Good day, ladies and gentlemen, and welcome to the Q1 2012 Geron Earnings Conference Call. My name is Laura, and I will be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I'd now like to turn the conference over to your host for today, Dr. Anna Krassowska, Head of Investor Relations. Please proceed.

Thank you. Good afternoon, and welcome to the Geron first quarter earnings call. With me on the call this afternoon are Dr. John Scarlett, our Chief Executive Officer; Graham Cooper, our Chief Financial Officer; Dr. Stephen Kelsey, our Head of R&D and Chief Medical Officer; and Olivia Bloom, our Chief Accounting Officer. Today's call is being webcast live on the company's website and will be available for replay until May 31. I would like to remind listeners that except for statements of historical fact, the statements in this conference call are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These include, without limitation, statements regarding the timelines and plans for Geron's research and product candidates and financial or operational projections or requirements, including the need for additional cash. These statements involve risks and uncertainties that can cause actual statements to differ materially from those in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in Geron's periodic reports filed with the Securities and Exchange Commission under the heading Risk Factors, including the annual report on Form 10-K for the year ended December 31, 2011. 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. I will now hand over to Graham Cooper, our CFO, to cover the first quarter financial results.

Thank you, Anna, and good afternoon. We will begin the call with a summary of our operating results for the quarter ended March 31, 2012. Our agenda then includes an overview from Chip Scarlett of recent operating highlights. Following those updates, we will be pleased to take your questions. In the first quarter 2012, Geron reported a net loss of $18.7 million or $0.15 per share, as compared to a net loss of $24.4 million or $0.20 per share for the first quarter of 2011. Revenues were $1.3 million for the first quarter of 2012 compared to $1.5 million for the first quarter of 2011. Revenues for the 2012 first quarter primarily reflected royalty and license fee revenues under various agreements. Total operating expenses for the first quarter of 2012 were $20.2 million compared to $25.9 million for the first quarter of 2011. Noncash operating expenses for the first quarter of 2012 were approximately $2.3 million and approximately $9.8 million for the comparable quarter in 2011. Noncash operating expenses consisted primarily of stock-based compensation and expense for stock issued for services. R&D expenses for the 2012 first quarter were $15.1 million compared to $16.8 million during the same period in 2011. Decreased overall R&D expenses reflect reduced personnel and related costs, and lower supply expenses as a result of discontinuation of the stem cell programs, partially offset by increased trial expenses for enrollment of our 4 Phase II clinical trials of imetelstat and the startup of the 2 Phase II clinical trials of GRN1005. G&A expenses for the 2012 first quarter were $5.1 million compared to $9.1 million during the first quarter of 2011. Reduced G&A expenses in the first quarter of 2012 primarily reflected a decline in personnel-related expenses, including noncash stock-based compensation expense. We ended the quarter with $136.9 million in cash and investments. We've provided guidance of cash spend of approximately $65 million for 2012, and we continue to support that estimate. Given our balance sheet and our projected spend for 2012, we continue to expect that we'll be adequately funded through and beyond the data readouts for all 6 of our ongoing Phase II clinical trials, which are expected to occur between now and mid-2013. Our projections do not depend on any funding gained from the divestiture of the stem cell programs, since we do not yet have an outcome from that process. I would like to now hand the call over to Chip to review highlights for the quarter.

