) approval of RYTELO in June 2024 for the treatment of adult patients with low- to intermediate-1 risk myelodysplastic syndromes (lower-risk MDS) with transfusion-dependent anemia. The company's history, marked by the divestiture of its stem cell assets in 2013 to focus on imetelstat, underscores a strategic pivot towards developing therapies for hematologic malignancies.

At the heart of Geron's strategy is imetelstat, a first-in-class telomerase inhibitor. This technology represents a differentiated approach, targeting the enzyme telomerase, which is often overactive in malignant cells. The company posits that inhibiting telomerase can reduce the proliferation of these malignant cells, potentially allowing for the production of new, healthy cells. This mechanism is believed to drive differentiated clinical benefits, potentially altering the underlying course of the disease rather than merely managing symptoms. Exploratory analysis from the Phase 3 IMerge trial in lower-risk MDS showed a correlation between imetelstat exposure and a reduction in mutation burden, particularly in long and durable responders, lending support to the hypothesis of disease modification. This technological differentiation is a core component of Geron's competitive positioning.

The market for hematologic malignancies, including MDS and myelofibrosis, is competitive, dominated by larger players such as Bristol-Myers Squibb (BMY), Incyte Corporation (INCY), and Novartis (NVS). These companies field established therapies like BMY's Reblozyl for MDS and INCY/NVS's Jakafi for myelofibrosis. Geron's RYTELO enters this landscape with a unique mechanism, aiming to capture market share by addressing areas of high unmet need, particularly in patients who have failed existing therapies or are ineligible for them. While larger competitors benefit from extensive commercial infrastructure, broad portfolios, and significant financial resources, Geron's advantage lies in the potential for imetelstat's mechanism to offer distinct clinical outcomes, such as durable transfusion independence and potential disease modification, which may differentiate it in specific patient subsets, including difficult-to-treat ring sideroblast negative (RS-) patients. However, Geron faces challenges related to its smaller scale, limited commercial experience compared to these giants, and the need to establish market acceptance for a novel therapeutic class. Indirect competition also exists from alternative treatments and emerging therapies like gene editing technologies, which could offer different cost or efficacy profiles in the future.

The RYTELO Launch: Early Performance and Strategic Adjustments

The U.S. commercial launch of RYTELO commenced in June 2024, marking Geron's transition to a revenue-generating company. Initial performance in the third and fourth quarters of 2024 was encouraging, with net product revenue reaching $28.2 million and $47.5 million, respectively, exceeding the company's internal expectations. This early uptake was supported by favorable developments, including the inclusion of RYTELO in the MDS NCCN Guidelines in July 2024 as a Category 1 and 2A treatment across various lower-risk MDS patient segments, and the issuance of a permanent J-code (J0870) effective January 1, 2025, designed to streamline billing and reimbursement. Payer access has also strengthened, with approximately 85% of U.S. covered lives now under favorable medical coverage policies as of April 2025.

However, the launch trajectory encountered headwinds in late 2024 and early 2025. Weekly sales growth flattened in the latter part of Q4 2024 and remained relatively flat (+1% demand) through Q1 2025 compared to the prior quarter. This resulted in a sequential decline in net product revenue in Q1 2025 to $39.4 million, primarily attributed by management to an inventory drawdown among distributors who had stocked up in Q4, as well as slower-than-expected new patient starts in earlier lines of therapy. While RYTELO is being utilized across the eligible patient population, the majority of early new patient starts have occurred in the third-line plus setting, rather than the second-line post-ESA or first-line ESA-ineligible patients where the company sees significant opportunity and differentiation, particularly in RS- patients.

In response to these early launch dynamics, Geron is implementing a refined commercial strategy and increasing investment. The core focus is on driving new patient starts across the breadth of the eligible patient population. This involves:

• Increasing brand awareness among high-decile hematologists who treat the largest number of lower-risk MDS patients.
• Refining marketing and medical efforts to enhance prescribing clarity and confidence, emphasizing where and how to use RYTELO effectively, including education on cytopenia management.
• Implementing programs to expand U.S. key opinion leader (KOL) support and advocacy.

Operationally, the company is expanding its customer-facing teams by more than 20%, adding key account managers, oncology clinical educators, and a new field-based regional marketing team. These new hires are expected to be in the field by early Q3 2025, aiming to improve reach and message delivery to targeted HCPs. The company is also refining its account and HCP targeting. Early indicators suggest some positive impact, with approximately 900 sites of care having utilized RYTELO as of April 2025 (an increase of nearly 300 since Q4 2024) and approximately two-thirds of accounts that previously ordered having reordered in Q1 2025. Demand grew approximately 10% in the four-week period ending April 25, 2025, compared to the prior four-week period, representing the highest month-over-month growth since October 2024. Management expects continued momentum to build throughout 2025 as these strategic and operational enhancements take effect.

Financial Position and Future Growth Drivers

Geron's financial health has been significantly bolstered by recent financing activities. As of March 31, 2025, the company held approximately $457.5 million in cash, cash equivalents, restricted cash, and marketable securities, a decrease from $502.9 million at the end of 2024, primarily reflecting cash used in operations ($48.0 million in Q1 2025) partially offset by cash from accounts receivable.

