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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FOR THE PERIOD ENDED JUNE 30, 2002

OR

FOR THE TRANSITION PERIOD FROM _________ TO __________.

COMMISSION FILE NUMBER: 0-20859

GERON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

230 CONSTITUTION DRIVE, MENLO PARK, CA 94025
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (650) 473-7700

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

COMMON STOCK $0.001 PAR VALUE
(TITLE OF CLASS)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class: Common Stock $0.001 par value		Outstanding at July 30, 2002:
		24,737,341 shares

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GERON CORPORATION

INDEX

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GERON CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

See accompanying notes.

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GERON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)

				THREE MONTHS ENDED								SIX MONTHS ENDED
				JUNE 30,								JUNE 30,
				2002				2001				2002				2001
Revenues from collaborative agreements				$	15			$	500			$	530			$	2,250
License fees and royalties					96				85				207				132
		Total revenues			111				585				737				2,382
Operating expenses:
	Research and development				8,146				6,644				18,310				13,356
	General and administrative				1,453				1,362				3,049				5,277
		Total operating expenses			9,599				8,006				21,359				18,633
Loss from operations					(9,488	)			(7,421	)			(20,622	)			(16,251	)
Interest and other income					665				1,584				1,536				3,250
Interest and other expense					(185	)			(244	)			(397	)			(516	)
Net loss				$	(9,008	)		$	(6,081	)		$	(19,483	)		$	(13,517	)
Basic and diluted net loss per share				$	(0.37	)		$	(0.28	)		$	(0.79	)		$	(0.62	)
Weighted average shares used in computing basic and diluted net loss per share					24,674,456				21,809,085				24,582,423				21,795,600

See accompanying notes.

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GERON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CHANGE IN CASH AND CASH EQUIVALENTS
(IN THOUSANDS)
(UNAUDITED)

				SIX MONTHS ENDED
				JUNE 30,
				2002				2001
Cash flows from operating activities:
	Net loss			$	(19,483	)		$	(13,517	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation and amortization			747				713
		Accretion and amortization on investments			517				(45	)
		Interest for convertible debentures			10				63
		Issuance of redeemable common stock in exchange for acquired research technology			1,585				—
		Stock-based compensation			—				2,576
		Accretion of interest on research funding obligation			245				245
		Deferred compensation			120				120
		Loss on equity investments in licensees			94				14
	Changes in assets and liabilities:
		Other current and noncurrent assets			1,760				341
		Other current and noncurrent liabilities			(969	)			1,633
		Translation adjustment			(70	)			(174	)
Net cash used in operating activities					(15,444	)			(8,031	)
Cash flows from investing activities:
	Capital expenditures				(274	)			(784	)
	Purchases of securities available-for-sale				(4,112	)			(27,333	)
	Proceeds from sales/calls of securities available-for-sale				—				14,589
	Proceeds from maturities of securities available-for-sale				30,276				16,540
	Accrued research funding payments				(1,216	)			(1,544	)
Net cash provided by investing activities					24,674				1,468
Cash flows from financing activities:
	Proceeds from equipment loans				498				—
	Payments of obligations under equipment loans				(437	)			(480	)
	Proceeds from issuance of common stock, net				181				132
Net cash provided by (used in) financing activities					242				(348	)
Net increase (decrease) in cash and cash equivalents					9,472				(6,911	)
Cash and cash equivalents at the beginning of the period					18,773				29,985
Cash and cash equivalents at the end of the period				$	28,245			$	23,074

See accompanying notes.

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GERON CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002
(UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

     The accompanying condensed consolidated unaudited balance sheet as of June 30, 2002 and condensed consolidated statements of operations for the three and six month period ended June 30, 2002 and 2001 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 generally accepted accounting principles for complete financial statements. In the opinion of the management of Geron Corporation, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month period ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002 or any other period. These financial statements and notes should be read in conjunction with the financial statements for the year ended December 31, 2001, included in the Company’s Annual Report on Form 10-K. The accompanying condensed consolidated balance sheet as of December 31, 2001 has been derived from audited financial statements at that date.

