DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION | 9 Months Ended |
Sep. 30, 2022 shares | |
Cover [Abstract] | |
Entity Registrant Name | GERON CORP |
Entity Central Index Key | 0000886744 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2022 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 381,235,046 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | GERN |
Entity File Number | 000-20859 |
Entity Tax Identification Number | 75-2287752 |
Entity Shell Company | false |
Entity Address, Address Line One | 919 EAST HILLSDALE BOULEVARD |
Entity Address, Address Line Two | SUITE 250 |
Entity Address, City or Town | FOSTER CITY |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 94404 |
City Area Code | 650 |
Local Phone Number | 473-7700 |
Entity Interactive Data Current | Yes |
Title of 12(b) Security | Common Stock, $0.001 par value |
Security Exchange Name | NASDAQ |
Entity Incorporation, State or Country Code | DE |
Document Quarterly Report | true |
Document Transition Report | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 61,103,000 | $ 34,871,000 |
Restricted cash | 364,000 | 364,000 |
Marketable securities | 133,684,000 | 148,851,000 |
Interest and other receivables | 22,223,000 | 1,763,000 |
Prepaid and other current assets | 4,696,000 | 1,357,000 |
Total current assets | 222,070,000 | 187,206,000 |
Noncurrent marketable securities | 28,651,000 | |
Property and equipment, net | 733,000 | 650,000 |
Operating leases, right-of-use assets | 4,296,000 | 4,727,000 |
Deposits and other assets | 5,507,000 | 4,800,000 |
Total assets | 232,606,000 | 226,034,000 |
Current liabilities: | ||
Accounts payable | 8,183,000 | 6,687,000 |
Accrued compensation and benefits | 7,637,000 | 8,099,000 |
Operating lease liabilities | 919,000 | 901,000 |
Debt | 12,959,000 | |
Accrued liabilities | 53,111,000 | 29,834,000 |
Total current liabilities | 82,809,000 | 45,521,000 |
Noncurrent operating lease liabilities | 3,826,000 | 4,267,000 |
Noncurrent debt | 37,799,000 | 49,830,000 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock | 382,000 | 324,000 |
Additional paid-in capital | 1,479,417,000 | 1,398,006,000 |
Accumulated deficit | (1,371,007,000) | (1,271,741,000) |
Accumulated other comprehensive loss | (620,000) | (173,000) |
Total stockholders' equity | 108,172,000 | 126,416,000 |
Total liabilities and stockholders' equity | $ 232,606,000 | $ 226,034,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
License fees and royalties | $ 297,000 | $ 109,000 | $ 493,000 | $ 353,000 |
Operating expenses: | ||||
Research and development | 24,603,000 | 18,527,000 | 67,308,000 | 61,577,000 |
General and administrative | 15,642,000 | 7,256,000 | 29,784,000 | 21,793,000 |
Total operating expenses | 40,245,000 | 25,783,000 | 97,092,000 | 83,370,000 |
Loss from operations | (39,948,000) | (25,674,000) | (96,599,000) | (83,017,000) |
Interest income | 852,000 | 112,000 | 1,294,000 | 421,000 |
Interest expense | (1,817,000) | (1,058,000) | (4,877,000) | (2,605,000) |
Other income and (expense), net | (138,000) | (77,000) | 916,000 | 1,106,000 |
Net loss | $ (41,051,000) | $ (26,697,000) | $ (99,266,000) | $ (84,095,000) |
Basic net loss per share | $ (0.10) | $ (0.08) | $ (0.26) | $ (0.26) |
Diluted net loss per share | $ (0.10) | $ (0.08) | $ (0.26) | $ (0.26) |
Shares used in computing basic net loss per share | 405,237,474 | 328,934,491 | 380,659,049 | 326,552,763 |
Shares used in computing diluted net loss per share | 405,237,474 | 328,934,491 | 380,659,049 | 326,552,763 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (41,051,000) | $ (26,697,000) | $ (99,266,000) | $ (84,095,000) |
Net unrealized gain (loss) on marketable securities | 153,000 | 13,000 | (468,000) | (62,000) |
Foreign currency translation adjustments | 9,000 | 21,000 | ||
Comprehensive loss | $ (40,889,000) | $ (26,684,000) | $ (99,713,000) | $ (84,157,000) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) |
Balances at Dec. 31, 2020 | $ 210,947,000 | $ 310,000 | $ 1,366,188,000 | $ (1,155,629,000) | $ 78,000 |
Balances (in shares) at Dec. 31, 2020 | 310,566,853 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (27,824,000) | (27,824,000) | |||
Other comprehensive income (loss) | (43,000) | (43,000) | |||
Issuance of common stock in connection with at market offering, net of issuance costs | 16,234,000 | $ 8,000 | 16,226,000 | ||
Issuance of common stock in connection with at market offering, net of issuance costs (in shares) | 7,948,505 | ||||
Stock-based compensation related to issuance of common stock and options in exchange for services | 25,000 | 25,000 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services (in shares) | 4,549 | ||||
Issuance of common stock in connection with exercise of warrants | 12,000 | 12,000 | |||
Issuance of common stock in connection exercise of warrants (in shares) | 8,869 | ||||
Issuances of common stock under equity plans | 17,000 | 17,000 | |||
Issuances of common stock under equity plans (in shares) | 16,232 | ||||
Stock-based compensation for equity-based awards to employees and directors | 1,794,000 | 1,794,000 | |||
Balances at Mar. 31, 2021 | 201,162,000 | $ 318,000 | 1,384,262,000 | (1,183,453,000) | 35,000 |
Balances (in shares) at Mar. 31, 2021 | 318,545,008 | ||||
Balances at Dec. 31, 2020 | 210,947,000 | $ 310,000 | 1,366,188,000 | (1,155,629,000) | 78,000 |
Balances (in shares) at Dec. 31, 2020 | 310,566,853 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (84,095,000) | ||||
Comprehensive loss | (84,157,000) | ||||
Balances at Sep. 30, 2021 | 151,553,000 | $ 321,000 | 1,390,940,000 | (1,239,724,000) | 16,000 |
Balances (in shares) at Sep. 30, 2021 | 320,604,441 | ||||
Balances at Mar. 31, 2021 | 201,162,000 | $ 318,000 | 1,384,262,000 | (1,183,453,000) | 35,000 |
Balances (in shares) at Mar. 31, 2021 | 318,545,008 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (29,574,000) | (29,574,000) | |||
Other comprehensive income (loss) | (32,000) | (32,000) | |||
Stock-based compensation related to issuance of common stock and options in exchange for services | 23,000 | 23,000 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services (in shares) | 5,097 | ||||
Issuance of common stock in connection with exercise of warrants | 2,467,000 | $ 2,000 | 2,465,000 | ||
Issuance of common stock in connection exercise of warrants (in shares) | 1,897,472 | ||||
Issuances of common stock under equity plans | 187,000 | $ 1,000 | 186,000 | ||
Issuances of common stock under equity plans (in shares) | 151,618 | ||||
Stock-based compensation for equity-based awards to employees and directors | 1,973,000 | 1,973,000 | |||
Balances at Jun. 30, 2021 | 176,206,000 | $ 321,000 | 1,388,909,000 | (1,213,027,000) | 3,000 |
Balances (in shares) at Jun. 30, 2021 | 320,599,195 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (26,697,000) | (26,697,000) | |||
Other comprehensive income (loss) | 13,000 | 13,000 | |||
Comprehensive loss | (26,684,000) | ||||
Stock-based compensation related to issuance of common stock and options in exchange for services | 23,000 | 23,000 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services (in shares) | 5,246 | ||||
Stock-based compensation for equity-based awards to employees and directors | 2,008,000 | 2,008,000 | |||
Balances at Sep. 30, 2021 | 151,553,000 | $ 321,000 | 1,390,940,000 | (1,239,724,000) | 16,000 |
Balances (in shares) at Sep. 30, 2021 | 320,604,441 | ||||
Balances at Dec. 31, 2021 | 126,416,000 | $ 324,000 | 1,398,006,000 | (1,271,741,000) | (173,000) |
Balances (in shares) at Dec. 31, 2021 | 323,731,591 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (30,098,000) | (30,098,000) | |||
Other comprehensive income (loss) | (538,000) | (538,000) | |||
Stock-based compensation related to issuance of common stock and options in exchange for services | 15,000 | 15,000 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services (in shares) | 5,284 | ||||
Stock-based compensation for equity-based awards to employees and directors | 1,692,000 | 1,692,000 | |||
Balances at Mar. 31, 2022 | 97,487,000 | $ 324,000 | 1,399,713,000 | (1,301,839,000) | (711,000) |
Balances (in shares) at Mar. 31, 2022 | 323,736,875 | ||||
Balances at Dec. 31, 2021 | 126,416,000 | $ 324,000 | 1,398,006,000 | (1,271,741,000) | (173,000) |
Balances (in shares) at Dec. 31, 2021 | 323,731,591 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (99,266,000) | ||||
Comprehensive loss | (99,713,000) | ||||
Balances at Sep. 30, 2022 | 108,172,000 | $ 382,000 | 1,479,417,000 | (1,371,007,000) | (620,000) |
Balances (in shares) at Sep. 30, 2022 | 381,214,326 | ||||
Balances at Mar. 31, 2022 | 97,487,000 | $ 324,000 | 1,399,713,000 | (1,301,839,000) | (711,000) |
Balances (in shares) at Mar. 31, 2022 | 323,736,875 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (28,117,000) | (28,117,000) | |||
Other comprehensive income (loss) | (71,000) | (71,000) | |||
Issuance of common stock, pre-funded warrant and warrants to purchase common stock in public offering, net of issuance costs | 69,916,000 | $ 53,000 | 69,863,000 | ||
Issuance of common stock, pre-funded warrant and warrants to purchase common stock in public offering, net of issuance costs, (in shares) | 53,333,334 | ||||
Stock-based compensation related to issuance of common stock and options in exchange for services | 13,000 | 13,000 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services (in shares) | 4,637 | ||||
Issuances of common stock under equity plans | 761,000 | $ 1,000 | 760,000 | ||
Issuances of common stock under equity plans (in shares) | 589,913 | ||||
Stock-based compensation for equity-based awards to employees and directors | 2,058,000 | 2,058,000 | |||
Balances at Jun. 30, 2022 | 142,047,000 | $ 378,000 | 1,472,407,000 | (1,329,956,000) | (782,000) |
Balances (in shares) at Jun. 30, 2022 | 377,664,759 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (41,051,000) | (41,051,000) | |||
Other comprehensive income (loss) | 162,000 | 162,000 | |||
Comprehensive loss | (40,889,000) | ||||
Stock-based compensation related to issuance of common stock and options in exchange for services | 112,000 | 112,000 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services (in shares) | 3,071 | ||||
Issuance of common stock in connection with exercise of warrants | 3,638,000 | $ 3,000 | 3,635,000 | ||
Issuance of common stock in connection exercise of warrants (in shares) | 2,798,003 | ||||
Issuances of common stock under equity plans | 1,201,000 | $ 1,000 | 1,200,000 | ||
Issuances of common stock under equity plans (in shares) | 748,493 | ||||
Stock-based compensation for equity-based awards to employees and directors | 2,063,000 | 2,063,000 | |||
Balances at Sep. 30, 2022 | $ 108,172,000 | $ 382,000 | $ 1,479,417,000 | $ (1,371,007,000) | $ (620,000) |
Balances (in shares) at Sep. 30, 2022 | 381,214,326 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2021 | |
At The Market Offering | ||
Issuance costs | $ 374 | |
Public Offering of Common Stock and Warrants | ||
Issuance costs | $ 5,066 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (99,266,000) | $ (84,095,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 208,000 | 154,000 |
Accretion and amortization on investments, net | (9,000) | 1,137,000 |
Amortization of debt issuance costs/debt discount | 1,103,000 | 627,000 |
Gain on sales of equity investment | (1,233,000) | |
Stock-based compensation for services by non-employees | 140,000 | 71,000 |
Stock-based compensation for employees and directors | 5,813,000 | 5,775,000 |
Amortization of right-of-use assets | 431,000 | 403,000 |
Changes in assets and liabilities: | ||
Current and noncurrent assets | (24,506,000) | (3,363,000) |
Current and noncurrent liabilities | 23,888,000 | 7,136,000 |
Net cash used in operating activities | (92,198,000) | (73,388,000) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (291,000) | (104,000) |
Purchases of marketable securities | (97,336,000) | (116,482,000) |
Proceeds from maturities of marketable securities | 140,706,000 | 178,574,000 |
Proceeds from sales of equity investment | 1,594,000 | |
Net cash provided by investing activities | 43,079,000 | 63,582,000 |
Cash flows from financing activities: | ||
Proceeds from issuances of common stock from equity plans | 1,962,000 | 204,000 |
Proceeds from issuance of common stock and warrants in public offering, net of paid issuance costs | 69,916,000 | |
Proceeds from issuances of common stock from at market offerings, net of paid issuance costs | 16,234,000 | |
Proceeds from exercise of warrants | 3,638,000 | 2,479,000 |
Proceeds from debt financing | 10,000,000 | |
Debt discount and issuance costs for debt financing | (175,000) | |
Net cash provided by financing activities | 75,341,000 | 28,917,000 |
Net effect of unrealized losses and exchange rates on cash, cash equivalents and restricted cash | 10,000 | |
Net change in cash, cash equivalents and restricted cash | 26,232,000 | 19,111,000 |
Cash, cash equivalents and restricted cash at the beginning of the period | 35,235,000 | 10,288,000 |