Thanks, Graham. Good afternoon, everyone, and thank you for dialing in to our first quarter call. I'm going to try to keep my comments brief as we provided a relatively thorough business update on our fourth quarter call. Starting with imetelstat. At the beginning of February, we completed enrollment of our randomized Phase II clinical trial with imetelstat in patients with metastatic breast cancer. This is the first of 2 randomized controlled Phase II studies of imetelstat. We completed enrollment of 166 patients in this trial in just over a year, ahead of our projections. We believe this reflects the need for effective treatments for metastatic breast cancer and was driven by the interest among clinical investigators and patients for compounds with novel mechanisms of action against new targets in metastatic breast cancer, such as telomerase inhibition. This randomized clinical trial in HER2-negative metastatic breast cancer has been designed to study the effects of imetelstat in combination with paclitaxel chemotherapy. And that treatment will be compared to the progression-free survival of patients treated with paclitaxel alone. Approximately 1/3 of the patients enrolled in this trial are also receiving Avastin, and the results of the trial will be stratified for the concomitant use of that drug. Our other randomized Phase II clinical trial with imetelstat is in patients with advanced non-small cell lung cancer. This study has just completed enrollment, and that's new news. It is designed to study the effect of imetelstat in patients receiving the drug as maintenance therapy, following induction chemotherapy with the platinum-based doublet regimen. The comparator arm in this study receives standard of care which, following platinum-based induction chemotherapy, currently is observation and support of care. Patients with non-squamous tumor histology, who received Avastin during induction therapy are continuing to receive Avastin maintenance during the course…

[Operator Instructions] Your first question comes from the line of Brian Klein from Lazard Capital Markets.

So first to start, I'm just wondering, in the imetelstat trials in breast cancer and non-small cell lung cancer, is the rate of progression between patients that are on Avastin versus non-Avastin, are those rates the same? Or is it possible that you're going to see the patients not receiving Avastin progressing first?

Brian, are you talking about the data from the trial? Or the historic progression-free survival for Avastin versus paclitaxel alone?

Well I guess my question really is in regards to the fact that you're waiting for a certain number of events to occur, which is a smaller number than the total number of patients who were enrolled. And so I want to understand if there is the possibility that a larger cohort of the patients who are not on Avastin are going to be the ones that drive the primary endpoint?

Certainly all the assumptions are based on the basis that progression on taxol alone will be faster than progression on taxol plus Avastin. And so you are correct in that you might expect a fewer -- smaller proportion of the events that drive the overall analysis to come from the Avastin subpopulation. Having said that, the 2 primary analyses that we've intended to perform are for the overall population, which includes the patients with Avastin and the patients not getting Avastin. And then the subpopulation that's not getting Avastin. That was always built into the trial in the first place. But took on greater importance when the FDA removed the approval for Avastin in the United States.

Right. Is there a hypothesis that the interaction between imetelstat and Avastin would be synergistic?

There's no data to support synergy, but there is data to support additive effect.

Great. Then moving on to 1005, can you give us a sense if the enrollment is meeting your expectations?

Yes. So far, enrollment is in keeping with expectations. Although albeit at a somewhat premature early stage of both trials. But we have no reasons to be concerned about enrollment at this stage.

Can we expect an update on the original Phase I trial at this year's ASCO?

No, we've finalized the analysis for the Phase 1 -- both Phase I trials of the data was presented at the EORTC and CIACR meeting in November of last year, and both manuscripts have now been completed and have been -- in fact, I believe one of them has been published and the other one is either in press or about to be -- or has already been published and the second one is just about to be submitted for publication.

Your next question comes from the line of Ren Benjamin from Rodman.

Couple of questions. Just regarding imetelstat, and Graham, I think you mentioned that the latest analysis -- or maybe it was Chip who mentioned it, was latest analysis that allows you to expect those results to still occur in the fourth quarter of this year. Can you tell us when that was conducted? And who's conducting the analysis? Is it an outside data safety monitoring board? An internal board? And how often is everyone meeting? Or is it pretty much in real-time?

Maybe I'll take it, and let Steve glare at me if I get it wrong and correct me. I mean fundamentally, Ren, it's just a -- looking at the accumulation of events. We're blinded to -- with regard to treatment arm, et cetera, et cetera. We're just simply looking at the accumulation of events and then applying that to a kind of typical model for figuring out when you're going to reach the number of events that you've pre-specified in the protocol. So it's not terribly complex. And we look at it on a regularized but not everyday basis. And we just recently looked and that was the just at the accumulation -- pure accumulation of events and that gave us confidence to reaffirm the guidance.

