Back of the Envelope #2

[Hoosier Investor]

Knowns / Assumptions:
1) Average person on treatment = 150 lbs (68 kg)
2) LR-MDS Dosage = 7.1 mg/kg
3) Treatment Frequency = Every 4 weeks (3X per quarter)
4) Product Costs
-- 47mg Vial = $2,471
-- 188mg Vial = $9,884

Basic Computations:
1) 68kg X 7.1mg/kg = 483mg per treatment
2) 483mg = (2)(188mg) + (3)(47mg) = $21,181 per treatment
3) $21,181 X 3 treatments = $81,543 per quarter (per patient)

Q3 Results:
1) Per the Company, we had 160 patients on treatment as of Aug. 8th.
2) The consensus forecast was for $16.34M in Q3 revenue.
* $16.34M / $81,543 = 200 patients
3) Actual Q3 revenue = $28.2M
* $28.2M / $81,543 = 346 patients
4) Q3 Gross-to-Net Revenue Adjustment was 14% (per Michelle Robertson)
* $28.3M / ($81,543 X 0.86) = 402 patients (full quarter equivalent)

New Info / Observations:
1) In the Q&A portion, Michelle Robertson told us to model a 15% Gross-to-Net adjustment for future sales.
* She stated the actual G-T-N for Q3 was 14%.
2) We had 160 patients as of 8/8. Our Q3 revenues reflect an equivalent of 402 "full-quarter" patients.
* Actual number of patients at end of Q3 has to be in excess of 402 to achieve such results.
3) Break-Even = $70M / ($81,543 X .85) = ~1000 patients
* Michelle indicated we might reach BE status in 2-3 quarters.
4) There are an estimated 13,200 LR-MDS patients in the USA.
* Given the ineffectiveness of other treatments, a high percentage of LR-MDS patients will try Rytelo (at some point).
* At a 40% effective rate, we can assume a steady-state patient population of ~5300 LR-MDS patients.
* With a BE of ~1000 patients, one can see the profit potential associated with the USA LR-MDS market alone.
* Ex-US sales will be less profitable, but they will still be incremental to these figures.
5) Michelle stated (twice) the company expects to retire the Royalty agreement prior to the 6/30/2031 date.
* I invite readers to do the math on the cumulative sales required to achieve such an outcome. See terms below...

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.

[Ryan]

Went back to look at this Back of the Envelope and also see the reference to Royalty Pharma here….
By the way, Royalty Pharma reports their earnings on May 8, a day after Geron. Wonder if Geron coordinates that:

Knowns / Assumptions:
1) Average person on treatment = 150 lbs (68 kg)
2) LR-MDS Dosage = 7.1 mg/kg
3) Treatment Frequency = Every 4 weeks (3X per quarter)
4) Product Costs
-- 47mg Vial = $2,471
-- 188mg Vial = $9,884

Basic Computations:
1) 68kg X 7.1mg/kg = 483mg per treatment
2) 483mg = (2)(188mg) + (3)(47mg) = $21,181 per treatment
3) $21,181 X 3 treatments = $81,543 per quarter (per patient)

Q3 Results:
1) Per the Company, we had 160 patients on treatment as of Aug. 8th.
2) The consensus forecast was for $16.34M in Q3 revenue.
* $16.34M / $81,543 = 200 patients
3) Actual Q3 revenue = $28.2M
* $28.2M / $81,543 = 346 patients
4) Q3 Gross-to-Net Revenue Adjustment was 14% (per Michelle Robertson)
* $28.3M / ($81,543 X 0.86) = 402 patients (full quarter equivalent)

New Info / Observations:
1) In the Q&A portion, Michelle Robertson told us to model a 15% Gross-to-Net adjustment for future sales.
* She stated the actual G-T-N for Q3 was 14%.
2) We had 160 patients as of 8/8. Our Q3 revenues reflect an equivalent of 402 "full-quarter" patients.
* Actual number of patients at end of Q3 has to be in excess of 402 to achieve such results.
3) Break-Even = $70M / ($81,543 X .85) = ~1000 patients
* Michelle indicated we might reach BE status in 2-3 quarters.
4) There are an estimated 13,200 LR-MDS patients in the USA.
* Given the ineffectiveness of other treatments, a high percentage of LR-MDS patients will try Rytelo (at some point).
* At a 40% effective rate, we can assume a steady-state patient population of ~5300 LR-MDS patients.
* With a BE of ~1000 patients, one can see the profit potential associated with the USA LR-MDS market alone.
* Ex-US sales will be less profitable, but they will still be incremental to these figures.
5) Michelle stated (twice) the company expects to retire the Royalty agreement prior to the 6/30/2031 date.
* I invite readers to do the math on the cumulative sales required to achieve such an outcome. See terms below...

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.

[biopearl123]

Operating expenses expected to be 270-285 for year 2025
Last quarter income 48M (generously annualized to 200M)
Up coming income should include established patients (lets assume drop out rate of 50% to bias these assumptions in a less optimistic manner)
Q 1 numbers WAG at 75M (established patients 25 M plus new patients 50M) annualized 300M beats break even

This assumes new our new management is effective, new invigorated marketing, higher profile PRs, patient/doctor testimonials.

Not factored, ASH presentations, 2026 data from IMpact/IMprove/IMpress, updates on B-cell diseases, oral agent development

May 7th should tell the story.