Cash, cash equivalents and restricted cash at the end of the period | $ 61,467,000 | $ 29,399,000 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The terms “Geron”, the “Company”, “we” and “us” as used in this report refer to Geron Corporation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States, or U.S., generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any other period. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements for each of the three years ended December 31, 2021, included in our Annual Report on Form 10-K for the year ended December 31, 2021, or the Form 10-K. The accompanying condensed balance sheet as of December 31, 2021 has been derived from audited financial statements at that date. Since inception, we have incurred net losses and generated negative cash flows from operations. During the three and nine months ended September 30, 2022, we incurred net losses of $ 41,051,000 and $ 99,266 000 , respectively, and in the nine months ended September 30, 2022, we generated negative cash flows from operations of $ 92,198,000 . As of September 30, 2022, we had an accumulated deficit of $ 1,371,007,000 . We expect our accumulated deficit will increase significantly over time and do not expect to experience positive cash flows from operations in the near future. As of September 30, 2022, we had $ 195,151,000 of cash, restricted cash, cash equivalents, and marketable securities. 53,333,334 shares of our common stock and a pre-funded warrant to purchase 18,095,238 shares of our common stock, also known as the 2022 pre-funded warrant, together with accompanying warrants to purchase 35,714,286 shares of our common stock, also known as the 2022 stock purchase warrants. The net cash proceeds from this offering were $ 69,916,000 , after deducting the underwriting discount and other offering expenses paid by us and exclude any future proceeds from the exercise of the 2022 pre-funded warrant and 2022 stock purchase warrants. See Note 6 on Stockholders' Equity for further discussion of the April 2022 public offering. We believe our existing cash, cash equivalents and short-term marketable securities will be sufficient to fund our operations for a period of at least one year from the date of filing of this Quarterly Report on Form 10-Q. In any event, we will require substantial additional funding to further advance the imetelstat program, including through the completion of IMpactMF and IMproveMF and the planned investigator-led trials in AML and higher risk MDS, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF, and our need for additional funds may arise sooner than planned. If adequate funds are not available on a timely basis, if at all, we may be unable to pursue further development, including completing IMpactMF and IMproveMF, or commencing, conducting or completing potential future clinical trials of imetelstat, such as the planned investigator-led clinical trials in AML and higher risk MDS, or pursuing potential commercialization of imetelstat, which would severely harm our business and we might cease operations. Principles of Consolidation The condensed consolidated financial statements include the accounts of Geron and our wholly-owned subsidiary, Geron UK Limited, or Geron UK, a United Kingdom company. Geron UK was incorporated in September 2021, and its operations commenced in January 2022. We have eliminated intercompany accounts and transactions. We prepare the financial statements of Geron UK using the local currency as the functional currency. We translate the assets and liabilities of Geron UK at rates of exchange at the balance sheet date and translate income and expense items at average monthly rates of exchange. The resultant translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, on our condensed consolidated balance sheets. Net Loss Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding for the periods presented without consideration of potential common shares. In April 2022, we entered into an underwriting agreement in connection with a public offering of our common stock, pursuant to which we issued a pre-funded warrant to purchase 18,095,238 shares of our common stock, also known as the 2022 pre-funded warrant, together with accompanying warrants to purchase shares of our common stock. In May 2020, we entered into an underwriting agreement in connection with a public offering of our common stock, pursuant to which we issued a pre-funded warrant to purchase 8,335,239 shares of our common stock, also known as the 2020 pre-funded warrant, together with accompanying warrants to purchase shares of our common stock. The 2022 pre-funded warrant and 2020 pre-funded warrant are exercisable immediately at an exercise price of $ 0.001 per share. We included the 2022 pre-funded warrant and 2020 pre-funded warrant in the computation of basic net loss per share, as applicable, since their exercise price is negligible, and they may be exercised at any time. See Note 6 on Stockholders' Equity for further discussion of the April 2022 public offering. Diluted net income per share would be calculated by adjusting the weighted-average number of shares of common stock outstanding for the dilutive effect of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued, as determined using the treasury-stock method. Potential dilutive securities consist of outstanding stock options and warrants to purchase our common stock. Diluted net loss per share excludes potential dilutive securities for all periods presented as their effect would be anti-dilutive. Accordingly, basic and diluted net loss per share is the same for all periods presented in the accompanying condensed consolidated statements of operations. Since we incurred a net loss for the three and nine months ended September 30, 2022 and 2021 , the diluted net loss per share calculation excludes potential dilutive securities of 174,347,456 and 105,466,722 , respectively, related to outstanding stock options and warrants as their effect would have been anti-dilutive. Use of Estimates The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to accrued liabilities, revenue recognition, fair value of marketable securities and equity investments, operating leases, right-of-use assets, lease liabilities, income taxes, and stock-based compensation. We base our estimates on historical experience and on various other market specific and relevant assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. Fair Value of Financial Instruments Cash Equivalents and Marketable Securities We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We are subject to credit risk related to our cash equivalents and marketable securities. Our marketable debt securities include U.S. Treasury securities, municipal securities, government-sponsored enterprise securities, commercial paper and corporate notes. We classify our marketable debt securities as available for sale. We record available for sale debt securities at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses are included in interest income and are derived using the specific identification method for determining the cost of securities sold and have been insignificant to date. Dividend and interest income are recognized when earned and included in interest income on our condensed consolidated statements of operations. We recognize a charge when the declines in the fair values below the amortized cost bases of our available for sale securities are judged to be other than temporary. We consider various factors in determining whether to recognize an other than temporary charge, including whether we intend to sell the security or whether it is more likely than not that we would be required to sell the security before recovery of the amortized cost basis. Declines in market value judged as other than temporary result in a charge to interest income. We have not recorded any other-than-temporary impairment charges on our available-for-sale securities for the three and nine months ended September 30, 2022 and 2021 . See Note 2 on Fair Value Measurements. Leases At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating leases are included in operating leases, right-of-use assets and lease liabilities on our condensed consolidated balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of remaining lease payments over the expected lease term. The present value of remaining lease payments within the 12 months following the balance sheet date are classified as current lease liabilities. The present value of lease payments not within the 12 months following the balance sheet date are classified as noncurrent lease liabilities. The interest rate implicit in lease contracts is typically not readily determinable. As such, to calculate the net present value of lease payments, we apply our incremental borrowing rate, which is the estimated rate to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment as of the lease commencement date. We may adjust the right-of-use assets for certain adjustments, such as initial direct costs paid or incentives received. In addition, we include any options to extend or terminate the lease in the expected lease term when it is reasonably certain that we will exercise any such option. Lease expense is recognized on a straight-line basis over the expected lease term. For lease agreements entered into after January 1, 2019 that include lease and non-lease components, such components are generally accounted for separately. We have also elected not to recognize on our condensed consolidated balance sheets leases with terms of one year or less. Debt Issuance Costs and Debt Discounts Debt issuance costs include legal fees, accounting fees, and other direct costs incurred in connection with the execution of our debt financing. Debt discounts represent costs paid to the lenders. Debt issuance costs and debt discounts are deducted from the carrying amount of the debt liability and are amortized to interest expense over the term of the related debt using the effective interest method. Revenue Recognition We recognize revenue in accordance with the provisions of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , or Topic 606. In determining the appropriate amount and timing of revenue to be recognized under this guidance, we perform the following five steps: (i) identify the contract(s) with our customer; (ii) identify the promised goods or services in the agreement and determine whether they are performance obligations, including whether they are distinct in the context of the agreement; (iii) measure the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations based on stand-alone selling prices; and (v) recognize revenue when (or as) we satisfy each performance obligation. A performance obligation is a promise in an agreement to transfer a distinct good or service to the customer and is the unit of account in Topic 606. Significant management judgment is required to determine the level of effort required and the period over which completion of the performance obligations is expected under an agreement. If reasonable estimates regarding when performance obligations are either complete or substantially complete cannot be made, then revenue recognition is deferred until a reasonable estimate can be made. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. We allocate the total transaction price to each performance obligation based on the estimated relative stand-alone selling prices of the promised goods or services underlying each performance obligation. Estimated selling prices for license rights are calculated using an income approach model and include the following key assumptions, judgments and estimates: the development timeline, revenue forecast, commercialization expenses, discount rate and probabilities of technical and regulatory success. Following is a description of the principal activities from which we generate revenue. License fees and royalty revenue primarily represent amounts earned under agreements that out-license our technology to various companies. License Agreements We previously entered into several license agreements with various oncology, diagnostics, research tools and biologics production companies, whereby we granted certain rights to our non-imetelstat related technologies. Under these agreements, non-refundable upfront fees and annual license maintenance fees were considered fixed consideration, while milestone payments and royalties were identified as variable consideration. Since June 30, 2021, no active license agreements remain. In connection with the divestiture of Geron’s human embryonic stem cell assets, including intellectual property and proprietary technology, to Lineage Cell Therapeutics, Inc. (formerly BioTime, Inc. which acquired Asterias Biotherapeutics, Inc.) in 2013, we are entitled to receive royalties on sales of certain research or commercial products utilizing Geron’s divested intellectual property. Licenses of Intellectual Property. If we determine the license to intellectual property is distinct from the other performance obligations identified in the agreement and the licensee can use and benefit from the license, we recognize revenue from non-refundable upfront fees allocated to the license upon the completion of the transfer of the license to the licensee. For such licenses, we recognize revenue from annual license maintenance fees upon the start of the new license period. For licenses that are bundled with other performance obligations, we assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable upfront fees or annual license maintenance fees. At each reporting date, we reassess the progress and, if necessary, adjust the measure of performance and related revenue recognition. Milestone Payments . At the inception of each agreement that includes milestone payments, we evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price. For milestones that we do not deem to be probable of being achieved, the associated milestone payments are fully constrained and the value of the milestone is excluded from the transaction price with no revenue being recognized. For example, milestone payments that are not within our control, such as regulatory-related accomplishments, are not considered probable of being achieved until those accomplishments have been communicated by the relevant regulatory authority. Once the assessment of probability of achievement becomes probable, we recognize revenue for the milestone payment. At each reporting date, we assess the probability of achievement of each milestone under any current agreements. Royalties . For agreements with sales-based royalties, including milestone payments based on the level of sales, where the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (a) when the related sales occur, or (b) when the performance obligation, to which some or all of the royalty has been allocated, has been satisfied (or partially satisfied). At each reporting date, we estimate the sales incurred by each licensee during the reporting period based on historical experience and accrue the associated royalty amount. Restricted Cash Restricted cash consists of funds maintained in separate money market or certificate of deposit accounts for credit card purchases. Research and Development Expenses Research and development expenses currently consist of expenses incurred in developing and testing imetelstat and research related to potential next generation telomerase inhibitors. These expenses include, but are not limited to, payroll and personnel expense, lab supplies, non-clinical studies, clinical trials, including support for investigator-led clinical trials, raw materials to manufacture clinical trial drugs, manufacturing costs for research and clinical trial materials, sponsored research at other labs, consulting, costs to maintain technology licenses and research-related overhead. Our current imetelstat clinical trials are being supported by contract research organizations, or CROs, and other vendors. We accrue expenses for clinical trial activities performed by CROs based upon the estimated amount of work completed on each trial. For clinical trial expenses and related expenses associated with the conduct of clinical trials, the significant factors used in estimating accruals include the number of patients enrolled, the number of active clinical sites, and the duration for which the patients have been enrolled in the trial. We monitor patient enrollment levels and related activities to the extent possible through internal reviews, review of contractual terms and correspondence with CROs. We base our estimates on the best information available at the time. However, additional information may become available to us which will allow us to make a more accurate estimate in future periods. In that event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Depreciation and Amortization We record property and equipment at cost and calculate depreciation using the straight-line method over the estimated useful lives of the assets, generally four years . Leasehold improvements are amortized over the shorter of the estimated useful life or remaining term of the lease. Stock-Based Compensation We maintain various stock incentive plans under which stock options and restricted stock awards can be granted to employees, non-employee directors and consultants. We also have an employee stock purchase