And do we -- I know in the past, we've talked about what's the delta that you're looking for. But have we ever talked about how many events you're -- will trigger the end line?

No, we've not disclosed the actual number of events.

Okay, and then just switching gears quickly to the ET program. Can you give us your thoughts, especially given how enrollment is proceeding, has there been any internal discussions or even discussions with the regulatory bodies regarding a potential combination study with an approved JAK1, 2 inhibitor and how that might play into sort of the development plan of imetelstat and ET?

I'll let Steve take a crack at that.

There've been discussions with investigators and with other hematologists, we've not had any discussions with the regulatory authorities. As far as I'm aware, at the way things stand right now, is that there is a JAK2 inhibitor that's approved for myelofibrosis but there no JAK2 inhibitors approved for the treatment of essential thrombocythemia. What we are doing is, as you already heard, we're -- we wanted safety data efficacy in order to justify expansion of this program into other hematologic malignancies. So we have expanded the program into polycythemia vera and we're also considering expanding the program into other chronic hematologic malignancies such as myelofibrosis and myelodysplastic syndromes. And when we do that, we'll have to consider whether or not we, the placement of imetelstat in the context of what is current and standard of care.

And Steve, do we have any preclinical work that might give us some evidence one way or the other how that combination could fare?

Actually, at the moment we do not. We have -- I would say relaunched the preclinical assays surrounding imetelstat and hematologic malignancies, largely on the basis of the data that was presented at ASH by Gabriela Baerlocher, which we felt was sufficiently encouraging to want to significantly expand our preclinical efforts there. But as of today, I -- we don't have any data on combination of JAK2 inhibitors or imetelstat in preclinical models.

And speaking of data, just looking out over the next 6 to 9 months, maybe ending it around ASH, the ASH conference, can you give us a sense, will there be any more data presentations? Anything that we should be looking forward to?

I think at this stage, there is -- there's an intent to release data by the end of the year. And certainly ASH would be a very good forum for that. So if we submit abstracts for ASH and they are accepted for presentation, we will let you know.

Okay, and just one final question, Chip, I know you don't like necessarily commenting on it, but I'll ask it anyway. How are things progressing with the divestiture of the stem cell side of the business? Any color you can provide?

Confidential program -- confidential discussions are underway, and that's all I can comment on.

Your next question comes from the line of Cory Kasimov from JPMorgan.

This is Rashie. I'm wondering if you can provide us --

Well, we can't hear you very well. Could you speak a little closer.

This is Rashie in for Corey today. I was just wondering if you could provide us an update on potential partnership plans for imetelstat and 1005? And at this point, for imetelstat, do you think it would be better resolved to see the data first?

Yes. I think it's absolutely clear that it will be better, certainly will be better served to see the data first, and that's our intention. Reaching out and speaking with a variety of different potential partners certainly occurs long before that. We can't really comment on any of that today, those are obviously confidential discussions. But the answer is absolutely yes, you need to have data in order to be able to have meaningful conversations.

Your next question comes from the line of Chad Messer from Needham & Company.

Just regarding imetelstat in solid tumors, I was wondering if you could give us any idea of what possible next steps would be, assuming that one or both of the trials give us a positive readout near the end of the year. Is a pivotal trial on the boards for next? And any idea what that could potentially look like?

Sure, Chad. We have every intention of moving into pivotal trials if the -- if our internally prespecified criteria for success are met in Phase II. And at this stage, with some minor modifications based on changes in standard of care that have occurred in the United States and throughout Western Europe in the period of time that these trials have been running, we would expect the Phase III trials to look very similar to the Phase II trials.

Okay, fair enough. And I mean any idea when those potentially could get started? I mean, sometime in 2013, I would presume? Or is there a reason to expect it to take longer?