Principles of Consolidation

     The consolidated financial statements include the accounts of Geron Corporation and its wholly owned subsidiary, Geron Bio-Med Ltd., a United Kingdom company. Intercompany accounts and transactions have been eliminated. The financial statements of the Company’s subsidiary outside the United States are measured using the local currency as the functional currency. Assets and liabilities of this subsidiary are translated at the rates of exchange at the balance sheet date. The resultant translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Income and expense items are translated at average monthly rates of exchange.

Net Loss Per Share

     Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding. Because the Company is in a net loss position, diluted earnings per share is also calculated using the weighted average number of common shares outstanding and excludes the effects of options, warrants and convertible securities which are antidilutive. Had the Company been in a net income position, diluted earnings per share would have included the shares used in the computation of basic net loss per share as well as an additional 504,014 and 1,775,839 shares for 2002 and 2001, respectively, related to outstanding options, warrants and convertible securities not included above (as determined using the treasury stock method at the estimated average market value).

Use of Estimates

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash Equivalents and Marketable Debt Securities Available-For-Sale

     The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company is subject to credit risk related to its cash equivalents and securities available-for-sale. The Company places its cash and cash equivalents in money market funds, municipal notes and commercial paper. The Company’s investments include corporate notes in United States corporations and municipal securities with original maturities ranging from 1 day to 9 months.

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     The Company classifies its marketable debt securities as available-for-sale. Available-for-sale securities are recorded at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) in stockholders’ equity. Fair values for investment securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments. Realized gains and losses are included in interest and other income and are derived using the specific identification method for determining the cost of securities sold and have been immaterial to date. Declines in market value judged other-than-temporary result in a charge to interest income. Dividend and interest income are recognized when earned.

Revenue Recognition

     Since the Company’s inception, a substantial portion of its revenues has been generated from license and research agreements with collaborators. The Company recognizes revenue under these collaborative agreements as the related research and development costs are incurred. Milestone fees are recognized upon completion of specified milestones according to contract terms. Deferred revenue represents the portion of research payments received which have not been earned.

     The Company also has several license, option and marketing agreements with various diagnostic, research tools, agriculture, biologics production and cancer immunotherapy companies. With each of these agreements, the Company receives nonrefundable license payments in cash or equity securities, option payments in cash or equity securities, royalties on future sales of products, or any combination of these items. Nonrefundable signing or license fees that are not dependent on future performance under these agreements are recognized as revenue when received and over the term of the arrangement if the Company has continuing performance obligations. Option payments are recognized as revenue over the period of the option agreement. Royalties are generally recognized upon receipt.

Restricted Cash

     As of June 30, 2002 and 2001, the Company held $530,000 in a Certificate of Deposit as collateral on an unused line of credit.

Marketable and Non-Marketable Equity Investments in Licensees

     Equity in nonpublic companies is carried at the lower of cost or net realizable value. Equity in public companies is carried at the market value as of the balance sheet date. Unrealized gains and losses are included as a separate component of stockholders’ equity. Realized gains or losses are included in interest and other income and are derived using the specific identification method. Statement of Financial Accounting Standards No. 115 (SFAS 115), “Accounting for Certain Investments in Debt and Equity Securities”, requires companies to determine whether a decline in fair value below the amortized cost basis is other than temporary. If a decline in fair value is determined to be other than temporary, SFAS 115 requires the carrying value of the debt or equity security to be written down to its fair value. No such writedowns were recorded for the three and six months ended June 30, 2002 and 2001.

Depreciation and Amortization

     The Company records property and equipment at cost and calculates depreciation using the straight-line method over the estimated useful lives of the assets, generally four years. Leasehold improvements are amortized over the remaining term of the lease.

Comprehensive Income (Loss)

     Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes certain changes in equity that are excluded from net income (loss). Specifically, net unrealized losses on our available-for-sale securities and equity investments in licensees of ($370,000), which are included in stockholders’ equity, and cumulative translation adjustment of ($97,000) are included in accumulated other comprehensive income (loss).