In November 2024, Geron completed two key non-equity financing transactions. The first was a capped synthetic royalty agreement with Royalty Pharma, providing $125 million upfront in exchange for tiered royalties on U.S. net sales of RYTELO (7.75% up to $500 million annually, 3% between $500 million and $1 billion, and 1% over $1 billion). These royalty payments are capped at 1.65 times the purchase price if reached by June 30, 2031, or 2.00 times thereafter, meaning Geron retains all sales beyond the cap. This agreement is accounted for as a financing liability, resulting in non-cash interest expense recognized over the estimated term. The second transaction was a $250 million senior secured term loan facility with Pharmakon Advisors. Geron drew $125 million (Tranche A) at closing, using a portion to repay existing debt. An additional $125 million is available in two tranches ($75M Tranche B, $50M Tranche C) until December 31, 2025, subject to customary conditions, including a revenue milestone for Tranche C. The loan matures in 2029 and bears interest at a variable rate (5.75% + 3-month SOFR, with a 3% SOFR floor).

These transactions, combined with anticipated net revenues from U.S. RYTELO sales, are expected to fund Geron's projected operating requirements for the foreseeable future. Management believes there are scenarios where this capital position could enable the company to reach profitability without needing additional equity financing, contingent upon meeting internal sales and operating expense expectations. The company's total operating expenses for 2025 are guided to be in the range of $270.0 million to $285.0 million, an increase from 2024 reflecting continued investment in commercialization (U.S. and EU prep), commercial supply redundancy, and post-marketing commitments. Interest expense is expected to increase due to the new debt and non-cash royalty expense. Cost of goods sold as a percentage of net product revenue is expected to benefit for the next 15-21 months from the sale of inventory expensed prior to FDA approval, while total gross-to-net adjustments are expected in the mid- to high-teens percentage range for the remainder of 2025. Material cash requirements include commercial purchase commitments totaling approximately $110.9 million as of March 31, 2025.

Beyond the current lower-risk MDS indication, Geron's pipeline holds potential future growth drivers centered on imetelstat. The pivotal Phase 3 IMpactMF clinical trial is evaluating imetelstat in patients with intermediate-2 or high-risk myelofibrosis who have relapsed after or are refractory to JAK inhibitor treatment. This trial, with overall survival as the primary endpoint, is approximately 85% enrolled as of May 2025. Based on current assumptions, the interim analysis for OS is anticipated in the second half of 2026, with the final analysis expected in the second half of 2028. Management believes a positive outcome and potential approval in this high unmet need population could significantly expand RYTELO's commercial opportunity, potentially doubling its market potential. Earlier-stage programs include the Phase 1 IMproveMF trial evaluating imetelstat in combination with a JAK inhibitor in frontline MF and the investigator-led Phase 2 IMpress trial in higher-risk MDS and acute myeloid leukemia, exploring potential expansion into other myeloid malignancies.

International expansion also represents a future growth avenue. Following a positive CHMP opinion in December 2024, the European Commission granted marketing authorization for RYTELO in March 2025 for certain lower-risk MDS patients. Geron is preparing for a planned commercialization in select EU markets starting in 2026. The strategy is to partner with experienced third parties for commercialization and marketing outside the U.S., allowing Geron to focus its resources primarily on the U.S. launch.

Risks and Challenges

Despite the progress, Geron faces significant risks. The success of RYTELO's commercialization in the U.S. is paramount and remains unproven, particularly the ability to drive uptake in earlier treatment lines. Market acceptance, pricing, and reimbursement dynamics could impact sales. Manufacturing reliance on third parties poses supply chain risks. The ongoing clinical trials, especially IMpactMF, carry inherent risks of failure, which would severely impact future growth prospects. Safety findings from commercial use or ongoing trials could lead to label changes or regulatory actions. Maintaining regulatory approvals and obtaining approvals in new indications or geographies is uncertain. Protecting intellectual property is critical against potential challenges.

Furthermore, the company is currently involved in securities class action and derivative lawsuits filed in March and April 2025, alleging false and misleading statements concerning RYTELO's commercial potential. These lawsuits are costly to defend and their outcome is uncertain, potentially resulting in substantial damages or settlements. Recent leadership changes, including the departure of the CEO and the search for a permanent successor, introduce uncertainties that could impact strategy and execution. Macroeconomic conditions, including inflation and rising interest rates, could affect financing terms and operational costs.

Conclusion

Geron Corporation stands at a pivotal juncture, having successfully transitioned to a commercial entity with the U.S. launch of RYTELO, a differentiated telomerase inhibitor for lower-risk MDS. While initial sales performance was strong, the recent flattening and Q1 2025 decline highlight the inherent challenges of a new product launch and the need to drive broader adoption across the eligible patient population. The company's strategic response, involving increased commercial investment and refined execution, is critical to overcoming these early headwinds and realizing RYTELO's potential in the U.S. market.

The recent non-equity financing has substantially improved Geron's financial flexibility, providing a runway to support ongoing operations, commercialization efforts, and pipeline advancement, potentially to profitability. The future commercial value proposition is further underpinned by the potential expansion into the relapsed/refractory myelofibrosis market, contingent on the outcome of the IMpactMF trial, and planned entry into the EU market. Investors should closely monitor the trajectory of U.S. RYTELO sales, the progress and data readouts from the IMpactMF trial, developments regarding the EU launch, and the resolution of ongoing litigation and leadership transitions as key indicators of Geron's ability to execute on its strategy and build long-term value.