Well, there's no reason to expect it to take longer from a development perspective. The only reason it might take longer for Geron is if there are any issues surrounding the funding of those trials that may come out of the steps that we take on the back of receiving the data. But from a straightforward development perspective, it would be perfectly reasonable if we get Phase II data at the end of 2012 to expect us to be starting pivotal trials by the end of 2013.

Your next question comes from the line of Tony Recter [ph], private investor.

As a layperson, I apologize for the questions that I'm asking, and I've been a shareholder since '07 and certainly have been within the peaks and valleys of Geron. And quite candidly, I'm holding this in trust for my 6-year old grandson's college. But the bottom line is these are things that I don't understand. On the class action suit that was initiated regarding the July 2010 matters of the board diluting the stock or however it might be characterized, what's the status on that, please?

It was dismissed.

Okay, terrific. And then on the matters of -- in watching the stocks daily, and seeing the press releases daily, forgive me, and this is not a degrading question because I want you guys to succeed, but I see in your announcements, I see many, many people coming on board with great initials behind their name and title and whatever, and I don't understand that. Why is there either such a turnover or so many people joining Geron and leaving Geron?

Well, we had a large-scale departure of people as we divested the stem cell business. And, in turn, as we are continuing to reemphasize and we are reemphasizing the oncology business, we have a need for people skilled in those arts. And that's fundamentally who we're hiring. And I think we're very fortunate to have been able to hire some great people. So that's what we're doing today and why you see that relative turnover, as you say.

And the other aspect of that, almost on a parallel, is you're making a great many presentations at investor's conferences, et cetera, and whatever becomes of those? I don't -- I mean the stock has remained steadily down, and again, those actions and activities taking place, shouldn't this be reflected?

Well, I think that's in the eyes of the beholder. And as we know, individual investors, institutional and private investors make those choices. Our job is to go out, make sure that people have as full an accounting of what's going on as possible and to make sure that the markets are fully informed of our activities and our efforts in this area. So that's all we can do. I think you will continue to see that level of commitment on the part of management to getting the story out. Beyond that, we will hope that our results will justify people's interest in the company.

Well, I'm all for it. And just on -- on the upcoming shareholders' meeting, you asked for approval to go from 200,000 to 300,000 common stock. What will this do to my shares?

Graham, you want to comment about the rationale and reason for this and so forth?

Yes, the increase in authorization of shares?

Yes, sir.

Should not have any impact on you insofar as it doesn't actually increase the number of shares outstanding. The rationale for it and the reason we're doing it is to improve flexibility down the road. The time to do things like this are when you don't need to raise money and when you've got a strong balance sheet. And that's where we are now, and so the -- it's better to do these things earlier than later, in general. And we have about 160 fully -- 160 million fully-diluted shares outstanding, with 200 million authorized. And so we feel the desire to have flexibility down the road, should we decide to raise additional capital.

Just one other comment about that, for clarity's sake. Absent special meetings and a lot of very expensive things, you only really get one chance a year to do this, which is at proxy time. So that's the reason we've taken this action this year. It, just from an efficiency perspective, raising the total number of shares on the cap table makes sense right now.

I'm in Southern California. And should I desire, is it possible to attend the shareholder meeting in person?

So our shareholder meeting, I certainly -- I think was last year, but certainly this year will be an entirely virtual meeting. We think that, that really serves the benefit of everyone because many people don't have the opportunity to come up. So we're doing it all completely virtually, but I think you'll find it to be as informative as if it would be if it in -- perhaps even more informative than it would have been in person.

Okay. The last question, and I really feel privileged about your candid answers in addressing these issues. I feel privileged to talk to you gentlemen and ladies. Is it possible to get the shareholder report in person -- I have your e-mail address here.

The proxy?

Yes, the actual annual report.

Yes, you should have received it as a shareholder? Did you not?

No, my shares are being held through JPMorgan, and I don't -- got notice of the shareholder meeting through them.

You can actually just send an e-mail to me, to Anna, and send it to investor@geron.com with your mailing address, and we'll make sure you receive one.

