Capital Raise Thoughts....

[Hoosier Investor]

I'm not exactly sure how the offerings play out, but there's no coincidence between today's closing price and the just announced $2.45 close of the stock offering. I believe the pricing results in one of two ways....

A) The price was pre-negotiated prior to yesterday's TLR announcement.
B) The price is a function of today's closing price.

Either way, you can see the influence of our wall street "friends" helping us out. I suspect it's scenario B, but I'm not for sure. In scenario B, the firms and their PCS clients (who are going to buy the shares) benefit at the lower stock prices. At least it's over now, and the shenanigans can subside a bit. Although, I suspect we'll still be subject to some shenanigans until the Jan 20th stock options expire.

BTW.....How long do you think it takes to negotiate a 133-page prospectus between seven (7) parties? I'm not sure, but I'd guess it could take a while. Anyway, however long it took is how long (minimum) that Geron management has known of the positive results. Of course, by starting the negotiations with six different firms, the upcoming results (and capital raising plans) would've become known to various people within the firms, their clients, their friends, outside hedge funds, etc. That's how we end up having ~200,000 call options written, and 120M share volume days. They knew the stock wasn't going to "go to" and "stay at" $5.00+ per share because of the capital raise plans. Thus, it's low risk to write call options at $4.00, $5.00, etc.

Just my interpretations & thoughts on the matter. Apologies for any incorrect interpretations. Sorry for the long shareholders (like me) who had to endure yet another painful and/or manipulation event. We've held & suffered through nearly 4.5 years of misery only to get shit on the same day as our long-awaited TLR results become public.

[Ryan]

I don’t know or have any input into the machinations you are speculating about. What I do know:

- Institutions wanted A LOT of shares
- Geron wanted / was willing to take more funds to the tune of hundreds of millions

Here is where long-term holders stand relative to this stock raise:

The share price was $2.02 last Thursday.
The offer price is higher then it has been for virtually every day since Sept 2018.
We know the data, and we know Imetelstat is safe and effective, and will be approved. (Last not least;))

And if anyone is up in arms about the offer price, can buy shares on the open market tomorrow around the same price.

Lastly, I can’t see any bad news on the horizon. We took the gut punch collectively, and we need to react individually based on what we know.
And we should see the JP Morgan announcement tomorrow. Conference is in SF and Geron execs will be the ‘Bells of the Ball’ at the event.

[kmall]

Ryan- well stated! -Kmall

[Hoosier Investor]

With commercialization highly likely, I wish Geron had pursued non-dilutive financing. For example, they could've negotiated an extension of their existing loan agreement, they could've negotiated a new loan agreement, they could've approached the bond (paper) market, or they could've relied on the upfront payment associated with licensing their ex-US rights. A combination of the first and last scenarios was my expectation.

There was a LOT riding on the outcome of this week's results. Existing shareholders deserve a premium based on the risk we took in purchasing & owning equity BEFORE the results were known. If individuals or entities wish to minimize their risk by waiting until AFTER the results are known, they should have to pay a premium for the shares (in the event of positive results such as ours). The recent sell-off doesn't seem natural to me (based on volume & share price trajectory), and it's allowing select entities to purchase at a discount with full knowledge of the results.

I agree we're in a good position going forward. The data couldn't have been much better. The nearly identical (P2 vs. P3) efficacy outcome shows consistency, control, and understanding. The results demonstrate an effective manufacturing process, distribution process, treatment protocol, and an ability to predict SAEs and efficacy based on prior results. Further, the results not only allow us to move forward in MDS, but they enable our pursuit of the other indications (MF, AML, etc).

Yesterday's sell-off pushed our market cap down to ~$1B. This seems low given the probability & magnitude of our opportunities. I expect the upfront cash payment for our ex-US rights to be substantial, but I don't have recent comparable data to inform my expectations. Further, I believe Anil's peak revenue ($1.2B) estimate for MDS is low based on the annualized (per patient) value obtained when dividing $1.2B by the projected number of patients. Both of these areas represent good topics to research. Given our probability of approval, I would expect our market cap to approach ~$2B by the time of our NDA submission.

I would like to better understand the ASXL1 results. As I recall from years back, that's the mutation you don't want. I recall it being associated with poor (very poor) outcomes. I also believe the ASXL1 mutation may be present & problematic in diseases beyond those under current consideration.

Finally, any further comments or contributions by me will be forward-looking. It upsets me to see long-term (risk taking) shareholders undercut in such a manner and I needed to vent. The "efficient market" theory taught in business schools doesn't always hold up.

