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Geron Corporation Announces Up to $375 Million in Funding with Royalty Pharma and Pharmakon Advisors

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Geron (GERN) has secured up to $375 million in financing through agreements with Royalty Pharma and Pharmakon Advisors. The deal includes $250 million received at closing and access to an additional $125 million in debt. The funding comprises a $125 million synthetic royalty agreement with Royalty Pharma and $250 million in senior secured debt from Pharmakon Advisors. The financing will support RYTELO's commercial launch in the U.S., potential EU launch, Phase 3 IMpactMF trial in myelofibrosis, and supply chain investments.

Geron (GERN) ha assicurato fino a 375 milioni di dollari di finanziamenti attraverso accordi con Royalty Pharma e Pharmakon Advisors. L'accordo include 250 milioni di dollari ricevuti al momento della chiusura e accesso a ulteriori 125 milioni di dollari in debito. Il finanziamento comprende un accordo di royalty sintetica di 125 milioni di dollari con Royalty Pharma e 250 milioni di dollari in debito senior garantito da Pharmakon Advisors. Il finanziamento sosterrà il lancio commerciale di RYTELO negli Stati Uniti, un possibile lancio nell'UE, il trial di Fase 3 IMpactMF nella mielofibrosi e investimenti nella catena di fornitura.

Geron (GERN) ha asegurado hasta 375 millones de dólares en financiamiento a través de acuerdos con Royalty Pharma y Pharmakon Advisors. El acuerdo incluye 250 millones de dólares recibidos al cierre y acceso a otros 125 millones de dólares en deuda. El financiamiento comprende un acuerdo de regalías sintéticas de 125 millones de dólares con Royalty Pharma y 250 millones de dólares en deuda senior garantizada de Pharmakon Advisors. El financiamiento apoyará el lanzamiento comercial de RYTELO en EE. UU., un posible lanzamiento en la UE, el ensayo de Fase 3 IMpactMF en mielofibrosis y las inversiones en la cadena de suministro.

Geron (GERN)은 Royalty Pharma 및 Pharmakon Advisors와의 계약을 통해 최대 3억 7천 5백만 달러의 자금을 확보했습니다. 이 계약은 클로징 시 수령하는 2억 5천만 달러와 추가 1억 2천 5백만 달러의 부채 접근 권한을 포함합니다. 자금은 Royalty Pharma와의 1억 2천 5백만 달러의 합성 로열티 계약과 Pharmakon Advisors의 2억 5천만 달러의 선순위 담보부 채무로 구성됩니다. 이 자금은 RYTELO의 미국 상용화, 잠재적인 EU 출시, 골수 섬유증에 대한 3상 IMpactMF 시험 및 공급망 투자 지원에 사용될 것입니다.

Geron (GERN) a sécurisé jusqu'à 375 millions de dollars de financement grâce à des accords avec Royalty Pharma et Pharmakon Advisors. L'accord comprend 250 millions de dollars reçus lors de la conclusion et l'accès à un montant supplémentaire de 125 millions de dollars en dette. Le financement comprend un accord de royalties synthétiques de 125 millions de dollars avec Royalty Pharma et 250 millions de dollars en dette senior sécurisée de Pharmakon Advisors. Ce financement soutiendra le lancement commercial de RYTELO aux États-Unis, un lancement potentiel dans l'UE, l'essai de Phase 3 IMpactMF dans la myélofibrose et les investissements dans la chaîne d'approvisionnement.

Geron (GERN) hat bis zu 375 Millionen Dollar an Finanzierung durch Vereinbarungen mit Royalty Pharma und Pharmakon Advisors gesichert. Der Deal umfasst 250 Millionen Dollar, die bei Abschluss erhalten wurden, und Zugang zu weiteren 125 Millionen Dollar an Schulden. Die Finanzierung setzt sich aus einem 125 Millionen Dollar synthetischen Lizenzvereinbarung mit Royalty Pharma und 250 Millionen Dollar an vorrangigen gesicherten Schulden von Pharmakon Advisors zusammen. Die Finanzierung wird den kommerziellen Start von RYTELO in den USA, den möglichen Start in der EU, die Phase-3-Studie IMpactMF bei Myelofibrose und Investitionen in die Lieferkette unterstützen.