plan for all eligible employees. We recognize stock-based compensation expense based on grant-date fair values of service-based stock options on a straight-line basis over the requisite service period, which is generally the vesting period. For performance-based stock options with vesting based on the achievement of certain strategic milestones, stock-based compensation expense is recognized over the period from the date the performance condition is determined to be probable of occurring through the date the applicable condition is expected to be met and is reduced for estimated forfeitures, as applicable. If the performance condition is not considered probable of being achieved, no stock-based compensation expense is recognized until such time as the performance condition is considered probable of being met, if at all. If the assessment of probability of the performance condition changes, the impact of the change in estimate would be recognized in the period of the change. The determination of grant-date fair values for our service-based and performance-based stock options and employee stock purchases using the Black Scholes option‑pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. The grant-date fair value for service-based restricted stock awards is determined using the fair value of our common stock on the date of grant. We evaluate whether an adjustment to the assumptions of fair value of our common stock and historical volatility are required if observed prices of our common stock materially differ from historical information. The following table summarizes the stock-based compensation expense included in operating expenses on our condensed consolidated statements of operations related to stock options and employee stock purchases for the three and nine months ended September 30, 2022 and 2021, which was allocated as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Research and development $ 932 $ 924 $ 2,799 $ 2,655 General and administrative 1,131 1,084 3,014 3,120 Stock-based compensation expense included in operating expenses $ 2,063 $ 2,008 $ 5,813 $ 5,775 As stock-based compensation expense recognized in our condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, but at a minimum, reflects the grant-date fair value of those awards that actually vested in the period. Forfeitures have been estimated at the time of grant based on historical data and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We have not recognized any stock-based compensation expense for performance-based stock options on our condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021, as achievement of the specified strategic milestones was not considered probable at that time. Stock Options We grant service-based and performance-based stock options under our equity plans to employees, non-employee directors and consultants. The service-based vesting period for employee stock options is generally four years from the date of the stock option grant. Performance-based stock options vest upon the achievement of specified strategic milestones. The fair value of service-based stock options granted during the nine months ended September 30, 2022 and 2021 has been estimated at the date of grant using the Black Scholes option-pricing model with the following assumptions: Nine Months Ended September 30, 2022 2021 Dividend yield 0 % 0 % Expected volatility range 77.7 % to 81.6 % 77.7 % to 78.3 % Risk-free interest rate range 1.69 % to 3.77 % 0.51 % to 0.94 % Expected term 5.5 years 5.5 years Employee Stock Purchase Plan The fair value of employees’ stock purchase rights during the nine months ended September 30, 2022 and 2021 has been estimated using the Black Scholes option-pricing model with the following assumptions: Nine Months Ended September 30, 2022 2021 Dividend yield 0 % 0 % Expected volatility range 61.37 % to 86.48 % 50.7 % to 70.7 % Risk-free interest rate range 0.40 % to 2.79 % 0.09 % to 0.16 % Expected term range 6 months to 12 months 6 months to 12 months Dividend yield is based on historical cash dividend payments and Geron has paid no cash dividends to date. The expected volatility range is based on historical volatilities of our stock, since traded options on Geron common stock do not correspond to option terms and the trading volume of options is limited. The risk-free interest rate range is based on the U.S. Zero Coupon Treasury Strip Yields for the expected term in effect on the date of grant for an award. The expected term of stock options is derived from actual historical exercise and post-vesting cancellation data and represents the period of time that stock options granted are expected to be outstanding. The expected term of employees’ stock purchase rights is equal to the purchase period. Non-Employee Stock-Based Awards We measure share-based payments to non-employees based on the grant-date fair value of the equity awards. We recognize stock-based compensation expense for the fair value of the vested portion of non-employee stock-based awards on our condensed consolidated statements of operations. Segment Information Our executive management team represents our chief decision maker. We view our operations as a single segment, the development of therapeutic products for oncology. As a result, the financial information disclosed herein materially represents all of the financial information related to our principal operating segment. Recent Accounting Pronouncements New Accounting Pronouncements – Issued But Not Yet Adopted In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-13, Measurement of Credit Losses on Financial Instruments , or ASU 2016-13. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about an entity's expected credit losses on financial instruments and other commitments to extend credit at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology currently used today with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to develop credit loss estimates. Subsequent to issuing ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , or ASU 2018-19, for the purpose of clarifying certain aspects of ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief , or ASU 2019-05, to provide entities with more flexibility in applying the fair value option on adoption of the credit impairment standard. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , or ASU 2019-11, which expands the scope of the practical expedient that allows entities to exclude the accrued interest component of amortized cost from various disclosure. Entities that elect to apply the practical expedient must disclose the total amount of accrued interest that they exclude from their disclosures of amortized cost. ASU 2018-19, ASU 2019-05 and ASU 2019-11 have the same effective date and transition requirements as ASU 2016-13. ASU 2016-13 will be effective for fiscal years beginning after December 15, 2022, using a modified retrospective approach, for smaller reporting companies. Early adoption is permitted. We plan to adopt ASU 2016-13 and related updates as of January 1, 2023. We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , or ASU 2020-06. The key elements of ASU 2020-06 aim to reduce unnecessary complexity in GAAP for certain financial instruments with characteristics of liabilities and equity. In addressing the complexity, the FASB focused on amending the guidance on convertible instruments and the guidance on the derivatives scope exception for contracts in an entity’s own equity. For convertible instruments, the FASB decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock. For contracts in an entity’s own equity, the FASB observed that the application of the derivatives scope exception guidance results in accounting for some contracts as derivatives while accounting for economically similar contracts as equity. The FASB also decided to improve and amend the related earnings per share guidance. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years for public business entities that are not smaller reporting companies. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. We plan to adopt ASU 2020-06 as of January 1, 2024. We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements. Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on our condensed consolidated financial statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 2. FAIR VALUE MEASUREMENTS Cash Equivalents and Marketable Securities Cash equivalents, restricted cash and marketable securities by security type at September 30, 2022 were as follows: Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Included in cash and cash equivalents: Money market funds $ 17,362 $ — $ — $ 17,362 Commercial paper 34,159 — ( 7 ) 34,152 $ 51,521 $ — $ ( 7 ) $ 51,514 Restricted cash: Money market fund $ 93 $ — $ — $ 93 Certificate of deposit 271 — — 271 $ 364 $ — $ — $ 364 Marketable securities: U.S. Treasury securities (due in less $ 24,493 $ — $ ( 174 ) $ 24,319 Municipal securities (due in less than 3,000 — ( 50 ) 2,950 Government-sponsored enterprise 13,325 3 ( 29 ) 13,299 Commercial paper (due in less than 67,432 — ( 215 ) 67,217 Corporate notes (due in less than 26,068 — ( 169 ) 25,899 $ 134,318 $ 3 $ ( 637 ) $ 133,684 Cash equivalents, restricted cash and marketable securities by security type at December 31, 2021 were as follows: Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Included in cash and cash equivalents: Money market funds $ 24,207 $ — $ — $ 24,207 Commercial paper 7,499 — — 7,499 $ 31,706 $ — $ — $ 31,706 Restricted cash: Money market fund $ 93 $ — $ — $ 93 Certificate of deposit 271 — — 271 $ 364 $ — $ — $ 364 Marketable securities: U.S. Treasury securities (due in less than $ 15,585 $ — $ ( 18 ) $ 15,567 U.S. Treasury securities (due in one to 1,524 — ( 3 ) 1,521 Municipal securities (due in one to 3,000 — ( 15 ) 2,985 Government-sponsored enterprise 12,500 — ( 7 ) 12,493 Commercial paper (due in less than 84,398 2 ( 38 ) 84,362 Corporate notes (due in less than one year) 36,444 2 ( 17 ) 36,429 Corporate notes (due in one to two years) 24,224 — ( 79 ) 24,145 $ 177,675 $ 4 $ ( 177 ) $ 177,502 Cash equivalents and marketable securities with unrealized losses that have been in a continuous unrealized loss position for less than 12 months and 12 months or longer at September 30, 2022 and December 31, 2021 were as follows: Less Than 12 Months 12 Months or Longer Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses As of September 30, 2022: U.S. Treasury securities (due in $ 17,333 $ ( 147 ) $ 6,986 $ ( 27 ) $ 24,319 $ ( 174 ) Municipal securities (due in less 2,950 ( 50 ) — — 2,950 ( 50 ) Government-sponsored enterprise 2,956 — 4,971 ( 29 ) 7,927 ( 29 ) Commercial paper (due in less 99,936 ( 222 ) — — 99,936 ( 222 ) Corporate notes (due in less than 5,991 ( 15 ) 19,908 ( 154 ) 25,899 ( 169 ) $ 129,166 $ ( 434 ) $ 31,865 $ ( 210 ) $ 161,031 $ ( 644 ) As of December 31, 2021: U.S. Treasury securities (due in $ 15,567 $ ( 18 ) $ — $ — $ 15,567 $ ( 18 ) U.S. Treasury securities (due in 1,521 ( 3 ) — — 1,521 ( 3 ) Municipal securities (due in one 2,985 ( 15 ) — — 2,985 ( 15 ) Government-sponsored enterprise 1,500 — 4,993 ( 7 ) 6,493 ( 7 ) Commercial paper (due in less 66,872 ( 38 ) — — 66,872 ( 38 ) Corporate notes (due in less than 16,001 ( 17 ) — — 16,001 ( 17 ) Corporate notes (due in one to 24,145 ( 79 ) — — 24,145 ( 79 ) $ 128,591 $ ( 170 ) $ 4,993 $ ( 7 ) $ 133,584 $ ( 177 ) The gross unrealized losses related to U.S. Treasury securities, municipal securities, government-sponsored enterprise securities, commercial paper and corporate notes as of September 30, 2022 and December 31, 2021 were due to changes in interest rates and not credit risk. We determined that the gross unrealized losses on our cash equivalents and marketable securities as of September 30, 2022 and December 31, 2021 were temporary in nature. Our exposure to unrealized losses may increase in the future due to the economic pressures or uncertainties associated with local or global economic recessions as a result of the ongoing COVID-19 pandemic and ongoing geopolitical events, such as the current military conflict between Ukraine and Russia. We review our investments quarterly to identify and evaluate whether any investments have indications of possible other-than-temporary impairment. Factors considered in determining whether a loss is temporary include the length of time and extent to which the fair value has been less than the amortized cost basis and whether we intend to sell the security or whether it is more likely than not that we would be required to sell the security before recovery of the amortized cost basis. We currently do not intend to sell these securities before recovery of their amortized cost bases. Fair Value on a Recurring Basis We categorize financial instruments recorded at fair value on our condensed consolidated balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows: Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 — Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Money market funds are categorized as Level 1 within the fair value hierarchy as their fair values are based on quoted prices available in active markets. U.S. Treasury securities, municipal securities, government-sponsored enterprise securities, commercial paper, and corporate notes are categorized as Level 2 within the fair value hierarchy as their fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 and indicates the fair value category assigned. Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs (In thousands) Level 1 Level 2 Level 3 Total As of September 30, 2022: Money market funds (1) $ 17,362 $ — $ — $ 17,362 U.S. Treasury securities (2) — 24,319 — 24,319 Municipal securities (2) — 2,950 — 2,950 Government-sponsored enterprise (2) — 13,299 — 13,299 Commercial paper (1)(2) — 101,369 — 101,369 Corporate notes (2) — 25,899 — 25,899 Total $ 17,362 $ 167,836 $ — $ 185,198 As of December 31, 2021: Money market funds (1) $ 24,207 $ — $ — $ 24,207 U.S. Treasury securities (2)(3) — 17,088 — 17,088 Municipal securities (3) — 2,985 — 2,985 Government-sponsored enterprise (2) — 12,493 — 12,493 Commercial paper (1)(2) — 91,861 — 91,861 Corporate notes (2)(3) — 60,574 — 60,574 Total $ 24,207 $ 185,001 $ — $ 209,208 (1) Included in cash and cash equivalents on our condensed consolidated balance sheets. (2) Included in current portion of marketable securities on our condensed consolidated balance sheets. (3) Included in noncurrent portion of marketable securities on our condensed consolidated balance sheets. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | 3. ACCRUED LIABILITIES Accrued liabilities consisted of the following as of September 30, 2022 and December 31, 2021: September 30, December 31, (In thousands) 2022 2021 CRO and clinical trial costs $ 22,235 $ 22,804 Securities class action settlement 24,000 — Manufacturing activities 2,325 4,123 Professional legal and accounting fees 3,408 2,030 Interest payable 479 336 Other 664 541 $ 53,111 $ 29,834 See Note 5 on Contingencies and Uncertainties - Purported Securities Lawsuits for further information on the securities class action settlement. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | 4. DEBT On September 30, 2020, we, Hercules Capital, Inc., or Hercules, and Silicon Valley Bank, or SVB, entered into a term loan facility, or the Original Loan Agreement, up to $ 75,000,000 , as amended in August 2021. On June 30, 2022, or the Effective Date, we entered into a second amendment to the Original Loan Agreement, or as amended, the Loan Agreement. Under the second amendment, the aggregate principal amount available to us increased from $ 75,000,000 to $ 125,000,000 , with such principal being available in a series of tranches, subject to certain terms and conditions. As of September 30, 2022 , a total of $ 50,000,000 had been drawn under the Loan Agreement. Under the second amendment, the $ 75,000,000 in remaining loan principal as of September 30, 2022 can be drawn as follows: (a) the first tranche of $ 20,000,000 is available within 30 days of the achievement of certain clinical and financial milestones until September 15, 2023 , subject to the achievement of such milestones; (b) the second tranche of $ 10,000,000 is available from January 1, 2023 until December 15, 2023 , subject to the achievement of certain clinical and regulatory milestones, and satisfaction of certain other requirements; (c) the third tranche of $ 20,000,000 is available from September 15, 2023 until September 15, 2024 , subject to the achievement of certain clinical and regulatory milestones, and satisfaction of certain capitalization requirements; and (d) the final tranche of $ 25,000,000 is available through December 31, 2024 , subject to approval by an investment committee comprised of Hercules and SVB. With the exception of the final tranche, and subject to achievement of the applicable milestones and other requirements with respect to each tranche, draw downs are at our election. On the Effective Date of the second amendment, we paid $ 100,000 as a facility charge that we recognized as a debt discount and are amortizing such cost to interest expense over the life of the loan using the effective interest rate method. Additional facility charges applied to future draw downs will be treated similarly. We incurred approximately $ 75,000 in legal fees in connection with the second amendment, which we recognized as debt issuance costs and are amortizing such cost to interest expense over the life of the loan using the effective interest rate method. Future debt issuance costs will be treated similarly. Under the second amendment, if we choose to prepay the principal with respect to any future draw down after the Effective Date, any such prepayment within the first 36 months after the Effective Date will be subject to a prepayment charge equal to 1.5 % of the principal amount prepaid. No prepayment charge will be assessed for any prepayment occurring more than 36 months after the Effective Date. Under the second amendment, the maturity date, interest only payment dates, end of term charges, collateral, events of default, representations, warranties and covenants remain consistent with the terms of the Original Loan Agreement, except as follows: • Beginning June 1, 2022 and prior to the regulatory approval for imetelstat, or the potential Regulatory Approval, if any, we are required to maintain a minimum cash balance in an amount equal to the greater of: 50 % of the outstanding principal amount under the Loan Agreement or $ 30,000,000 . • After the potential Regulatory Approval, if any, the minimum cash requirement may be satisfied through one of the following three options, as elected by us: (a) maintaining a cash balance in an amount not less than 40 % of the outstanding principal amount under the Loan Agreement; (b) maintaining a cash balance in an amount not less than 25 % of the outstanding principal amount under the Loan Agreement, if our market cap is or exceeds $ 750,000,000 ; or (c) maintaining six month net product revenues of at least 70 % of net product revenues forecasted by us, should any potential Regulatory Approval for imetelstat be obtained. We are in compliance with the covenants under the Loan Agreement as of September 30, 2022. As of September 30, 2022 , the net carrying value of the debt under the Loan Agreement was $ 50,758,000 , which includes the principal amount of $ 50,000,000 less net unamortized debt discounts and issuance costs of $ 747,000 plus accrued end of term charge of $ 1,505,000 . The carrying value of the debt approximates the fair value as of September 30, 2022. The debt discounts and debt issuance costs are being amortized to interest expense over the life of the outstanding loan amounts using the effective interest rate method. The following table presents future minimum payments, including interest and the end of term charge, under the Loan Agreement as of September 30, 2022 (in thousands): Remainder of 2022 $ 1,495 2023 26,409 2024 33,858 Total 61,762 Less: amount representing interest ( 8,487 ) Less: unamortized debt discounts and issuance costs ( 747 ) Less: unamortized end of term charge ( 1,770 ) Less: current portion of debt ( 12,959 ) Noncurrent portion of debt $ 37,799 |
CONTINGENCIES AND UNCERTAINTIES
CONTINGENCIES AND UNCERTAINTIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND UNCERTAINTIES | 5. CONTINGENCIES AND UNCERTAINTIES Purported Securities Lawsuits Between January 23, 2020 and March 5, 2020, three securities class action lawsuits were filed against us and certain of our officers. One of the lawsuits was voluntarily dismissed on March 19, 2020. The other two lawsuits, filed in the U.S. District Court, or the Court, for the Northern District of California, or the Northern District, were consolidated by the Court on May 14, 2020, and on August 20, 2020, the lead plaintiffs filed a consolidated class action complaint. The consolidated class action complaint alleges violations of the Securities Exchange Act of 1934, as amended, or the Exchange Act, in connection with allegedly false and misleading statements made by us related to IMbark during the period from March 19, 2018, to September 26, 2018. The consolidated class action complaint alleges, among other things, that we violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 by failing to disclose facts related to the alleged failure of IMbark to meet the two primary endpoints of the trial, spleen response rate and Total Symptom Score, and that our stock price dropped when such information was disclosed. The plaintiffs in the consolidated class action complaint seek damages and interest, and an award of reasonable costs, including attorneys’ fees. On October 22, 2020, lead plaintiffs filed an amended consolidated class action complaint. We filed a motion to dismiss the amended consolidated class action complaint on November 23, 2020. On April 12, 2021, the Court granted in part and denied in part our motion to dismiss. Our answer to the amended and consolidated class action complaint was filed on May 13, 2021. On September 30, 2021, lead plaintiffs filed their motion for class certification, and on April 2, 2022, the Court granted the lead plaintiffs’ motion for class certification. On September 2, 2022, the parties agreed to a settlement, which is subject to Court approval. On October 13, 2022, the Court preliminarily approved the parties’ settlement, permitted notice to be distributed to the class members, and scheduled a final approval hearing for March 30, 2023. In connection with the settlement, the parties entered into a Stipulation and Agreement of Settlement, or the Stipulation, on September 2, 2022 to resolve the consolidated class action complaint. Under the terms of the Stipulation, in exchange for the release and dismissal with prejudice of all claims against the defendants in the consolidated class action complaint, we agreed to pay and/or to cause our insurance carriers to pay a total of $ 24,000,000 , comprised of $ 17,000,000 in cash, which is expected to be paid under the available D&O insurance coverage and, at our election, $ 7,000,000 in either shares of Geron common stock and/or cash. The proposed settlement does not constitute an admission of fault or wrongdoing by Geron or our Chief Executive Officer. The proposed settlement remains subject to final approval by the Court and certain other conditions. As of September 30, 2022, on our condensed consolidated balance sheet, we have recorded the total settlement amount of $ 24,000,000 as accrued liabilities and $ 17,000,000 as interest and other receivables. For the three and nine months ended September 30, 2022, we have recognized $ 7,000,000 as general and administrative expense on our condensed consolidated statements of operations. Between April 23, 2020 and June 8, 2021, seven shareholder derivative actions were filed, naming as defendants certain of our current officers and certain current and former members of our board. Of these actions, or the Derivative Lawsuits, two were filed in the Northern District, two were filed in the Court of Chancery of the State of Delaware, two were filed in the U.S. District Court for the District of Delaware, and one was filed in the Superior Court of California for the County of San Mateo, respectively. The plaintiffs in the Derivative Lawsuits allege breach of fiduciary duty and/or violations of Section 14 of the Exchange Act, based on the same underlying facts as the consolidated class action lawsuit described above. The plaintiffs seek damages, corporate governance reforms, equitable relief, restitution, and an award of reasonable costs, including attorneys’ fees. The status of the seven Derivative Lawsuits is currently as follows: • On July 2, 2021, we filed a motion to dismiss the consolidated shareholder derivative actions filed in the Court of Chancery of the State of Delaware, or the Chancery Court Derivative Lawsuits. On September 1, 2021, the plaintiffs filed a consolidated amended complaint in the Chancery Court Derivative Lawsuits. On October 12, 2021, we filed our motion to dismiss the consolidated amended complaint. The Court of Chancery of the State of Delaware heard oral argument on the motion on February 15, 2022, and, on June 22, 2022, issued an order staying its decision on our motion to dismiss until after final resolution of the consolidated class action lawsuit described above; • The consolidated shareholder derivative actions filed in the U.S. District Court for the District of Delaware have been stayed pending the ruling on our motion to dismiss the Chancery Court Derivative Lawsuits; • The consolidated shareholder derivative actions filed in the Northern District were stayed through the ruling on our motion to dismiss the Chancery Court Derivative Lawsuits. Subsequent to the grant of class certification on April 2, 2022, in the consolidated class action lawsuit described above, on May 3, 2022, the Northern District entered an order providing plaintiffs until June 7, 2022, to file an amended complaint. On June 7, 2022, plaintiffs filed an amended shareholder derivative complaint. On July 6, 2022, the Northern District entered an order staying the consolidated shareholder derivative actions filed in the Northern District until the earlier of either a public announcement of a settlement in the consolidated class action lawsuit described above or a final, non-appealable judgment in the consolidated class action lawsuit described above. The stay was continued on September 16, 2022, for an additional 60 days; and • Our motion to dismiss the shareholder derivative action pursuant to the forum selection clause in our amended and restated bylaws was filed in the Superior Court of California for the County of San Mateo on August 5, 2021. At the hearing on the motion to dismiss on November 2, 2021, the court granted our motion to dismiss and stayed the case until April 19, 2022. At the case management conference on April 19, 2022, the court continued the stay until June 14, 2022. At the case management conference on June 14, 2022, the court continued the stay until December 13, 2022, when it will hold a further case management conference. The pending lawsuits and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuits and any other related lawsuits is necessarily uncertain. We could be forced to expend significant resources in the defense against the pending lawsuits and any other related lawsuits, and we may not prevail. In addition, we have and may continue incur substantial legal fees and costs in connection with such lawsuits. As discussed above, we have recorded the total settlement amount for the Stipulation on our condensed consolidated balance sheet as of September 30, 2022. We currently are not able to estimate the possible additional costs to us, if any, from these matters, and we cannot be certain how long it may take to resolve the pending lawsuits or the possible amount of any damages or legal costs that we may be required to pay. Such amounts could be material to our consolidated financial statements if we do not prevail in the defense against the pending lawsuits and any other related lawsuits, or even if we do prevail. We have not established any reserve for any potential liability relating to the pending lawsuits and any other related lawsuits, other than for the total settlement amount under the Stipulation. It is possible that we could, in the future, incur judgments or enter into settlements of claims for monetary damages. Risks Related to Global Economic Conditions, COVID-19 and the Military Conflict Between Ukraine and Russia As of the date of this filing, significant uncertainty exists concerning the ultimate duration and severity of the COVID-19 pandemic and the military conflict between Ukraine and Russia. Both of these events have caused widespread, rapidly-evolving and unpredictable impacts on global societies, economies, financial markets and business practices. With respect to the COVID-19 pandemic, we are closely monitoring the impact of the pandemic, the identification of new variants of the COVID-19 virus and related developments, and our focus remains on promoting employee health and safety while continuing to advance the development of imetelstat. For both our Phase 3 clinical trials, IMerge and IMpactMF, we have limited ongoing clinical trial activity in Ukraine and Russia, but we have experienced, and may continue to experience, delays and suspensions in clinical trial activities at clinical sites in Ukraine and Russia due to the current political and civil unrest conditions. With support from our CRO, we are monitoring the impact of the conflict on our clinical trial activities. Due to the dynamic and unpredictable effects of the COVID-19 pandemic, we have had and expect to continue to have disruptions and/or delays in our imetelstat development program, including with respect to our ability to initiate trial sites, enroll and assess patients, maintain patient enrollment, ensure patient clinical and lab collection visits, conduct monitoring visits, supply study drug, report trial results, and interact with regulators or other important agencies due to limitations in employee resources or otherwise. Restrictions on travel, availability of site personnel, and diversion of hospital staff and resources to COVID-19 patients, have disrupted our trial operations, as well as patient recruitment in many areas, resulting in a slowdown in patient enrollment