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Reclassifications

     Certain reclassifications of prior year amounts have been made to conform to current year presentation, including restricted cash, notes receivable from stockholders, and accretion and amortization of investments.

2. CONVERTIBLE DEBENTURES

     In November 2001, the Company modified the terms of the remaining $15,000,000 of series D convertible debentures to extend the maturity date to June 30, 2005, increase the yield on the debentures to 2.5%, and fix the conversion price at $20.00 per share. In addition, the Company modified the terms of the related outstanding warrants that were originally issued with the series D debentures to reset the exercise price of 40% of the warrants to $15.625 per share and extend the exercise period to June 30, 2003 (series D-1 warrants) and 60% of the warrants to $25.00 per share and extend the exercise period to December 31, 2006 (series D-2 warrants). The $1,300,000 excess of the fair value over the face value of the debentures is being amortized over the life of the amended series D convertible debentures as a reduction of interest expense, $177,000 for the six months ended June 30, 2002. The Company is also accruing 2.5% interest on the amended series D convertible debentures as interest expense over the life of the debentures, $187,000 for the six months ended June 30, 2002. The fair values used in calculating the conversion expense associated with the series D-1 and D-2 warrants and the amended series D convertible debentures were based on values determined through an independent valuation.

     As of June 30, 2002, $15,000,000 in aggregate principal amount of series D convertible debentures and series D warrants to purchase 834,836 shares of Geron common stock remained outstanding.

3. RESTRUCTURING CHARGE

     In June 2002, Geron restructured its organization to focus internal resources on its most advanced and promising product development programs. In the process, Geron reduced its research staff by 33 employees and its support staff by 10 employees, a reduction of approximately 30% of Geron’s work force in Menlo Park, California and Edinburgh, Scotland. Geron recorded a restructuring charge of $706,000, of which $625,000 related to research and development expense and $81,000 related to general and administrative expense, none of which were paid as of June 30, 2002.

4. SEGMENT INFORMATION

     Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS 131”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. SFAS 131 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions how to allocate resources and assess performance. The Company’s chief decision maker, as defined under SFAS 131, is the Chief Executive Officer. To date, the Company has viewed its operations as principally one segment, the development of therapeutic and diagnostic products for applications in oncology, drug discovery and regenerative medicine. As a result, the financial information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

5. CONSOLIDATED STATEMENT OF CASH FLOWS DATA

		SIX MONTHS				SIX MONTHS
		ENDED				ENDED
(IN THOUSANDS)		JUNE 30, 2002				JUNE 30, 2001
		(Unaudited)				(Unaudited)
Supplementary Investing and Financing Activities:
Common stock issued under purchase plan		$	128			$	233
Net unrealized gain (loss) on equity investment		$	(150	)		$	908
Net unrealized gain (loss) on available-for-sale securities		$	(341	)		$	353

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

     This Form 10-Q contains forward-looking statements that involve risks and uncertainties. We use words such as “anticipate”, “believe”, “plan”, “expect”, “future”, “intend” and similar expressions to identify forward-looking statements. These statements appear throughout the Form 10-Q and are statements regarding our intent, belief, or current expectations, primarily with respect to our operations and related industry developments. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-Q. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us and described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, in the section of this Item 2 titled “Additional Factors That May Affect Future Results,” and elsewhere in this Form 10-Q.

     The following discussion should be read in conjunction with the unaudited financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

     We are a biopharmaceutical company focused on developing and commercializing therapeutic and diagnostic products for applications in oncology and regenerative medicine, and research tools for drug discovery. Our product development programs are based upon three patented core technologies: telomerase, human embryonic stem cells and nuclear transfer.