Positive
  • Secured $375 million in total financing to strengthen balance sheet
  • Immediate access to $250 million in gross proceeds
  • No scheduled amortization payments until 2029 maturity
  • No financial covenants on the loan facility
  • Exclusive ownership of RYTELO with no other royalties payable
Negative
  • New royalty obligations ranging from 7.75% to 1.0% on U.S. RYTELO sales
  • Variable interest rate of 5.75% plus three-month SOFR on the loan
  • $86.5 million used to repay existing debt

Insights

This substantial $375 million financing package significantly strengthens Geron's financial position for RYTELO's commercialization. The deal structure is particularly favorable with $250 million upfront and an additional $125 million available. The royalty terms with Royalty Pharma are tiered and capped, showing strong deal negotiation - 7.75% for sales up to $500 million, dropping to 3.0% and 1.0% for higher tiers.

The debt component offers attractive terms with no scheduled amortization and maturity in 2029. The interest rate of SOFR + 5.75% is reasonable given current market conditions. The deal provides important working capital while maintaining operational flexibility and avoiding immediate dilution to shareholders.

The strategic partnership with Royalty Pharma and Pharmakon validates RYTELO's commercial potential in the blood cancer market. The financing structure allows Geron to aggressively pursue both U.S. commercialization and EU expansion while advancing the Phase 3 IMpactMF trial in relapsed/refractory myelofibrosis. The investment by these prominent healthcare investors signals strong confidence in RYTELO's market position and growth trajectory.

The deal's structure preserves significant upside potential for Geron, with royalty obligations decreasing at higher revenue levels and capped total payments. This suggests management's confidence in achieving substantial commercial success that would minimize the long-term cost of this financing.

Geron received $250 million in gross proceeds at closing, with access to an additional $125 million in debt

Strengthens balance sheet to support the commercial launch of RYTELO™ in the U.S. and potential launch in the EU, the ongoing Phase 3 IMpactMF trial in relapsed/refractory myelofibrosis, and other uses

FOSTER CITY, Calif.--(BUSINESS WIRE)-- Geron Corporation (Nasdaq: GERN), a commercial-stage biopharmaceutical company aiming to change lives by changing the course of blood cancer, today announced up to $375 million in synthetic royalty and debt financings with Royalty Pharma and investment funds managed by Pharmakon Advisors, LP, of which $250 million in cash was provided at closing and another $125 million in debt is available. The transactions are comprised of a $125 million synthetic royalty with Royalty Pharma and $250 million of committed senior secured debt with investment funds managed by Pharmakon Advisors, LP.

“The substantial financial commitment of exceptional long-term partners like Royalty Pharma and Pharmakon Advisors strengthens our cash position and further solidifies our balance sheet, while providing flexibility to invest in our future,” said Michelle Robertson, Geron’s Executive Vice President, Chief Financial Officer. “We believe that the terms reflect the significant commercial potential of RYTELO. The proceeds are expected to enable us to support the commercial launch of RYTELO in the U.S. and potential launch in the EU, complete our Phase 3 IMpactMF trial in relapsed/refractory myelofibrosis, invest in supply chain redundancy for RYTELO, and our general working capital requirements.”

Royalty Pharma has provided $125 million at closing and will receive tiered royalty payments on U.S. net sales of RYTELO, ranging from 7.75% of annual net sales up to $500 million, 3.0% of annual net sales between $500 million and $1.0 billion, and 1.0% of annual net sales over $1 billion. Payments to Royalty Pharma will cease if the aggregate royalties payable through June 30, 2031, reach a multiple of 1.65 its investment, otherwise the royalty payments will continue until Royalty Pharma receives a multiple of 2.0 its investment. There are no other royalties payable on RYTELO, which was developed internally and is exclusively owned by Geron.

“RYTELO is an important therapy for the lower-risk MDS patient population, whom otherwise have limited options, and we look forward to its development in other hematologic malignancy indications. We are delighted to establish this partnership with Geron to help fuel their execution of significant commercial and development opportunities ahead,” said Pablo Legorreta, founder and Chief Executive Officer of Royalty Pharma.

Investment funds managed by Pharmakon Advisors, LP have committed to a 5-year, senior secured term loan of up to $250 million, of which a first tranche of $125 million has been drawn at closing. A portion of these proceeds were used to fully repay amounts owned under the Company’s existing loan with Hercules Capital, Inc. and Silicon Valley Bank ($86.5 million), which has been terminated. A second tranche of $75 million can be drawn at Geron’s option, subject to certain limited conditions, and a third tranche of $50 million can be drawn at Geron’s option upon reaching a specified RYTELO revenue milestone, in each case if requested prior to December 31, 2025. The facility contains no scheduled amortization payments, with all outstanding principal due at maturity in 2029, and there are no financial covenants. The loans bear interest at a variable rate per year equal to 5.75% plus the three-month Secured Overnight Financing Rate (SOFR), subject to a SOFR floor of 3.00%.