and/or deviations from or disruptions in key clinical trial activities, such as clinical trial site initiation and monitoring. If the effects of the COVID-19 pandemic continue and/or become more severe, we could experience significant disruptions to our clinical development timelines, delays in clinical site initiation and patient enrollment in IMpactMF, IMproveMF and the planned investigator-led clinical trials in acute myeloid leukemia, or AML, and Intermediate-2 or High-risk myelodysplastic syndromes, or higher risk MDS, and other disruptions that could severely impact our business and the imetelstat development program. We have taken and intend to take those actions with regard to COVID-19 that may be required by federal, state or local authorities or that we determine are in the best interests of our patients, investigators, employees and stockholders. In response to the COVID-19 pandemic and previous “shelter in place” and similar orders issued by state and local governments, we have allowed voluntary access to our offices in California and New Jersey to employees who have been vaccinated, and almost all of our employees continue to work remotely without any significant disruption to our business. Our increased reliance on personnel working remotely could increase our cybersecurity risk, create data accessibility concerns and make us more susceptible to communication disruptions, any of which could adversely impact our business operations. These and similar, and perhaps more severe, disruptions in our operations could occur which would negatively impact our business and business prospects, our financial condition and the future of imetelstat. The effects of the COVID-19 pandemic and the military conflict between Ukraine and Russia, including the significant sanctions imposed against Russia, as well as broader economic conditions, including inflation, rising interest rates and the prospects for recession, have increased market volatility and could result in a significant long-term disruption of global financial markets, reducing or eliminating our ability to raise additional capital, which could negatively affect our liquidity, our ability to complete IMerge Phase 3 and IMpactMF and to commence, conduct and complete any other potential future clinical trials of imetelstat. In addition, the global economic slowdown caused by, among other things, the COVID-19 pandemic and the military conflict between Ukraine and Russia, as well as inflation, rising interest rates and the prospects for recession, could materially and adversely affect our business and the value of our common stock. The extent to which the COVID-19 pandemic and the military conflict between Ukraine and Russia ultimately impact our business, our regulatory and clinical development activities, clinical supply chain and other business operations, as well as the value of and market for our common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration and severity of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, or U.S., and in other countries, the effectiveness of actions taken globally to contain and treat COVID-19 and whether the military conflict between Ukraine and Russia resolves in a timely manner, or at all. Accordingly, we do not yet know the full extent of potential delays or impacts on our business, our regulatory and clinical development activities, clinical supply chain and other business operations or the global economy as a whole. However, these effects could materially and adversely affect our business and business prospects, our financial condition and the future of imetelstat. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | 6. STOCKHOLDERS’ EQUITY Public Offering On April 1, 2022, we completed an underwritten public offering of 53,333,334 shares of our common stock and a pre-funded warrant to purchase 18,095,238 shares of our common stock, also known as the 2022 pre-funded warrant, together with accompanying warrants to purchase 35,714,286 shares of our common stock, also known as the 2022 stock purchase warrants. The shares of common stock and the 2022 pre-funded warrant were immediately separable from the 2022 stock purchase warrants. All of the securities were issued separately. The combined public offering price of the common stock and accompanying 2022 stock purchase warrants was $ 1.05 per share. The 2022 stock purchase warrants have an exercise price of $ 1.45 per share and are exercisable immediately. The term of the 2022 stock purchase warrants expires on the earlier to occur of (a) the date that is 30 business days following the date on which we first issue a press release disclosing, if applicable, that the United States Food and Drug Administration, or FDA, has accepted for filing a New Drug Application submitted to the FDA for imetelstat in Low or Intermediate-1 risk myelodysplastic syndromes and (b) April 1, 2027. The combined public offering price of the 2022 pre-funded warrant and accompanying 2022 stock purchase warrant was $ 1.049 per share. The 2022 pre-funded warrant has an exercise price of $ 0.001 per share and may be exercised at any time until the 2022 pre-funded warrant is exercised in full. As of September 30, 2022 , none of the 2022 pre-funded warrant and 2022 stock purchase warrants have been exercised. The net cash proceeds from this offering were $ 69,916,000 , after deducting the underwriting discount and other offering expenses paid by us, and exclude any future proceeds from the exercise of the 2022 pre-funded warrant and 2022 stock purchase warrants. Upon the issuance of the 2022 pre-funded warrant and 2022 stock purchase warrants, we evaluated the terms of each warrant to determine the appropriate accounting and classification pursuant to FASB Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity , and FASB Accounting Standards Codification Topic 815, Derivatives and Hedging . Warrants are classified as liabilities when the warrant terms allow settlement of the warrant exercise in cash and classified as equity when the warrant terms only allow settlement in shares of common stock. The terms of the 2022 pre-funded warrant and the 2022 stock purchase warrants include certain provisions related to fundamental transactions and a cashless exercise provision in the event registered shares are not available, and do not include any mandatory redemption provisions. Based on our evaluation, we concluded the 2022 pre-funded warrant and the 2022 stock purchase warrants should be classified as equity with no subsequent remeasurement as long as such warrants continue to be classified as equity. Warrant Exercises In the third quarter of 2022, warrants to purchase 2,798,003 shares of Geron common stock were exercised for net cash proceeds of approximately $ 3,638,000 . The warrants were issued in connection with an underwritten public offering of common stock and a pre-funded warrant, together with accompanying stock purchase warrants in May 2020. As of September 30, 2022, the pre-funded warrant to purchase 8,335,239 shares of our common stock was outstanding and stock purchase warrants to purchase 52,975,463 shares of our common stock associated with the May 2020 public offering remained outstanding. 2018 Inducement Award Plan In December 2018, our board of directors approved the adoption of the 2018 Inducement Award Plan, or the Inducement Plan, to be used exclusively for grants of inducement awards to individuals who were not previously our employees or non-employee directors, other than following a bona fide period of non-employment. In July 2022, our Compensation Committee approved an amendment to increase the reserve under the Inducement Plan by 5,000,000 shares. As of September 30, 2022, a total of 21,100,000 shares of our common stock had been reserved (subject to customary adjustments in the event of a change in capital structure) under the Inducement Plan. The Inducement Plan provides for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock awards, and all awards under the Inducement Plan are intended to meet the standards under Rule 5635(c)(4) of the Nasdaq Listing Rules. The terms and conditions of the Inducement Plan and the inducement awards to be granted thereunder are substantially similar to our stockholder-approved 2018 Equity Incentive Plan. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The terms “Geron”, the “Company”, “we” and “us” as used in this report refer to Geron Corporation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States, or U.S., generally accepted accounting principles, or GAAP, for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any other period. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements for each of the three years ended December 31, 2021, included in our Annual Report on Form 10-K for the year ended December 31, 2021, or the Form 10-K. The accompanying condensed balance sheet as of December 31, 2021 has been derived from audited financial statements at that date. Since inception, we have incurred net losses and generated negative cash flows from operations. During the three and nine months ended September 30, 2022, we incurred net losses of $ 41,051,000 and $ 99,266 000 , respectively, and in the nine months ended September 30, 2022, we generated negative cash flows from operations of $ 92,198,000 . As of September 30, 2022, we had an accumulated deficit of $ 1,371,007,000 . We expect our accumulated deficit will increase significantly over time and do not expect to experience positive cash flows from operations in the near future. As of September 30, 2022, we had $ 195,151,000 of cash, restricted cash, cash equivalents, and marketable securities. 53,333,334 shares of our common stock and a pre-funded warrant to purchase 18,095,238 shares of our common stock, also known as the 2022 pre-funded warrant, together with accompanying warrants to purchase 35,714,286 shares of our common stock, also known as the 2022 stock purchase warrants. The net cash proceeds from this offering were $ 69,916,000 , after deducting the underwriting discount and other offering expenses paid by us and exclude any future proceeds from the exercise of the 2022 pre-funded warrant and 2022 stock purchase warrants. See Note 6 on Stockholders' Equity for further discussion of the April 2022 public offering. We believe our existing cash, cash equivalents and short-term marketable securities will be sufficient to fund our operations for a period of at least one year from the date of filing of this Quarterly Report on Form 10-Q. In any event, we will require substantial additional funding to further advance the imetelstat program, including through the completion of IMpactMF and IMproveMF and the planned investigator-led trials in AML and higher risk MDS, as well as conducting the clinical, regulatory and potential commercialization activities necessary to potentially bring imetelstat to market in lower risk MDS and refractory MF, and our need for additional funds may arise sooner than planned. If adequate funds are not available on a timely basis, if at all, we may be unable to pursue further development, including completing IMpactMF and IMproveMF, or commencing, conducting or completing potential future clinical trials of imetelstat, such as the planned investigator-led clinical trials in AML and higher risk MDS, or pursuing potential commercialization of imetelstat, which would severely harm our business and we might cease operations. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Geron and our wholly-owned subsidiary, Geron UK Limited, or Geron UK, a United Kingdom company. Geron UK was incorporated in September 2021, and its operations commenced in January 2022. We have eliminated intercompany accounts and transactions. We prepare the financial statements of Geron UK using the local currency as the functional currency. We translate the assets and liabilities of Geron UK at rates of exchange at the balance sheet date and translate income and expense items at average monthly rates of exchange. The resultant translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, on our condensed consolidated balance sheets. |
Net Loss Per Share | Net Loss Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding for the periods presented without consideration of potential common shares. In April 2022, we entered into an underwriting agreement in connection with a public offering of our common stock, pursuant to which we issued a pre-funded warrant to purchase 18,095,238 shares of our common stock, also known as the 2022 pre-funded warrant, together with accompanying warrants to purchase shares of our common stock. In May 2020, we entered into an underwriting agreement in connection with a public offering of our common stock, pursuant to which we issued a pre-funded warrant to purchase 8,335,239 shares of our common stock, also known as the 2020 pre-funded warrant, together with accompanying warrants to purchase shares of our common stock. The 2022 pre-funded warrant and 2020 pre-funded warrant are exercisable immediately at an exercise price of $ 0.001 per share. We included the 2022 pre-funded warrant and 2020 pre-funded warrant in the computation of basic net loss per share, as applicable, since their exercise price is negligible, and they may be exercised at any time. See Note 6 on Stockholders' Equity for further discussion of the April 2022 public offering. Diluted net income per share would be calculated by adjusting the weighted-average number of shares of common stock outstanding for the dilutive effect of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued, as determined using the treasury-stock method. Potential dilutive securities consist of outstanding stock options and warrants to purchase our common stock. Diluted net loss per share excludes potential dilutive securities for all periods presented as their effect would be anti-dilutive. Accordingly, basic and diluted net loss per share is the same for all periods presented in the accompanying condensed consolidated statements of operations. Since we incurred a net loss for the three and nine months ended September 30, 2022 and 2021 , the diluted net loss per share calculation excludes potential dilutive securities of 174,347,456 and 105,466,722 , respectively, related to outstanding stock options and warrants as their effect would have been anti-dilutive. |
