Geron Secures Up to $375 Million from Royalty Pharma and Pharmakon Advisors

Geron Corporation, a commercial-stage biopharmaceutical company headquartered in Foster City, California, has secured up to $375 million in synthetic royalty and debt financings. These financings are with Royalty Pharma and investment funds managed by Pharmakon Advisors, LP. At the initial closing, $250 million in cash was provided, with an additional $125 million in debt available for future use. The financial transactions consist of a $125 million synthetic royalty with Royalty Pharma and $250 million in senior secured debt managed by Pharmakon Advisors.

According to Michelle Robertson, Geron's Executive Vice President and Chief Financial Officer, the significant financial backing from Royalty Pharma and Pharmakon Advisors enhances the company's cash position, solidifies its balance sheet, and grants flexibility to invest in future endeavors. The funds will support the U.S. commercial launch of their drug RYTELO and its potential launch in the European Union. Additionally, the proceeds will be used to complete Phase 3 of the IMpactMF trial for relapsed/refractory myelofibrosis, invest in supply chain redundancy for RYTELO, and meet other general working capital needs.

Royalty Pharma contributed $125 million at closing and will receive tiered royalty payments from U.S. sales of RYTELO. These royalties range from 7.75% of annual net sales up to $500 million, 3.0% of annual net sales between $500 million and $1 billion, and 1.0% of annual net sales exceeding $1 billion. Payments to Royalty Pharma will cease if the aggregate royalties payable through June 30, 2031, reach a multiple of 1.65 times their investment, otherwise, until they receive a multiple of 2.0 times their investment, there will be no additional royalties. RYTELO, developed internally and exclusively owned by Geron, is a first-in-class telomerase inhibitor.

Pablo Legorreta, founder and CEO of Royalty Pharma, expressed enthusiasm for the partnership with Geron, noting the significant commercial and development opportunities ahead for RYTELO, particularly for lower-risk myelodysplastic syndrome (MDS) patients who have limited treatment options.

Investment funds managed by Pharmakon Advisors have committed to a five-year, senior secured term loan of up to $250 million. An initial tranche of $125 million has been drawn at closing, with part of these proceeds used to repay $86.5 million owed under the company's existing loan with Hercules Capital, Inc. and Silicon Valley Bank, which has now been terminated. Geron has the option to draw a second tranche of $75 million, subject to certain conditions, and a third tranche of $50 million upon reaching a specified RYTELO revenue milestone, both available until December 31, 2025. The loan facility contains no scheduled amortization payments, with all outstanding principal due at maturity in 2029, and no financial covenants. The loans bear interest at a variable rate equal to 5.75% plus the three-month Secured Overnight Financing Rate (SOFR), with a SOFR floor of 3.00%.

Pedro Gonzalez de Cosio, CEO of Pharmakon Advisors, praised the Geron team for their commercial success in the U.S. with RYTELO and expressed eagerness to support the company's potential launch in the EU and further development of the drug for additional hematologic malignancies.

Financial and legal advisory services for Geron were provided by TD Cowen and Cooley LLP, respectively. Royalty Pharma received legal advice from Goodwin Procter and Fenwick & West LLP, while Akin Gump LLP served as the legal advisor to Pharmakon Advisors.

Geron Corporation is dedicated to transforming the treatment of blood cancer with their pioneering telomerase inhibitor, RYTELO, which is approved in the United States for treating certain adult patients with lower-risk myelodysplastic syndromes (LR-MDS) with transfusion-dependent anemia. Additionally, Geron is conducting a pivotal Phase 3 clinical trial of imetelstat for JAK-inhibitor relapsed/refractory myelofibrosis (R/R MF) and exploring other myeloid hematologic malignancies. The goal is to inhibit telomerase activity, which is elevated in malignant stem and progenitor cells in the bone marrow, thereby aiming to reduce proliferation and induce the death of malignant cells.