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GC

GERON CORP (GERN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 total net revenue was $39.6M and net product revenue was $39.4M; sequential decline from Q4 2024 ($47.5M) was primarily due to distributor inventory drawdown despite flat underlying demand (+1% over the 13 weeks through March 28) .
  • EPS was -$0.03 vs Wall Street consensus of -$0.0386, a beat; revenue was below consensus ($48.5M), a miss. Bold: EPS beat; revenue miss. Values with asterisk retrieved from S&P Global *.
  • Management highlighted early positive indicators post-quarter: ~900 sites have utilized RYTELO, ~two-thirds of prior accounts reordered in Q1, and demand grew ~10% in the 4-week period ending April 25; payer coverage reached ~85% of U.S. lives .
  • FY 2025 OpEx guidance maintained at $270–$285M; cash, cash equivalents, restricted cash and marketable securities were ~$457.5M as of March 31, 2025; management believes existing resources plus U.S. RYTELO revenues can fund operations for the foreseeable future .
  • Strategic catalysts: EC marketing authorization for RYTELO in March 2025; IMpactMF Phase 3 ~85% enrolled with interim analysis expected in 2H 2026; commercial planning underway for select EU countries starting in 2026 .

What Went Well and What Went Wrong

What Went Well

  • “We are confident in the long-term potential of RYTELO… and are sharply focused on maximizing the U.S. commercial opportunity,” said Interim CEO Dawn Bir, noting expanded investments to strengthen trajectory .
  • Commercial traction indicators improved: ~900 sites of care have now utilized RYTELO (+~300 vs Q4), ~2/3 of ordering accounts reordered in Q1, and April month-over-month demand rose ~10%, the highest since October 2024 .
  • Payer access robust: ~85% of U.S. covered lives now under favorable medical coverage policies aligned to FDA label/NCCN guidelines; management aggressively expanding field presence and KOL advocacy .

What Went Wrong

  • Net product revenue fell to $39.4M from $47.5M in Q4 due to distributor inventory drawdown; underlying demand grew only ~1% over the 13-week period, underscoring near-term softness .
  • Adoption skewed to later lines (third-line+), with slower-than-expected uptake in earlier lines; management emphasized need to drive second-line ESA relapsed/refractory use, particularly RS-negative patients .
  • Inventory normalization impacted reported revenues; quarter-end channel inventory moved from ~3.5 weeks in Q4 to ~2–2.5 weeks in Q1, suggesting transient pressure on sell-in despite stable demand .

Financial Results

Revenue and EPS vs prior periods (USD)

MetricQ3 2024Q4 2024Q1 2025
Total Net Revenue ($M)$28.3 $47.5 $39.6
Net Product Revenue ($M)$28.2 $47.5 $39.4
EPS (GAAP)-$0.04 -$0.04 -$0.03

Operating Expense Structure (USD)

MetricQ3 2024Q4 2024Q1 2025
Cost of Goods Sold ($M)$0.456 $0.783 $1.206
Research & Development ($M)$20.153 $23.433 $15.078
Selling, General & Admin ($M)$35.877 $43.371 $40.023
Total Operating Expenses ($M)$56.486 $67.587 $56.307
Net Loss ($M)$(26.447) $(25.352) $(19.835)

Consensus vs Actual

MetricQ1 2025 ActualQ1 2025 ConsensusSurprise
Revenue ($M)$39.603 $48.541*-$8.938M (miss)
EPS ($)-$0.03 -$0.0386*+$0.0086 (beat)

Values with asterisk retrieved from S&P Global.

Segment Breakdown (Q1 2025)

ComponentQ1 2025 ($M)
Net Product Revenue (RYTELO)$39.436
Royalties$0.167
Total Net Revenue$39.603

KPIs

KPIQ4 2024Q1 2025Notes
Sites of Care Utilizing RYTELO~600+ (implied baseline) ~900 +~300 QoQ
Reorder Rate (accounts)n/a~2/3 reordered Quarterly metric
Demand Trend (MoM)Softness around holidays +10% April over March Highest since Oct-2024
Payer Coverage~80% (Q4 commentary) ~85% of U.S. lives Strengthening access
Channel Inventory Weeks~3.5 weeks (Q4) ~2.0–2.5 weeks (Q1) Normalizing sell-in

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Operating ExpensesFY 2025$270–$285M (Q4 2024) $270–$285M (Q1 2025) Maintained
IMpactMF Interim Analysis TimingOverall Survival endpoint“Early 2026” (Q3 2024) “2H 2026” (Q1 2025) Pushed later
EU Commercialization (RYTELO)Initial EU marketsCommencing 2026 (Q4 2024) Commencing 2026 (Q1 2025) Maintained
Liquidity/RunwayNear-termConfident in funding; scenarios to breakeven (Q4) Resources + U.S. revenues sufficient for foreseeable future (Q1) Maintained tone