     Our results of operations have fluctuated from period to period and may continue to fluctuate in the future based upon the timing and composition of funding under our various collaborative agreements, as well as the progress of our research and development efforts and variations in the level of expenses related to developmental efforts during any given period. Results of operations for any period may be unrelated to results of operations for any other period. In addition, historical results should not be viewed as indicative of future operating results. We are subject to risks common to companies in our industry and at our stage of development, including risks inherent in our research and development efforts, reliance upon our collaborative partners, enforcement of our patent and proprietary rights, need for future capital, potential competition and uncertainty of regulatory approvals or clearances. In order for a product to be commercialized based on our research, we and our collaborators must conduct preclinical tests and clinical trials, demonstrate the efficacy and safety of our product candidates, obtain regulatory approvals or clearances and enter into manufacturing, distribution and marketing arrangements, as well as obtain market acceptance. We do not expect to receive revenues or royalties based on therapeutic products for a period of years, if at all.

CRITICAL ACCOUNTING POLICIES

     We consider certain accounting policies related to revenue recognition, consolidation and use of estimates to be critical policies.

Revenue Recognition

     Since our inception, a substantial portion of our revenues has been generated from license and research agreements with collaborators. We recognize cost reimbursement revenue under these collaborative agreements as the related research and development costs are incurred. We recognize milestone fees upon completion of specified milestones according to contract terms. Deferred revenue represents the portion of research payments received which has not been earned.

     We also have several license, option and marketing agreements with various diagnostic, research tools, agriculture, biologics production and cancer immunotherapy companies. With each of these agreements, we may receive nonrefundable license payments in cash or equity securities, option payments in cash or equity securities, royalties on future sales of products, or any combination of these items. We recognize

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nonrefundable signing or license fees that are not dependent on future performance under these agreements as revenue when received and over the term of the arrangement if we have continuing performance obligations. We recognize option payments as revenue over the period of the option agreement. We generally recognize royalties as revenue upon receipt.

Consolidation

     Our consolidated financial statements include the results of Geron in the United States and our wholly owned subsidiary, Geron Bio-Med Ltd., a United Kingdom company. Transactions and accounts between us and Geron Bio-Med have been eliminated. We translate the assets and liabilities of Geron Bio-Med from British pounds sterling into United States dollars using foreign exchange rates as of the balance sheet date. We translate the revenues and expenses of Geron Bio-Med using average monthly foreign exchange rates. Translation adjustments are included in the balance sheet under accumulated other comprehensive income (loss), a separate component of stockholders’ equity.

Use of Estimates

     In preparing our consolidated financial statements to conform with accounting principles generally accepted in the United States, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. These estimates include useful lives for fixed assets for depreciation calculations, estimated lives for license agreements related to deferred revenue and assumptions for valuing options and warrants. Actual results could differ from these estimates.

RESULTS OF OPERATIONS

Revenues

     We recognized revenues from collaborative agreements of $15,000 and $530,000 for the three and six months ended June 30, 2002, compared to $500,000 and $2,250,000 for the comparable periods in 2001. Revenues recognized in 2002 reflected the final research support payment from our collaborative agreement with Kyowa Hakko and a consulting payment from Modex Therapeutiques. Revenues recognized in 2001 reflected the final research support payments from our collaborative agreements with Pharmacia and Kyowa Hakko. Our agreement with Pharmacia terminated in January 2001. Kyowa Hakko selected GRN163, a telomerase inhibitor compound, for development in August 2001, which moved the project from the research phase to the development phase. Kyowa Hakko is not obligated to provide any further research funding in the future. We recognize revenue under collaborative agreements as we incur the related research and development costs.

     We have entered into license and option agreements with companies involved with diagnostics, research tools, agriculture, biologics production and cancer immunotherapy. In each of these agreements, we have granted certain rights to our technologies. In connection with the agreements, we are entitled to receive license fees, option fees, milestone payments, royalties on future sales, or any combination. We recognized license and option fee revenues of $61,000 and $122,000 for the three and six months ended June 30, 2002 as compared to $43,000 and $48,000 for the same periods in 2001 related to our various agreements. Also, we received royalties of $35,000 and $85,000 for the three and six months ended June 30, 2002, compared to $42,000 and $84,000 for the comparable periods in 2001, on product sales of telomerase diagnostic kits to the research-use-only market and cell-based research products. License and royalty revenues are dependent upon additional agreements being signed and future product sales. We expect to recognize revenue of $277,000 in 2002, $238,000 in 2003, $120,000 in 2004, $127,000 in 2005 and $547,000 thereafter related to our existing deferred revenue. Current revenues may not be predictive of future results.