Use of Estimates | Use of Estimates The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to accrued liabilities, revenue recognition, fair value of marketable securities and equity investments, operating leases, right-of-use assets, lease liabilities, income taxes, and stock-based compensation. We base our estimates on historical experience and on various other market specific and relevant assumptions that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Cash Equivalents and Marketable Securities We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We are subject to credit risk related to our cash equivalents and marketable securities. Our marketable debt securities include U.S. Treasury securities, municipal securities, government-sponsored enterprise securities, commercial paper and corporate notes. We classify our marketable debt securities as available for sale. We record available for sale debt securities at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses are included in interest income and are derived using the specific identification method for determining the cost of securities sold and have been insignificant to date. Dividend and interest income are recognized when earned and included in interest income on our condensed consolidated statements of operations. We recognize a charge when the declines in the fair values below the amortized cost bases of our available for sale securities are judged to be other than temporary. We consider various factors in determining whether to recognize an other than temporary charge, including whether we intend to sell the security or whether it is more likely than not that we would be required to sell the security before recovery of the amortized cost basis. Declines in market value judged as other than temporary result in a charge to interest income. We have not recorded any other-than-temporary impairment charges on our available-for-sale securities for the three and nine months ended September 30, 2022 and 2021 . See Note 2 on Fair Value Measurements. |
Leases | Leases At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating leases are included in operating leases, right-of-use assets and lease liabilities on our condensed consolidated balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of remaining lease payments over the expected lease term. The present value of remaining lease payments within the 12 months following the balance sheet date are classified as current lease liabilities. The present value of lease payments not within the 12 months following the balance sheet date are classified as noncurrent lease liabilities. The interest rate implicit in lease contracts is typically not readily determinable. As such, to calculate the net present value of lease payments, we apply our incremental borrowing rate, which is the estimated rate to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment as of the lease commencement date. We may adjust the right-of-use assets for certain adjustments, such as initial direct costs paid or incentives received. In addition, we include any options to extend or terminate the lease in the expected lease term when it is reasonably certain that we will exercise any such option. Lease expense is recognized on a straight-line basis over the expected lease term. For lease agreements entered into after January 1, 2019 that include lease and non-lease components, such components are generally accounted for separately. We have also elected not to recognize on our condensed consolidated balance sheets leases with terms of one year or less. |
Debt Issuance Costs and Debt Discounts | Debt Issuance Costs and Debt Discounts Debt issuance costs include legal fees, accounting fees, and other direct costs incurred in connection with the execution of our debt financing. Debt discounts represent costs paid to the lenders. Debt issuance costs and debt discounts are deducted from the carrying amount of the debt liability and are amortized to interest expense over the term of the related debt using the effective interest method. |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with the provisions of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , or Topic 606. In determining the appropriate amount and timing of revenue to be recognized under this guidance, we perform the following five steps: (i) identify the contract(s) with our customer; (ii) identify the promised goods or services in the agreement and determine whether they are performance obligations, including whether they are distinct in the context of the agreement; (iii) measure the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations based on stand-alone selling prices; and (v) recognize revenue when (or as) we satisfy each performance obligation. A performance obligation is a promise in an agreement to transfer a distinct good or service to the customer and is the unit of account in Topic 606. Significant management judgment is required to determine the level of effort required and the period over which completion of the performance obligations is expected under an agreement. If reasonable estimates regarding when performance obligations are either complete or substantially complete cannot be made, then revenue recognition is deferred until a reasonable estimate can be made. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. We allocate the total transaction price to each performance obligation based on the estimated relative stand-alone selling prices of the promised goods or services underlying each performance obligation. Estimated selling prices for license rights are calculated using an income approach model and include the following key assumptions, judgments and estimates: the development timeline, revenue forecast, commercialization expenses, discount rate and probabilities of technical and regulatory success. Following is a description of the principal activities from which we generate revenue. License fees and royalty revenue primarily represent amounts earned under agreements that out-license our technology to various companies. License Agreements We previously entered into several license agreements with various oncology, diagnostics, research tools and biologics production companies, whereby we granted certain rights to our non-imetelstat related technologies. Under these agreements, non-refundable upfront fees and annual license maintenance fees were considered fixed consideration, while milestone payments and royalties were identified as variable consideration. Since June 30, 2021, no active license agreements remain. In connection with the divestiture of Geron’s human embryonic stem cell assets, including intellectual property and proprietary technology, to Lineage Cell Therapeutics, Inc. (formerly BioTime, Inc. which acquired Asterias Biotherapeutics, Inc.) in 2013, we are entitled to receive royalties on sales of certain research or commercial products utilizing Geron’s divested intellectual property. Licenses of Intellectual Property. If we determine the license to intellectual property is distinct from the other performance obligations identified in the agreement and the licensee can use and benefit from the license, we recognize revenue from non-refundable upfront fees allocated to the license upon the completion of the transfer of the license to the licensee. For such licenses, we recognize revenue from annual license maintenance fees upon the start of the new license period. For licenses that are bundled with other performance obligations, we assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable upfront fees or annual license maintenance fees. At each reporting date, we reassess the progress and, if necessary, adjust the measure of performance and related revenue recognition. Milestone Payments . At the inception of each agreement that includes milestone payments, we evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price. For milestones that we do not deem to be probable of being achieved, the associated milestone payments are fully constrained and the value of the milestone is excluded from the transaction price with no revenue being recognized. For example, milestone payments that are not within our control, such as regulatory-related accomplishments, are not considered probable of being achieved until those accomplishments have been communicated by the relevant regulatory authority. Once the assessment of probability of achievement becomes probable, we recognize revenue for the milestone payment. At each reporting date, we assess the probability of achievement of each milestone under any current agreements. Royalties . For agreements with sales-based royalties, including milestone payments based on the level of sales, where the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (a) when the related sales occur, or (b) when the performance obligation, to which some or all of the royalty has been allocated, has been satisfied (or partially satisfied). At each reporting date, we estimate the sales incurred by each licensee during the reporting period based on historical experience and accrue the associated royalty amount. |
Restricted Cash | Restricted Cash Restricted cash consists of funds maintained in separate money market or certificate of deposit accounts for credit card purchases. |
Research and Development Expenses | Research and Development Expenses Research and development expenses currently consist of expenses incurred in developing and testing imetelstat and research related to potential next generation telomerase inhibitors. These expenses include, but are not limited to, payroll and personnel expense, lab supplies, non-clinical studies, clinical trials, including support for investigator-led clinical trials, raw materials to manufacture clinical trial drugs, manufacturing costs for research and clinical trial materials, sponsored research at other labs, consulting, costs to maintain technology licenses and research-related overhead. Our current imetelstat clinical trials are being supported by contract research organizations, or CROs, and other vendors. We accrue expenses for clinical trial activities performed by CROs based upon the estimated amount of work completed on each trial. For clinical trial expenses and related expenses associated with the conduct of clinical trials, the significant factors used in estimating accruals include the number of patients enrolled, the number of active clinical sites, and the duration for which the patients have been enrolled in the trial. We monitor patient enrollment levels and related activities to the extent possible through internal reviews, review of contractual terms and correspondence with CROs. We base our estimates on the best information available at the time. However, additional information may become available to us which will allow us to make a more accurate estimate in future periods. In that event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. |
Depreciation and Amortization | Depreciation and Amortization We record property and equipment at cost and calculate depreciation using the straight-line method over the estimated useful lives of the assets, generally four years . Leasehold improvements are amortized over the shorter of the estimated useful life or remaining term of the lease. |
Stock-Based Compensation | Stock-Based Compensation We maintain various stock incentive plans under which stock options and restricted stock awards can be granted to employees, non-employee directors and consultants. We also have an employee stock purchase plan for all eligible employees. We recognize stock-based compensation expense based on grant-date fair values of service-based stock options on a straight-line basis over the requisite service period, which is generally the vesting period. For performance-based stock options with vesting based on the achievement of certain strategic milestones, stock-based compensation expense is recognized over the period from the date the performance condition is determined to be probable of occurring through the date the applicable condition is expected to be met and is reduced for estimated forfeitures, as applicable. If the performance condition is not considered probable of being achieved, no stock-based compensation expense is recognized until such time as the performance condition is considered probable of being met, if at all. If the assessment of probability of the performance condition changes, the impact of the change in estimate would be recognized in the period of the change. The determination of grant-date fair values for our service-based and performance-based stock options and employee stock purchases using the Black Scholes option‑pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. The grant-date fair value for service-based restricted stock awards is determined using the fair value of our common stock on the date of grant. We evaluate whether an adjustment to the assumptions of fair value of our common stock and historical volatility are required if observed prices of our common stock materially differ from historical information. The following table summarizes the stock-based compensation expense included in operating expenses on our condensed consolidated statements of operations related to stock options and employee stock purchases for the three and nine months ended September 30, 2022 and 2021, which was allocated as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Research and development $ 932 $ 924 $ 2,799 $ 2,655 General and administrative 1,131 1,084 3,014 3,120 Stock-based compensation expense included in operating expenses $ 2,063 $ 2,008 $ 5,813 $ 5,775 As stock-based compensation expense recognized in our condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, but at a minimum, reflects the grant-date fair value of those awards that actually vested in the period. Forfeitures have been estimated at the time of grant based on historical data and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We have not recognized any stock-based compensation expense for performance-based stock options on our condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021, as achievement of the specified strategic milestones was not considered probable at that time. Stock Options We grant service-based and performance-based stock options under our equity plans to employees, non-employee directors and consultants. The service-based vesting period for employee stock options is generally four years from the date of the stock option grant. Performance-based stock options vest upon the achievement of specified strategic milestones. The fair value of service-based stock options granted during the nine months ended September 30, 2022 and 2021 has been estimated at the date of grant using the Black Scholes option-pricing model with the following assumptions: Nine Months Ended September 30, 2022 2021 Dividend yield 0 % 0 % Expected volatility range 77.7 % to 81.6 % 77.7 % to 78.3 % Risk-free interest rate range 1.69 % to 3.77 % 0.51 % to 0.94 % Expected term 5.5 years 5.5 years Employee Stock Purchase Plan The fair value of employees’ stock purchase rights during the nine months ended September 30, 2022 and 2021 has been estimated using the Black Scholes option-pricing model with the following assumptions: Nine Months Ended September 30, 2022 2021 Dividend yield 0 % 0 % Expected volatility range 61.37 % to 86.48 % 50.7 % to 70.7 % Risk-free interest rate range 0.40 % to 2.79 % 0.09 % to 0.16 % Expected term range 6 months to 12 months 6 months to 12 months Dividend yield is based on historical cash dividend payments and Geron has paid no cash dividends to date. The expected volatility range is based on historical volatilities of our stock, since traded options on Geron common stock do not correspond to option terms and the trading volume of options is limited. The risk-free interest rate range is based on the U.S. Zero Coupon Treasury Strip Yields for the expected term in effect on the date of grant for an award. The expected term of stock options is derived from actual historical exercise and post-vesting cancellation data and represents the period of time that stock options granted are expected to be outstanding. The expected term of employees’ stock purchase rights is equal to the purchase period. Non-Employee Stock-Based Awards We measure share-based payments to non-employees based on the grant-date fair value of the equity awards. We recognize stock-based compensation expense for the fair value of the vested portion of non-employee stock-based awards on our condensed consolidated statements of operations. |