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
U.S. Commercial TrajectoryInitial strong uptake ($28.2M Q3; $47.5M Q4); steady growth expected Q1 revenues down on inventory; flat underlying demand; focused investments to reignite growth Near-term pressure; plan to reaccelerate
Inventory/SeasonalitySeasonality around holidays; variable weekly trends Q4→Q1 inventory drawdown; normalized to ~2–2.5 weeks Normalizing
Earlier-line AdoptionAmbition to build second-line RS-negative positioning Majority use in 3L+; targeted messaging to move earlier-line use Gradual improvement targeted
KOL Advocacy & Field ExpansionBuilding medical affairs support; early KOL feedback positive +20% field increase, new regional marketing team; expanding MSL footprint; payer MSLs Increasing share-of-voice
Payer AccessStrong policies ~80% covered lives ~85% coverage; continued strengthening Improving
EU Approval & Launch PlanningCHMP positive opinion; preparing for EU EC approval granted; launch planning for 2026 with partners Progressing
MF Program (IMpactMF, IMproveMF)~80% enrolled; interim “2H 2026” outlook evolving ~85% enrolled; interim in 2H 2026; tolerability data in IMproveMF On track; visible milestones

Management Commentary

  • Dawn Bir: “Q1 RYTELO net revenues were $39.4 million, down $8 million from Q4… The lower quarter-over-quarter net revenue is due to the inventory drawdown… We expect our increased commercial investments to bolster uptake across a broader group of prescribers and drive long-term demand” .
  • James Ziegler: “We are increasing our customer-facing teams by more than 20%… adding… oncology clinical educators and… regional marketing team… We plan to have the new hires… in the field beginning in early Q3 and expect to see their impact later this year” .
  • Joseph Eid: “We are… doubling the size of our overall medical affairs team… KOLs are interested in RYTELO’s unique mechanism… and learning more about our data that suggests potential for disease modification” .
  • Michelle Robertson: “Gross to net was similar from Q4 to Q1 and did not significantly contribute to the quarter-over-quarter net revenue decline… For fiscal year 2025, we still expect our total operating expenses to be in the range of approximately $270 million to $285 million” .

Q&A Highlights

  • Inventory dynamics: Multiple analysts probed channel inventory effects and normalization; management indicated Q4 inventories at ~3.5 weeks and Q1 at ~2–2.5 weeks; believes position is stabilized for Q2 .
  • Cadence and sales force impact: New reps expected in field in early Q3 with impact later in 2025; momentum building into Q2 on early indicators (sites, demand growth) .
  • Earlier-line switching: Questions on luspatercept-to-RYTELO transitions; management cited supportive post-hoc and real-world insights, and emphasized RS-negative second-line differentiation and manageable cytopenia profile .
  • Demand sustainability: April demand +10% vs March flagged as promising, with focus on sustaining growth through execution and messaging .
  • OpEx and investment: Despite increased commercial/medical investments, OpEx guidance unchanged; management reallocating within budget to maintain range .

Estimates Context

  • Q1 2025: Revenue $39.603M vs consensus $48.541M* → miss of -$8.938M. EPS -$0.03 vs consensus -$0.0386* → beat of +$0.0086 *.
  • FY 2025 consensus revenue: $186.756M*; near-term estimate adjustments likely reflect inventory normalization, pace of earlier-line adoption, and field expansion timing*.
  • Q2 2025: Consensus revenue $47.303M* and EPS -$0.0289*; actuals subsequently tracked at $49.036M revenue and -$0.02 EPS*, suggesting better-than-expected sell-through post Q1 channel reset*.
    Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term print: Revenue miss driven by channel inventory drawdown, not underlying demand; EPS beat reflects cost discipline and mix .
  • Execution playbook: Expanded field presence (+20%), refined targeting, and stronger KOL advocacy are key to shifting utilization to earlier lines and accelerating new patient starts in 2H 2025 .
  • Leading indicators: Site growth (+~300 QoQ), ~2/3 reorder, and April +10% demand momentum support reacceleration potential into Q2/Q3 .
  • Access/coverage: ~85% coverage, improving KOL support, and educational push on cytopenia management should mitigate hesitation and broaden prescriber base .
  • Strategic upside: EC approval expands geographic optionality; IMpactMF interim (2H 2026) is a significant optionality event that could enlarge the addressable market materially if positive .
  • Financial posture: OpEx guidance maintained; liquidity (~$457.5M) and financing structures support continued commercial investment without immediate equity needs .
  • Trading lens: Watch for sequential improvements in sell-out/demand, prescriber breadth/depth, and earlier-line mix; any confirmation of sustained demand growth or stronger second-line adoption should be a positive catalyst .

Values with asterisk retrieved from S&P Global.