Your next question comes from the line of David Wasseman [ph] , private investor.

I was on the last call. Last quarter you were very professional. I was actually talking to you about the stem cell -- the progress we're making on divesting our stem cells.

I remember.

Remember the call. And you were very professional. I appreciate you. I've been a stockholder for 7 years, Dr. Anna's known me 5. And I was also a stockholder at Tercica, 5, 6 years ago, when you sold that. So I know what you can do for shareholders. I have a lot of confidence in you. That said, with all due respect, can I just ask you a couple of, not difficult questions, but -- I know you're limited but it's stuff I really was hoping you can give some color on. You had a call earlier, a question earlier where someone stated they asked you about the progress on selling the stem cells, and you said it was confidential and you're limited on what you could release. And I understand that. But I want to try to weave one thing in, if I may. We are a plaintiff in a lawsuit with Viacyte, and that seems to be in the 8th or 9th inning. We're wrapping that up. We're the plaintiff, and I hope we get good news on that. So here's my question. It's a general question, but it's important. Is that case having any effect on us selling our stem cells? Meaning, any possible buyer would want to see the outcome of that case? Because they basically want to see what they're buying. So can you at least generalize and say if that, at least, has an effect? Not in the price, but on the timing. I hope I'm making sense on that. And then I have a follow-up.

I understand the question and I wish I can answer it, but I'm afraid all of the questions around the stem cell divestiture, whether they be with respect to timing, price, people involved in the activities, bidders, non-bidders, you name it, we're just really not in a position to be able to answer any questions about it. It's for the protection of the company and the protection of the process. So I apologize, I look forward to the day when we are able to give a full rendition of whatever comes out of this. But as of today, I can't say anything else. So I'm sorry.

Okay, and I have 2 quick follow-ups, if I may. I'll try to word it a different way, and if you can't, you can't. Let's say we were trying to buy a company, let's say we were attempting to buy a company, but they were in litigation and they were plaintiff, and you wanted to see if their patents were protected. Would that have a bearing on us going forward until the litigation was settled? I'm talking about if we were a purchaser? I'm just trying to get the mindset.

I understand the question. I honestly think that it's better for me just not to say anything. It's a -- these hypothetical questions have a way of coming back and haunting CEOs who make them on public calls. So I'm sorry, I'm just going to have to, forgive me, but I'm not going to be able to answer.

No problem. And I got actually 2 last questions. I'll try to be concise. The CFO, I believe, mentioned to the previous caller that there were 160 million diluted shares right now. Does that sound right?

In round numbers, yes.

And I appreciate that. When I do my own calculations on the market cap of the company, I'm more like about 130 million. Like if you took -- so where am I -- can you help me with my math on this, please?

Yes, so we have about 131 million common shares outstanding. And then we have options and warrants that are not, don't -- they're not issued common shares but they represent potentially dilutive securities, insofar as they could become common shares that you'd use what's called the treasury stock method to calculate their contribution to the overall share count, and hence the definition of fully diluted shares.

No problem. But if I want to do the math today on the market cap, we closed at I think $1.56, times the number of shares. I would use 131 million shares?

Depends on if you're trying to calculate basic market cap or fully diluted market cap.

Market cap.

So if you do it the way Yahoo! Finance probably does it, I think it'd be 130 million, yes.

Perfect. And this is the last question. And you guys are really doing a wonderful job, by the way, I mean it's tough out there, I know you're doing the best you can. Dr. Scarlett, this is the last question for you in legal. I know you're limited on the stem cell, but can you give us shareholders -- again, I've been a shareholder over 7 years, and can you give us some color on the Viyacyte lawsuit, I mean what, I'm separating that from the stem cells, but what can you tell shareholders about this pending litigation, we are the plaintiff where we actually stand to enhance shareholder value. So that's important.