[kmall]

HI- Excellent overall synopsis of where we currently stand given this week's events. It doesn't seem fair that those holding long positions in this company, who have weathered the majority of risk by investing long term don't somehow see a greater percentage of the benefits which typically are associated with being in a vested position for the length that many here have. However, life isn't exactly fair and it's the market. And as you stated, forward looking and thinking are probably our best options as individual investors moving forward.

With regards to the patient and revenue projections of $1.2B given by Anil Kapur, both are extremely conservative from the research I undertook several years ago. For starters, those estimates are based on the US and 5 largest markets in the EU: UK, Italy, France, Germany and Spain. Remember that there are 22 additional countries which fall under the EMA umbrella and another three countries from the EEA—Iceland, Norway, and Liechtenstein which are also currently under EMA jurisdiction.

https://en.m.wikipedia.org/wiki/Europea ... nes_Agency

Geron is leaving out a substantial portion of global patient population estimates and revenue streams. Canada, Mexico, South and Central America, Asia, Africa, the Middle East, Australia, Oceania and Caribbean are all absent in these projections. Furthermore, the patient population estimates themselves are also misrepresented by numerous factors: misdiagnosis, underreporting, average patient age increases in less developed nations by as much as 20yrs lower, age increases in overall population, pollution, amongst several other factors as I had earlier discovered almost 3yrs ago. Shameless plug time - Start here in the 6 part series "Go Big Or Go Home"....

viewtopic.php?f=1&t=973

...for links and additional findings if interested. It's quite eye-opening to see the magnitude of the MDS, MF and AML marketplace which Imetelstat may be a part of. Bottom line, it's approximately a $5B - $15B annual revenue stream potential. And these figures/estimates were mostly in 2016 and prior findings and obviously all pre-Covid, which as we all know has driven the price of everything up substantially these past 2yrs. So in essence, the $5B - $15B estimates are most likely 20% more if not higher.

I'm sure there is a reason for being conservative. Most likely since the US and top 5 European countries are what they are currently focused on. Perhaps some legalities attached? Anyway, I think once approved we start to realize the full scope of Imetelstat's potential as a drug targeting these and additional indications not to mention combinations and potentially solid tumors down the road. Until then, hopefully we get persistent positive news from this company moving forward on milestones obtained for the sake of both patients and investors alike. -Kmall

[biopearl123]

Great discussion guys, thank you for sharing your thoughts. It is pretty clear that there is no loyalty “dividend” for long term shareholders. The bare facts are that the stock price is about where it was right after Janssen left. The loyalty dividend is a “thank you” from Dr. Scarlett during the last company presentation at the time of TLR. The buyers who buy now share the same opportunity for stock appreciation as the long term share holders some of whom bought between 10 and 50 over the long long Geron winter. What is apparent is that the stock will only appreciate from here. The time to approval has almost certainly accelerated. Recall that COVID really slowed enrollment, I estimate we would have had results about a year ago. But those are the facts. So here is what I think will get us approval: smashing the primary end points of 8 week and 24 week TLR. Obviously. This data will continue to mature as did the part I of this study. But here is what will actually sell the drug. The secondary end points. The stuff we haven’t heard yet. Read the recent mission statement which reads in part: “ potential to extend and enrich the lives of patients living with hematologic malignancies. Its investigational first-in-class telomerase inhibitor, imetelstat, harnesses Nobel Prize winning science in a treatment that may alter the underlying course of these diseases.” Translation: enrich lives=less or no symptoms, alter the underlying course of these diseases= you will live longer. Recall the raging debate about the fact that most cancer treatments just don’t meaningfully prolong life. That will change in my opinion and that is what will sell this drug. Soon the word “potential and may”will be obliterated from Geron’s carefully worded statements. And that is what will carry the day. In the meantime don’t look or justice or anything beyond a Scarlett “thank you.” bp

[mistergern]

Well said BP - we Geronites are adept at adjusting our time horizons. Although I had picked out a new boat, I'll have to settle for a night out at Taco Bell. I do share your confidence and look forward to a long continuum of good fortune thanks to the success of this drug.

[huntingonthebluffs]

Great posts on this thread, thanks to all! I, most of us, know little about what transpires day to day at Geron, except for the few required public points on the map they have established for the financial community and regulators. And of course, there are the cautionaries about the forward-looking statements to balance and counteract any confirmation bias . Any marketing or promotional stuff put out, regardless of our knowledge base, is subjective, especially when comparing to competition and expectations. And most know that expectations are frequently precursors to disappointments and / or resentments, especially when we aren’t playing with a full deck.

I know there is a tremendous amount of knowledge, experience, industry connections, logic, data, trust worthiness, etc. going into the posts on ImetelChat. However, and not that it is prevalent here, but my business experience makes me aware that given circumstances with limited details, very bright and genius minds can use a significantly incomplete set of facts / data points and using their exceptional intelligence and logic, string together what is publicly known into a semblance of an explanation and conclusion. It natural to do that and sometimes we are in the ballpark with our conclusions. However, inside the actual business, the process usually involves many parallel processes of gathering the data, analyzing the data, reaching conclusions, making decisions and along the way forming or modifying the high-level strategy with stated objectives and goals. We are unable to do that here and to top that off; many of us, myself included, have outsized investments and excessive confirmation bias whether we want to admit it or not. So back to our “expectations”, which are mostly our version of “forward looking statements”, to be on target, we need to account for the distance (i.e. time) and windage.

Anyway, IMV, whatever has happened at Geron in the last few weeks or so, while maybe not passing the “smell test” with flying colors, probably has a lot more to do with other factors than just needing a couple hundred million more to commercialize. I/we can arrive at this point by asking what is unknown about the capital raise, progress on the oral drug goal, leukemia potential, the seeming low estimate on revenue, time to achieve/bring up to speed/utilize stage gated hiring personnel, ex-US partnerships, BO’s, applications/approvals, etc. The size of the map dwarfs the points we know about so a few of my thoughts only scratches the cortex.

1. What goals, objectives, strategy, etc. changed or were added to current plans to require / justify the cash raise?
2. How much time did the preparation for the capital raise require? Did an opportunity / need arise unexpectedly?
3. Did Geron not have enough cash to get through 2024, given the published go-to-market plan?
4. What are the reasons the capital raise was synced with the release of TLR?
5. How urgent was the capital raise and could it have been delayed (a day, week, month, quarter, etc.)
6. Why all the banks and how big a role did the banks and buyers have in justifying the capital raise now?
7. Is the cash raise all about the money, banks wanting more influence, schedules or other plan changes?
8. What are the new buyers’ intentions and what influence will they have with Geron, FDA, competitors, etc.?
9. Will Geron be able to significantly obtain more industry influence by expanding / diversifying ownership?
10. Are schedules in the stage gated plans and applications/approvals much too conservative?
11. What impacts does the cash raise have on patients and retail investors?
12. What will have more impact, the cash raise or the dilution?
13. How many of the knobs, buttons and gears involved in getting Imetelstat’s approval are out of Gerons control?
14. Etc., etc., etc.

Grinding away on all the open questions is due diligence some of which is prudent but to second guess everything that is going on at Geron during this catalyst rich timeframe is risky as there is so much we don’t know. However, I do appreciate all the bright minds here that can do that quite effectively deeply enrich our understanding. I do know there is always going to be some level of mismanagement, but while I could certainly be wrong, I don’t think it is major or significantly material. I also believe Dr. Scarlett and company are feeling very confident of their path forward right now and are predominantly spreading their wings / becoming more aggressive in their commercialization and product development plans rather than responding to any particular slant of mismanagement or mistakes. I do get the sense that Geron’s plans and strategy are likely changing, possibly rapidly. Does that justify the cash raise? I don’t know but I trust that it was well thought out and justified given the blood sweat and tears Geron, JS and company have put forth over the last several years, as other than the patients with unmet needs, regardless of their pay, let’s not forget they have proportionally the most skin in the game.

[kmall]

Huntingonthebluffs - as always excellent synopsis and observations all around. It is easy for us to play arm chair quarterback at times.... guilty as charged myself. However, one thing I noticed with regards to the Jan 4 TLR CC, was that they (Anil Kapur/Geron) had lowered their future annual potential revenue stream projection in LR-MDS from $1.5B down to $1.2B. A $300M decrease is quite significant and I'd be curious to know why that had changed at this time? -Kmall

[huntingonthebluffs]

Thanks, kmall, I didn't think it was 1.5, just remember 1.2 for MDS and 1.8 for MF. I did a quick check on late 2021 and 2022 presentations and it was 1.2. I probably missed the changes up and down from 1.2. Maybe IR could help, lol.

[biopearl123]

My recollection is 1.2 also. But thats from memory.