Segment Information | Segment Information Our executive management team represents our chief decision maker. We view our operations as a single segment, the development of therapeutic products for oncology. As a result, the financial information disclosed herein materially represents all of the financial information related to our principal operating segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New Accounting Pronouncements – Issued But Not Yet Adopted In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-13, Measurement of Credit Losses on Financial Instruments , or ASU 2016-13. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about an entity's expected credit losses on financial instruments and other commitments to extend credit at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology currently used today with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to develop credit loss estimates. Subsequent to issuing ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , or ASU 2018-19, for the purpose of clarifying certain aspects of ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief , or ASU 2019-05, to provide entities with more flexibility in applying the fair value option on adoption of the credit impairment standard. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , or ASU 2019-11, which expands the scope of the practical expedient that allows entities to exclude the accrued interest component of amortized cost from various disclosure. Entities that elect to apply the practical expedient must disclose the total amount of accrued interest that they exclude from their disclosures of amortized cost. ASU 2018-19, ASU 2019-05 and ASU 2019-11 have the same effective date and transition requirements as ASU 2016-13. ASU 2016-13 will be effective for fiscal years beginning after December 15, 2022, using a modified retrospective approach, for smaller reporting companies. Early adoption is permitted. We plan to adopt ASU 2016-13 and related updates as of January 1, 2023. We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , or ASU 2020-06. The key elements of ASU 2020-06 aim to reduce unnecessary complexity in GAAP for certain financial instruments with characteristics of liabilities and equity. In addressing the complexity, the FASB focused on amending the guidance on convertible instruments and the guidance on the derivatives scope exception for contracts in an entity’s own equity. For convertible instruments, the FASB decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock. For contracts in an entity’s own equity, the FASB observed that the application of the derivatives scope exception guidance results in accounting for some contracts as derivatives while accounting for economically similar contracts as equity. The FASB also decided to improve and amend the related earnings per share guidance. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years for public business entities that are not smaller reporting companies. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. We plan to adopt ASU 2020-06 as of January 1, 2024. We do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements. Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on our condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of allocation of stock-based compensation expense included in operating expenses on condensed consolidated statements of operations related to share-based payment awards | The following table summarizes the stock-based compensation expense included in operating expenses on our condensed consolidated statements of operations related to stock options and employee stock purchases for the three and nine months ended September 30, 2022 and 2021, which was allocated as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Research and development $ 932 $ 924 $ 2,799 $ 2,655 General and administrative 1,131 1,084 3,014 3,120 Stock-based compensation expense included in operating expenses $ 2,063 $ 2,008 $ 5,813 $ 5,775 |
Schedule of assumptions used to estimate the fair value of service-based stock options granted | The fair value of service-based stock options granted during the nine months ended September 30, 2022 and 2021 has been estimated at the date of grant using the Black Scholes option-pricing model with the following assumptions: Nine Months Ended September 30, 2022 2021 Dividend yield 0 % 0 % Expected volatility range 77.7 % to 81.6 % 77.7 % to 78.3 % Risk-free interest rate range 1.69 % to 3.77 % 0.51 % to 0.94 % Expected term 5.5 years 5.5 years |
Schedule of assumptions used to estimate the fair value of employee stock purchases under the purchase plan | The fair value of employees’ stock purchase rights during the nine months ended September 30, 2022 and 2021 has been estimated using the Black Scholes option-pricing model with the following assumptions: Nine Months Ended September 30, 2022 2021 Dividend yield 0 % 0 % Expected volatility range 61.37 % to 86.48 % 50.7 % to 70.7 % Risk-free interest rate range 0.40 % to 2.79 % 0.09 % to 0.16 % Expected term range 6 months to 12 months 6 months to 12 months |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of cash equivalents, restricted cash and marketable securities by security type | Cash equivalents, restricted cash and marketable securities by security type at September 30, 2022 were as follows: Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Included in cash and cash equivalents: Money market funds $ 17,362 $ — $ — $ 17,362 Commercial paper 34,159 — ( 7 ) 34,152 $ 51,521 $ — $ ( 7 ) $ 51,514 Restricted cash: Money market fund $ 93 $ — $ — $ 93 Certificate of deposit 271 — — 271 $ 364 $ — $ — $ 364 Marketable securities: U.S. Treasury securities (due in less $ 24,493 $ — $ ( 174 ) $ 24,319 Municipal securities (due in less than 3,000 — ( 50 ) 2,950 Government-sponsored enterprise 13,325 3 ( 29 ) 13,299 Commercial paper (due in less than 67,432 — ( 215 ) 67,217 Corporate notes (due in less than 26,068 — ( 169 ) 25,899 $ 134,318 $ 3 $ ( 637 ) $ 133,684 Cash equivalents, restricted cash and marketable securities by security type at December 31, 2021 were as follows: Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Included in cash and cash equivalents: Money market funds $ 24,207 $ — $ — $ 24,207 Commercial paper 7,499 — — 7,499 $ 31,706 $ — $ — $ 31,706 Restricted cash: Money market fund $ 93 $ — $ — $ 93 Certificate of deposit 271 — — 271 $ 364 $ — $ — $ 364 Marketable securities: U.S. Treasury securities (due in less than $ 15,585 $ — $ ( 18 ) $ 15,567 U.S. Treasury securities (due in one to 1,524 — ( 3 ) 1,521 Municipal securities (due in one to 3,000 — ( 15 ) 2,985 Government-sponsored enterprise 12,500 — ( 7 ) 12,493 Commercial paper (due in less than 84,398 2 ( 38 ) 84,362 Corporate notes (due in less than one year) 36,444 2 ( 17 ) 36,429 Corporate notes (due in one to two years) 24,224 — ( 79 ) 24,145 $ 177,675 $ 4 $ ( 177 ) $ 177,502 |
Schedule of cash equivalents and marketable securities with unrealized losses | Cash equivalents and marketable securities with unrealized losses that have been in a continuous unrealized loss position for less than 12 months and 12 months or longer at September 30, 2022 and December 31, 2021 were as follows: Less Than 12 Months 12 Months or Longer Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses As of September 30, 2022: U.S. Treasury securities (due in $ 17,333 $ ( 147 ) $ 6,986 $ ( 27 ) $ 24,319 $ ( 174 ) Municipal securities (due in less 2,950 ( 50 ) — — 2,950 ( 50 ) Government-sponsored enterprise 2,956 — 4,971 ( 29 ) 7,927 ( 29 ) Commercial paper (due in less 99,936 ( 222 ) — — 99,936 ( 222 ) Corporate notes (due in less than 5,991 ( 15 ) 19,908 ( 154 ) 25,899 ( 169 ) $ 129,166 $ ( 434 ) $ 31,865 $ ( 210 ) $ 161,031 $ ( 644 ) As of December 31, 2021: U.S. Treasury securities (due in $ 15,567 $ ( 18 ) $ — $ — $ 15,567 $ ( 18 ) U.S. Treasury securities (due in 1,521 ( 3 ) — — 1,521 ( 3 ) Municipal securities (due in one 2,985 ( 15 ) — — 2,985 ( 15 ) Government-sponsored enterprise 1,500 — 4,993 ( 7 ) 6,493 ( 7 ) Commercial paper (due in less 66,872 ( 38 ) — — 66,872 ( 38 ) Corporate notes (due in less than 16,001 ( 17 ) — — 16,001 ( 17 ) Corporate notes (due in one to 24,145 ( 79 ) — — 24,145 ( 79 ) $ 128,591 $ ( 170 ) $ 4,993 $ ( 7 ) $ 133,584 $ ( 177 ) |
Schedule of financial instruments measured at fair value on recurring basis | The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 and indicates the fair value category assigned. Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs (In thousands) Level 1 Level 2 Level 3 Total As of September 30, 2022: Money market funds (1) $ 17,362 $ — $ — $ 17,362 U.S. Treasury securities (2) — 24,319 — 24,319 Municipal securities (2) — 2,950 — 2,950 Government-sponsored enterprise (2) — 13,299 — 13,299 Commercial paper (1)(2) — 101,369 — 101,369 Corporate notes (2) — 25,899 — 25,899 Total $ 17,362 $ 167,836 $ — $ 185,198 As of December 31, 2021: Money market funds (1) $ 24,207 $ — $ — $ 24,207 U.S. Treasury securities (2)(3) — 17,088 — 17,088 Municipal securities (3) — 2,985 — 2,985 Government-sponsored enterprise (2) — 12,493 — 12,493 Commercial paper (1)(2) — 91,861 — 91,861 Corporate notes (2)(3) — 60,574 — 60,574 Total $ 24,207 $ 185,001 $ — $ 209,208 (1) Included in cash and cash equivalents on our condensed consolidated balance sheets. (2) Included in current portion of marketable securities on our condensed consolidated balance sheets. (3) Included in noncurrent portion of marketable securities on our condensed consolidated balance sheets. |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following as of September 30, 2022 and December 31, 2021: September 30, December 31, (In thousands) 2022 2021 CRO and clinical trial costs $ 22,235 $ 22,804 Securities class action settlement 24,000 — Manufacturing activities 2,325 4,123 Professional legal and accounting fees 3,408 2,030 Interest payable 479 336 Other 664 541 $ 53,111 $ 29,834 See Note 5 on Contingencies and Uncertainties - Purported Securities Lawsuits for further information on the securities class action settlement. |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Future minimum payments under Loan Agreement | The following table presents future minimum payments, including interest and the end of term charge, under the Loan Agreement as of September 30, 2022 (in thousands): Remainder of 2022 $ 1,495 2023 26,409 2024 33,858 Total 61,762 Less: amount representing interest ( 8,487 ) Less: unamortized debt discounts and issuance costs ( 747 ) Less: unamortized end of term charge ( 1,770 ) Less: current portion of debt ( 12,959 ) Noncurrent portion of debt $ 37,799 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - BASIS OF PRESENTATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Apr. 01, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Net loss | $ (41,051,000) | $ (28,117,000) | $ (30,098,000) | $ (26,697,000) | $ (29,574,000) | $ (27,824,000) | $ (99,266,000) | $ (84,095,000) | ||
Cash flows from operations | (92,198,000) | $ (73,388,000) | ||||||||
Accumulated deficit | (1,371,007,000) | (1,371,007,000) | $ (1,271,741,000) | |||||||
Cash, restricted cash, cash equivalents, and marketable securities. | $ 195,151,000 | $ 195,151,000 | ||||||||
2022 Underwritten Public Offering | ||||||||||
Issuance of common stock in connection with public offering (in shares) | 53,333,334 | |||||||||
Net cash proceeds from public offering after deducting underwriting discount and other offering expenses | $ 69,916,000 | |||||||||
2022 Underwritten Public Offering | 2022 Pre-Funded Warrant | ||||||||||
Warrant to purchase common stock, shares | 18,095,238 | |||||||||
2022 Underwritten Public Offering | 2022 Stock Purchase Warrants | ||||||||||
Warrant to purchase common stock, shares | 35,714,286 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NET LOSS PER SHARE (Details) - $ / shares | Sep. 30, 2022 | Apr. 01, 2022 | May 27, 2020 |
2020 Public Offering of Common Stock and Warrants | |||
Warrant to purchase common stock, shares | 52,975,463 | ||
2020 Pre-Funded Warrant | 2020 Public Offering of Common Stock and Warrants | |||
Warrant to purchase common stock, shares | 8,335,239 | 8,335,239 | |
Warrant exercise price | $ 0.001 | ||
2022 Pre-Funded Warrant | 2022 Public Offering of Common Stock and Warrants | |||
Warrant to purchase common stock, shares | 18,095,238 | ||
Warrant exercise price | $ 0.001 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ANTI-DILUTIVE SHARES (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock options and warrants excluded from diluted net loss per share calculation due to net loss position | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Potential dilutive securities excluded from diluted earnings (loss) per share calculation (in shares) | 174,347,456 | 105,466,722 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - USEFUL LIVES OF ASSETS (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Depreciation [Abstract] | |
Estimated useful lives of assets | 4 years |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - STOCK BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-Based Compensation Expense | ||||
Stock-based compensation expense included in operating expenses | $ 2,063 | $ 2,008 | $ 5,813 | $ 5,775 |
Research and development | ||||
Stock-Based Compensation Expense | ||||
Stock-based compensation expense included in operating expenses | 932 | 924 | 2,799 | 2,655 |
General and administrative | ||||
Stock-Based Compensation Expense | ||||
Stock-based compensation expense included in operating expenses | $ 1,131 | $ 1,084 | $ 3,014 | $ 3,120 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - STOCK OPTIONS AND EMPLOYEE STOCK PURCHASE PLAN (Details) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock Options | ||
Stock-Based Compensation | ||
Vesting period of awards | 4 years | |
Assumptions used to estimate fair value of awards | ||
Dividend yield (as a percent) | 0% | 0% |
Expected volatility range, minimum (as a percent) | 77.70% | 77.70% |
Expected volatility range, maximum (as a percent) | 81.60% | 78.30% |
Risk-free interest rate range, minimum (as a percent) | 1.69% | 0.51% |
Risk-free interest rate range, maximum (as a percent) | 3.77% | 0.94% |
Expected term | 5 years 6 months | 5 years 6 months |
Employee Stock Purchase Plan | ||
Assumptions used to estimate fair value of awards | ||
Dividend yield (as a percent) | 0% | 0% |
Expected volatility range, minimum (as a percent) | 61.37% | 50.70% |
Expected volatility range, maximum (as a percent) | 86.48% | 70.70% |
Risk-free interest rate range, minimum (as a percent) | 0.40% | 0.09% |
Risk-free interest rate range, maximum (as a percent) | 2.79% | 0.16% |