Research and Development Expenses

     Research and development expenses were $8.1 million and $18.3 million for the three and six months ended June 30, 2002, compared to $6.6 million and $13.4 million for the comparable periods in 2001. The increase in research and development expenses for the six month period compared to the comparable period in 2001 was primarily the result of increased scientific personnel expenses of $1.2 million, $1.2 million in increased scientific supplies and the acquisition of research technology from Lynx Therapeutics, Inc. in the

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amount of $2.5 million. The increase in scientific personnel expenses includes $625,000 of payroll-related costs as a result of restructuring the organization in June 2002.

General and Administrative Expenses

     General and administrative expenses were $1.5 million and $3.0 million for the three and six months ended June 30, 2002, compared to $1.4 million and $5.3 million for the comparable periods in 2001. The increase in general and administrative expenses for the three month period ending June 30, 2002, reflects $81,000 of payroll-related costs as a result of restructuring the organization in June 2002. In 2001, $2.4 million of stock-based compensation expense was recorded as a result of extending the exercise period of certain options to purchase common stock. In the three and six months ended June 30, 2002, no such stock-based compensation expense was recorded.

Interest and Other Income

     Interest income was $466,000 and $1.2 million for the three and six months ended June 30, 2002, compared to $1.3 million and $2.9 million for the comparable periods in 2001. The decrease in interest income for 2002 compared to 2001 was primarily due to lower interest rates and decreasing cash and investment balances. Interest earned in the future will depend on any future funding cycles and prevailing interest rates. We also received $199,000 and $358,000 in research payments under government grants for the three and six months ended June 30, 2002, compared to $244,000 and $323,000 for the comparable periods in 2001. We expect income from government grants to decrease in the future.

Interest and Other Expense

     Interest and other expense was $185,000 and $397,000 for the three and six months ended June 30, 2002, compared to $244,000 and $516,000 for the comparable periods in 2001. The decrease in interest and other expense for 2002 compared to 2001 was primarily the result of lower interest expenses related to convertible debentures in 2002.

Net Loss

     Net loss was $9.0 million and $19.5 million for the three and six months ended June 30, 2002, compared to $6.1 million and $13.5 million for the comparable periods in 2001. The increase in net loss for 2002 compared to 2001 was primarily the result of higher research and development expenses, decreased revenues from collaborative agreements and decreased interest income.

LIQUIDITY AND CAPITAL RESOURCES

     Cash, restricted cash, cash equivalents and investments at June 30, 2002 totaled $62.1 million compared to $79.6 million at December 31, 2001. The decrease in cash, cash equivalents and investments in 2002 was the result of cash used for operations. We have an investment policy to invest these funds in liquid, investment-grade securities, such as interest-bearing money market funds, commercial paper and municipal securities.

     Net cash used in operations was $15.4 million for the six months ended June 30, 2002 compared to $8.0 million for the comparable period in 2001. The increase was primarily a result of increased research and development expenses and decreased revenues from collaborative partners for the six months ending June 30, 2002.

     Through June 30, 2002, we have invested approximately $12.4 million in property and equipment, of which approximately $8.3 million was financed through equipment financing. As of June 30, 2002, we had approximately $900,000 available for borrowing under our equipment financing arrangements. The drawdown period under the equipment financing arrangements expires on August 31, 2002. We intend to renew the commitment for a new equipment financing facility in 2002 to further fund equipment purchases. If we are unable to renew the commitment, then we will need to spend our own resources for equipment purchases.

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     As of December 31, 2001, our contractual obligations for the next five years and thereafter are as follows:

Principal Payments Due by Period

Contractual Obligations(1)

Less Than 1 Year

1-3 Years

4-5 Years

After 5 Years

Total

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