“The Geron team is driving commercial success in the U.S. with RYTELO, an innovative first-in-class telomerase inhibitor, and we look forward to supporting the company and management team as they plan for a potential launch in the EU and continue to develop the asset in additional hematologic malignancies,” said Pedro Gonzalez de Cosio, Chief Executive Officer of Pharmakon Advisors, LP.

TD Cowen served as financial advisor and Cooley LLP served as legal advisor to Geron. Goodwin Procter and Fenwick & West LLP served as legal advisors to Royalty Pharma and Akin Gump LLP served as legal advisor to Pharmakon Advisors, LP.

About Geron

Geron is a commercial-stage biopharmaceutical company aiming to change lives by changing the course of blood cancer. Our first-in-class telomerase inhibitor RYTELO™ (imetelstat) is approved in the United States for the treatment of certain adult patients with lower-risk myelodysplastic syndromes (LR-MDS) with transfusion dependent anemia. We are also conducting a pivotal Phase 3 clinical trial of imetelstat in JAK-inhibitor relapsed/refractory myelofibrosis (R/R MF), as well as studies in other myeloid hematologic malignancies. Inhibiting telomerase activity, which is increased in malignant stem and progenitor cells in the bone marrow, aims to reduce proliferation and induce death of malignant cells. To learn more, visit www.geron.com or follow us on LinkedIn.

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) the expected use of proceeds from the debt and synthetic royalty financings; (ii) projections and expectations regarding the sufficiency of the Company’s financial resources to fund its projected operating requirements, including to support commercial launch of RYTELO in the U.S. and complete its Phase 3 IMpactMF trial in relapsed/refractory myelofibrosis; (iii) the Company’s plans for the potential launch of RYTELO in the EU, subject to regulatory approval; (iv) the developmental and commercial potential of RYTELO; and (v) other statements that are not historical facts, constitute forward-looking statements. These forward-looking 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, risks and uncertainties related to: (a) whether Geron is successful in commercializing RYTELO (imetelstat) for the treatment of certain patients with LR-MDS with transfusion dependent anemia; (b) whether Geron overcomes potential delays and other adverse impacts caused by enrollment, clinical, safety, efficacy, technical, scientific, intellectual property, manufacturing and regulatory challenges in order to have the financial resources for and meet expected timelines and planned milestones; (c) whether regulatory authorities permit the further development of imetelstat on a timely basis, or at all, without any clinical holds; (d) whether any future safety or efficacy results of imetelstat treatment cause the benefit-risk profile of imetelstat to become unacceptable; (e) whether imetelstat actually demonstrates disease-modifying activity in patients and the ability to target the malignant stem and progenitor cells of the underlying disease; (f) that Geron may seek to raise substantial additional capital in order to continue the development and commercialization of imetelstat; (g) whether Geron meets its post-marketing requirements and commitments in the U.S. for RYTELO for the treatment of patients with LR-MDS with transfusion dependent anemia; (h) whether there are failures or delays in manufacturing or supplying sufficient quantities of imetelstat or other clinical trial materials that impact commercialization of RYTELO for the treatment of patients with LR-MDS with transfusion dependent anemia or the continuation of the IMpactMF trial; (i) that the projected timing for the interim and final analyses of the IMpactMF trial may vary depending on actual enrollment and death rates in the trial; (j) whether Geron stays in compliance with and satisfies its obligations under its debt and royalty financing agreements; and (i) whether the European Commission will approve RYTELO for the treatment of patients with LR-MDS with transfusion dependent anemia and whether the FDA and European Commission will approve imetelstat for other indications on the timelines expected, or at all. Additional 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 filings and periodic reports filed with the Securities and Exchange Commission under the heading “Risk Factors” and elsewhere in such filings and reports, including Geron’s quarterly report on Form 10-Q for the quarter ended June 30, 2024, and subsequent filings and reports by Geron. 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.

Aron Feingold

Vice President, Investor Relations and Corporate Communications

Kristen Kelleher

Associate Director, Investor Relations and Corporate Communications

investor@geron.com

media@geron.com

Source: Geron Corporation

FAQ

How much funding did Geron (GERN) secure in its 2024 financing deal?

Geron secured up to $375 million in total financing, with $250 million received at closing and access to an additional $125 million in debt.

What are the royalty terms for RYTELO sales under Geron's (GERN) agreement with Royalty Pharma?

Royalty Pharma will receive 7.75% on annual sales up to $500M, 3.0% on sales between $500M-$1B, and 1.0% on sales over $1B.

What are the terms of Geron's (GERN) loan agreement with Pharmakon Advisors?

The 5-year senior secured term loan of up to $250M has no scheduled amortization payments until 2029 maturity, with an interest rate of 5.75% plus three-month SOFR.

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Biotechnology
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FOSTER CITY