Employee Stock Purchase Plan | Minimum | ||
Assumptions used to estimate fair value of awards | ||
Expected term | 6 months | 6 months |
Employee Stock Purchase Plan | Maximum | ||
Assumptions used to estimate fair value of awards | ||
Expected term | 12 months | 12 months |
FAIR VALUE MEASUREMENTS - SECUR
FAIR VALUE MEASUREMENTS - SECURITY TYPE (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Included in cash and cash equivalents: | ||
Amortized Cost | $ 51,521 | $ 31,706 |
Gross Unrealized Losses | (7) | |
Estimated Fair Value | 51,514 | 31,706 |
Restricted cash: | ||
Amortized Cost | 364 | 364 |
Estimated Fair Value | 364 | 364 |
Marketable securities: | ||
Amortized Cost | 134,318 | 177,675 |
Gross Unrealized Gains | 3 | 4 |
Gross Unrealized Losses | (637) | (177) |
Estimated Fair Value | 133,684 | 177,502 |
Money market funds | ||
Included in cash and cash equivalents: | ||
Amortized Cost | 17,362 | 24,207 |
Estimated Fair Value | 17,362 | 24,207 |
Restricted cash: | ||
Amortized Cost | 93 | 93 |
Estimated Fair Value | 93 | 93 |
Commercial paper | ||
Included in cash and cash equivalents: | ||
Amortized Cost | 34,159 | 7,499 |
Gross Unrealized Losses | (7) | |
Estimated Fair Value | 34,152 | 7,499 |
Certificate of deposit | ||
Restricted cash: | ||
Amortized Cost | 271 | 271 |
Estimated Fair Value | 271 | 271 |
U.S. Treasury securities (due in less than one year) | ||
Marketable securities: | ||
Amortized Cost | 24,493 | 15,585 |
Gross Unrealized Losses | (174) | (18) |
Estimated Fair Value | 24,319 | 15,567 |
U.S. Treasury securities (due in one to two years) | ||
Marketable securities: | ||
Amortized Cost | 1,524 | |
Gross Unrealized Losses | (3) | |
Estimated Fair Value | 1,521 | |
Municipal securities (due in less than one year) | ||
Marketable securities: | ||
Amortized Cost | 3,000 | |
Gross Unrealized Losses | (50) | |
Estimated Fair Value | 2,950 | |
Municipal securities (due in one to two years) | ||
Marketable securities: | ||
Amortized Cost | 3,000 | |
Gross Unrealized Losses | (15) | |
Estimated Fair Value | 2,985 | |
Government-sponsored enterprise securities (due in less than one year) | ||
Marketable securities: | ||
Amortized Cost | 13,325 | 12,500 |
Gross Unrealized Gains | 3 | |
Gross Unrealized Losses | (29) | (7) |
Estimated Fair Value | 13,299 | 12,493 |
Commercial paper (due in less than one year) | ||
Marketable securities: | ||
Amortized Cost | 67,432 | 84,398 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (215) | (38) |
Estimated Fair Value | 67,217 | 84,362 |
Corporate notes (due in less than one year) | ||
Marketable securities: | ||
Amortized Cost | 26,068 | 36,444 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (169) | (17) |
Estimated Fair Value | $ 25,899 | 36,429 |
Corporate notes (due in one to two years) | ||
Marketable securities: | ||
Amortized Cost | 24,224 | |
Gross Unrealized Losses | (79) | |
Estimated Fair Value | $ 24,145 |
FAIR VALUE MEASUREMENTS - SEC_2
FAIR VALUE MEASUREMENTS - SECURITIES WITH UNREALIZED LOSSES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Available For Sale Securities [Line Items] | ||
Less Than 12 Months - Estimated Fair Value | $ 129,166 | $ 128,591 |
Less Than 12 Months - Gross Unrealized Losses | (434) | (170) |
12 Months or Longer - Estimated Fair Value | 31,865 | 4,993 |
12 Months or Longer - Gross Unrealized Losses | (210) | (7) |
Total - Estimated Fair Value | 161,031 | 133,584 |
Total - Gross Unrealized Losses | (644) | (177) |
U.S. Treasury securities (due in less than one year) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Less Than 12 Months - Estimated Fair Value | 17,333 | 15,567 |
Less Than 12 Months - Gross Unrealized Losses | (147) | (18) |
12 Months or Longer - Estimated Fair Value | 6,986 | |
12 Months or Longer - Gross Unrealized Losses | (27) | |
Total - Estimated Fair Value | 24,319 | 15,567 |
Total - Gross Unrealized Losses | (174) | (18) |
U.S. Treasury securities (due in one to two years) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Less Than 12 Months - Estimated Fair Value | 1,521 | |
Less Than 12 Months - Gross Unrealized Losses | (3) | |
Total - Estimated Fair Value | 1,521 | |
Total - Gross Unrealized Losses | (3) | |
Municipal securities (due in less than one year) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Less Than 12 Months - Estimated Fair Value | 2,950 | |
Less Than 12 Months - Gross Unrealized Losses | (50) | |
Total - Estimated Fair Value | 2,950 | |
Total - Gross Unrealized Losses | (50) | |
Municipal securities (due in one to two years) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Less Than 12 Months - Estimated Fair Value | 2,985 | |
Less Than 12 Months - Gross Unrealized Losses | (15) | |
Total - Estimated Fair Value | 2,985 | |
Total - Gross Unrealized Losses | (15) | |
Government-sponsored enterprise securities (due in less than one year) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Less Than 12 Months - Estimated Fair Value | 2,956 | 1,500 |
12 Months or Longer - Estimated Fair Value | 4,971 | 4,993 |
12 Months or Longer - Gross Unrealized Losses | (29) | (7) |
Total - Estimated Fair Value | 7,927 | 6,493 |
Total - Gross Unrealized Losses | (29) | (7) |
Commercial paper (due in less than one year) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Less Than 12 Months - Estimated Fair Value | 99,936 | 66,872 |
Less Than 12 Months - Gross Unrealized Losses | (222) | (38) |
Total - Estimated Fair Value | 99,936 | 66,872 |
Total - Gross Unrealized Losses | (222) | (38) |
Corporate notes (due in less than one year) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Less Than 12 Months - Estimated Fair Value | 5,991 | 16,001 |
Less Than 12 Months - Gross Unrealized Losses | (15) | (17) |
12 Months or Longer - Estimated Fair Value | 19,908 | |
12 Months or Longer - Gross Unrealized Losses | (154) | |
Total - Estimated Fair Value | 25,899 | 16,001 |
Total - Gross Unrealized Losses | $ (169) | (17) |
Corporate notes (due in one to two years) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Less Than 12 Months - Estimated Fair Value | 24,145 | |
Less Than 12 Months - Gross Unrealized Losses | (79) | |
Total - Estimated Fair Value | 24,145 | |
Total - Gross Unrealized Losses | $ (79) |
FAIR VALUE MEASUREMENTS - RECUR
FAIR VALUE MEASUREMENTS - RECURRING BASIS (Details) - Recurring basis - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value on a Recurring Basis | ||
Total | $ 185,198 | $ 209,208 |
Money market funds | ||
Fair Value on a Recurring Basis | ||
Total | 17,362 | 24,207 |
U.S. Treasury securities | ||
Fair Value on a Recurring Basis | ||
Total | 24,319 | 17,088 |
Municipal securities | ||
Fair Value on a Recurring Basis | ||
Total | 2,950 | 2,985 |
Government-sponsored enterprise securities | ||
Fair Value on a Recurring Basis | ||
Total | 13,299 | 12,493 |
Commercial paper | ||
Fair Value on a Recurring Basis | ||
Total | 101,369 | 91,861 |
Corporate notes | ||
Fair Value on a Recurring Basis | ||
Total | 25,899 | 60,574 |
Level 1 | ||
Fair Value on a Recurring Basis | ||
Total | 17,362 | 24,207 |
Level 1 | Money market funds | ||
Fair Value on a Recurring Basis | ||
Total | 17,362 | 24,207 |
Level 2 | ||
Fair Value on a Recurring Basis | ||
Total | 167,836 | 185,001 |
Level 2 | U.S. Treasury securities | ||
Fair Value on a Recurring Basis | ||
Total | 24,319 | 17,088 |
Level 2 | Municipal securities | ||
Fair Value on a Recurring Basis | ||
Total | 2,950 | 2,985 |
Level 2 | Government-sponsored enterprise securities | ||
Fair Value on a Recurring Basis | ||
Total | 13,299 | 12,493 |
Level 2 | Commercial paper | ||
Fair Value on a Recurring Basis | ||
Total | 101,369 | 91,861 |
Level 2 | Corporate notes | ||
Fair Value on a Recurring Basis | ||
Total | $ 25,899 | $ 60,574 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
CRO and clinical trial costs | $ 22,235 | $ 22,804 |
Securities class action settlement | 24,000 | |
Manufacturing activities | 2,325 | 4,123 |
Professional legal and accounting fees | 3,408 | 2,030 |
Interest payable | 479 | 336 |
Other | 664 | 541 |
Accrued liabilities | $ 53,111 | $ 29,834 |
DEBT - Additional Information (
DEBT - Additional Information (Details) - USD ($) | Jun. 30, 2022 | Jun. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2020 |
Debt Instrument [Line Items] | ||||
Unamortized debt discount and issuance costs | $ 747,000 | |||
Hercules and Silicon Valley Bank [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity under term loan | $ 125,000,000 | $ 75,000,000 | ||
Principal amount outstanding under term loan | 50,000,000 | |||
Carrying value of term loan, net | 50,758,000 | |||
Unamortized debt discount and issuance costs | 747,000 | |||
Accrued end of term charge | $ 1,505,000 | |||
Hercules and Silicon Valley Bank [Member] | Second Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Available remaining loan principal under second amendment | 75,000,000 | |||
Debt discount under second amendment | 100,000 | |||
Debt issuance costs | $ 75,000 | |||
Prepayment charge (as a percentage) | 1.50% | |||
Charge for prepayment occurring 36 months after effective date | $ 0 | |||
Description of term loan payment terms | Under the second amendment, if we choose to prepay the principal with respect to any future draw down after the Effective Date, any such prepayment within the first 36 months after the Effective Date will be subject to a prepayment charge equal to 1.5% of the principal amount prepaid. No prepayment charge will be assessed for any prepayment occurring more than 36 months after the Effective Date. | |||
Minimum cash balance as a percentage of loan amount outstanding | 50% | |||
Debt covenant minimum cash balance | $ 30,000,000 | |||
Hercules and Silicon Valley Bank [Member] | Tranche One [Member] | Second Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity under term loan | $ 20,000,000 | |||
Expiration date to borrow under a tranche for a debt instrument | Sep. 15, 2023 | |||
Hercules and Silicon Valley Bank [Member] | Tranche Two [Member] | Second Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity under term loan | $ 10,000,000 | |||
Start date to borrow under a tranche for a debt instrument | Jan. 01, 2023 | |||
Expiration date to borrow under a tranche for a debt instrument | Dec. 15, 2023 | |||
Hercules and Silicon Valley Bank [Member] | Tranche Three [Member] | Second Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity under term loan | $ 20,000,000 | |||
Start date to borrow under a tranche for a debt instrument | Sep. 15, 2023 | |||
Expiration date to borrow under a tranche for a debt instrument | Sep. 15, 2024 | |||
Hercules and Silicon Valley Bank [Member] | Tranche Four [Member] | Second Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity under term loan | $ 25,000,000 | |||
Expiration date to borrow under a tranche for a debt instrument | Dec. 31, 2024 | |||
Hercules and Silicon Valley Bank [Member] | Option One Minimum Cash Debt Covenant [Member] | Second Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Minimum cash balance as a percentage of loan amount outstanding | 40% | |||
Hercules and Silicon Valley Bank [Member] | Option Two Minimum Cash Debt Covenant [Member] | Second Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Minimum cash balance as a percentage of loan amount outstanding | 25% | |||
Minimum market capitalization requirement for option | $ 750,000,000 | |||
Hercules and Silicon Valley Bank [Member] | Option Three Minimum Cash Debt Covenant [Member] | Second Amendment [Member] | ||||
Debt Instrument [Line Items] | ||||
Minimum cash balance requirement to be met as a percentage of six-month product revenue against forecast | 70% | |||
Minimum percentage of net product revenues maintenance period | 6 months |
DEBT - Schedule of Future Minim
DEBT - Schedule of Future Minimum Payments Under Term Loan Agreement (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Remainder of 2022 | $ 1,495 | |
2023 | 26,409 | |
2024 | 33,858 | |
Total | 61,762 | |
Less: amount representing interest | (8,487) | |
Less: unamortized debt discounts and issuance costs | (747) | |
Less: unamortized end of term charge | (1,770) | |
Less: current portion of debt | (12,959) | |
Noncurrent portion of debt | $ 37,799 | $ 49,830 |
CONTINGENCIES AND UNCERTAINTI_2
CONTINGENCIES AND UNCERTAINTIES - Additional Information (Details) - Insurance Claims - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 02, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Loss Contingencies [Line Items] | |||
Settlement agreement date | September 2, 2022 | ||
Litigation settlement, amount | $ 24,000,000 | ||
Settlement amount, General and administrative expense recognized | $ 7,000,000 | $ 7,000,000 | |
Settlement amount, Accrued liabilities recognized | 24,000,000 | 24,000,000 | |
Settlement amount, Interest and other receivable recognized | $ 17,000,000 | $ 17,000,000 | |
Settlement to be paid by insurers | 17,000,000 | ||
Settlement to be paid in cash or shares as elected by company | $ 7,000,000 |
STOCKHOLDERS' EQUITY - PUBLIC O
STOCKHOLDERS' EQUITY - PUBLIC OFFERING (Details) - 2022 Underwritten Public Offering | Apr. 01, 2022 USD ($) $ / shares shares |
Public Offering [Line Items] | |
Issuance of common stock in connection with public offering (in shares) | shares | 53,333,334 |
Combined public offering price per share of common stock and accompanying stock purchase warrants | $ 1.05 |
Net cash proceeds from public offering after deducting underwriting discount and other offering expenses | $ | $ 69,916,000 |
2022 Pre-Funded Warrant | |
Public Offering [Line Items] | |
Warrant to purchase common stock, shares | shares | 18,095,238 |
Combined public offering price per share of pre-funded warrant and accompanying stock purchase warrant | $ 1.049 |
Warrant exercise price | $ 0.001 |
2022 Stock Purchase Warrants | |
Public Offering [Line Items] | |
Warrant to purchase common stock, shares | shares | 35,714,286 |
Warrant exercise price | $ 1.45 |
STOCKHOLDERS' EQUITY - WARRANT
STOCKHOLDERS' EQUITY - WARRANT EXERCISES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | May 27, 2020 | |
Class of Warrant or Right [Line Items] | ||||
Proceeds from exercise of warrants | $ 3,638,000 | $ 2,479,000 | ||
Purchase Warrants [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Proceeds from exercise of warrants | $ 3,638,000 | |||
2020 Public Offering of Common Stock and Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrant to purchase common stock, shares | 52,975,463 | 52,975,463 | ||
2020 Public Offering of Common Stock and Warrants | 2020 Pre-Funded Warrant | ||||
Class of Warrant or Right [Line Items] | ||||
Warrant to purchase common stock, shares | 8,335,239 | 8,335,239 | 8,335,239 | |
Underwritten Public Offering | Stock Purchase Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants to purchase common stock exercised, shares | 2,798,003 | 2,798,003 |
STOCKHOLDERS' EQUITY - 2018 IND
STOCKHOLDERS' EQUITY - 2018 INDUCEMENT AWARD PLAN (Details) - 2018 Inducement Award Plan - shares | 1 Months Ended | |
Jul. 31, 2022 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Common stock, shares reserved for future issuance (in shares) | 21,100,000 | |
Common stock, increase in shares reserved for future issuance (in shares) | 5,000,000 |