So David, here's the deal. Unfortunately, when you -- I know that and actually I'm rather touched by the fact that many of our private shareholders like yourself and others who communicate with me a lot, view themselves as very much the owners of the company. And they certainly are. But on the other hand, because we're a publicly traded company, there are real limitations on that which we can share with individuals, that's why I can't tell you anything more if you call me up than I can tell you on this line. So it's just a fact of life that you do share in the ups and downs of our company, but with regard to information, we still are not in a position to share information about ongoing litigation, as we've talked about extensively the disposition of the stem cell business and so forth. So really, the -- we're limited in the type of information that we can give. We're giving you all that we can give. I think in all that is certainly responsible for us to give and that's pretty much it. So with regard to any pending litigation, including the litigation that you referenced, we're just going to have to decline from many comments. I apologize.

And this is all in 5 seconds. I know, I'll get off the line. I understand, doctor, and you know I have a lot of respect there, I'm not asking for an outcome or a prediction, but when do you think we'll have closure? Either way. That's all I'm looking for. I'm not asking respectfully, not for the outcome, not a prediction but as a shareholder, litigation -- you want to get closure, so can you at least give us some sort of timetable on when this might come to an end, without a prediction of the outcome.

I'm sorry, David. I think we're just going to have to leave it that we're not able to make any comments. I apologize.

Your next question comes from the line of Stamford Tram [ph].

I've been a stockholder, I think, since 1996. I just have a quick question. What's happening with our arrangement with GE Health and the cardiomyocytes. I remember [indiscernible] that would be a big money position arrangement. Are we still involved with GE? Are they using now cardiomyocytes?

Yes. So I think all we can really comment on, which is the publicly available information, is that the product's being sold on the market, but beyond that I don't think we can really go into it in any detail.

So when will we might receive revenue, I mean pertaining to the sales of the product?

I don't think we've got any comment about that today. Sorry.

Is there a reason why we can't comment on that?

I think it's back to the confidential nature of the arrangement between us and GE Healthcare.

Your last question comes from the line of Mark Berger from Mark Berger M&B.

I'm not asking about the divestiture of the stem cell line, but I strongly do believe that stem cells will have a significant impact upon medicine in the future. The chondrocytes, the myocardiocytes, even the hepatocytes, they all will have significant benefit. And why, since there is not going to be an immediate sale of these assets -- I'm not asking about the sale of the assets -- why, since there's not an immediate sale of the assets that would fund the company, that would help the company in the oncology limb of the company, why sell it at all? Why not see if the oncology side of the company is successful? If it is, the stock price will go up. You'll be able to generate more revenue and then you could reactivate that, the stem cells?

Well, I think that first comment is that I think we've made the decision from a strategic perspective to move away from the stem cell space and to commit the company to the oncology business. So I wouldn't want anyone to think that we were going to revisit certainly a few time in the near future, it will be very unlikely that we would revisit the issue of whether to become involved again in stem cells. With regard to the rest of the divestiture, the timing, monies that might or might not be available, I have to repeat my comment. [

No, I'm not questioning the divestiture itself. I was just questioning since there is no -- there's not going to be any immediate revenue stream from the divestiture, and the patent don't expire for another 10, 15 years, why not sit on it? I just don't understand that.

Well, those are your assumptions about timing, et cetera. We're not making any public predictions in that regard. So I think again, let's see what happens, and then we'll be -- when we're able to report any results or non-results, of the process, than I think we'll be in a better position to address those questions. But right now, it's a confidential process, and any kinds of commentary that I might make on timing or other elements of that nature are just really not appropriate for me to do. So I'm going to have to again say sorry, that I'm not able to answer your question.

There are no further questions at this time. I'd like to turn it over to Dr. John Scarlett, CEO, for closing remarks.

Thank you very much, everyone, for dialing in. I appreciate everyone's contributions and questions. We certainly do appreciate your continued support and I personally look forward to future communications as we continue to chart our progress throughout the year. Everyone, I hope you all have a great day. Thank you.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect.