Gauging GERN’S outlook post—continuation decision. Part 1 of 3.
If GERN opts-in, there will be a $65 million milestone payment. Further and immediate
milestone payments will be made as the new trials progress. It’s highly probable that a regulatory
filing would be forthcoming within a year (I believe on the near-side of that year). With
approval, of course, GERN will receive royalty revenue, and that’s in addition to further sales
milestone payments.
Also, GERN must reimburse INJ for some of the costs in Imbark/Imerge. The cost structure for
the P3 in Imerge and possibly a P3 post-Imbark will be reduced from 50/50 to 20/80. If I recall
correctly, I believe the AML trial will also be split 20/80.
The development plan will inform their course of actions. Besides the reimbursement obligation,
if JNJ intends to pursue many indications then I would expect a further fund raising. If GERN
seeks to initiate any IDPs, or in the case of an acquisition by GERN, I would also expect fund
raising. That might mean loans and/0r dilutions. I think having the S3 could incline them to the
latter. Do put these dilutions into context, though; these would be dilutions aimed at expanding
the program (and hence growing revenue) and not dilutions aimed at debt service or simply
maintaining op~ex. These dilutions would be funds which are immediately available, whereas
the nature of milestone payments is that they are conditional and paid incrementally. In other
words, a dilution in this context means they’re creating value— more on this later.
I think they would need some time to digest what the development plan is and what IDPs they
might pursue. So I would expect those dilutions, if any, would occur within the first year, post-
continuation.
Furthermore, I would not be surprised if we saw a change in the board post—continuation. It may
be a milestone achievement for Imet but also the fulfillment of a personal achievement. With
JNJ having exclusive rights, and GERN being flush with royalty and milestone payments, I think
members of the board may feel they’ve successfully guided GERN into safe harbors; safe enough
that some may feel they’ve fulfilled their purpose.
Gauging GERN’s outlook post-continuation decision. Part 2 of 3.
How might the market interpret any subsequent fund raising and changes in the board? GERN
pre—continuation compared to post—continuation is a completely and categorically different
company. Post-continuation, GERN is a company transitioning from small-cap to mid-cap.
There are any number of comparisons here, and I think the glaring one, as far as near-term
prospects, is INCY. To date, the market had held GERN at arm’s length b/c of the inherent risk
in the one—candidate pipeline. Upon continuation, GERN is de—risked. By now, I think the data
and the scientific community’s enthusiasm and support make approval a near-certainty (not to
mention JN J ’5 continued support).
At that point, the market’s expectation for Imet will be very significant; and any changes in the
board should be easily rationalized and absorbed since the company will also be transitioning,
and any dilutions should be viewed as extremely positive. While GERN may initially be
compared to INCY, the fact of the matter is that Imet has a profile more similar to Imbruvica. I
mentioned previously that Imbruvica has some 20 indications approved and in clinicals; here, we
must consider the reality that Imet is a first—in—class telomerase inhibitor. It is a new—age drug,
the full potential of which is yet unmeasured. We know it works in blood, inter alia, and we
know theory takes Imet much, much deeper. If you’ve read the literature, or even my
breakdown/conclusion series, then you know combos are the future of Imet. And it will take
funds to realize those combos, You don’t get something for nothing, And the market will see
fund raising, whichever kind, in this context: growth.
I’ll liken Imet to the effect of the intemet on commerce; the depth of Imet’s potential is very
deep. We are just now in the incipient stages of introducing an entirely new class of drug. Let
that sink in a moment. Yes, that heady feeling you’re having, that’s the feeling of witnessing a
revolutionary treatment paradigm being established, a revolutionary theory turned to practice.
“Revolutionary” really is the apt word. And that’s what the market will anticipate. Upon
continuation and approval, those that had held GERN at arm’s length will be forced to reckon the
comprehensive significance of telomerase inhibition as an operational treatment paradigm.
Gauging GERN’s outlook post-continuation decision. Part 3 of 3.
Of course, there is the scenario of a buyout, in which case dilutions and board changes are out of
the equation, I think the buyout scenario has been played—out in everyone’s mind, and there’s
certainly no shortage of speculation. But let me color these speculations with the very stark
reality that a buyout doesn’t just mean INJ owns GERN, it means JNJ will own
telomerase inhibition categorically, the only manifest telomerase inhibition in the game for years
to come. I want to emphasize the significance of that. Any combination with telomerase
inhibition would have to be threaded through JNJ’s needle. They will own not only a
first-in-class drug, but effectively theflholenflhmrttmgfidgejonceptitselfi and it truly is a
revolutionary concept. And that will not be lost on the market.
Q3 is almost over! Can you believe it? Our little GERN community is so resilient, and has been
so generous with each other in sharing information and incisive perspectives. I think we’re all so
fortunate to have had this amazing community to help navigate the chaos of the market. I must
say, our community has been right on the nose and we’ve seen the horizon long before the
market, and that’s pretty uncommon!
If GERN opts-in, there will be a $65 million milestone payment. Further and immediate
milestone payments will be made as the new trials progress. It’s highly probable that a regulatory
filing would be forthcoming within a year (I believe on the near-side of that year). With
approval, of course, GERN will receive royalty revenue, and that’s in addition to further sales
milestone payments.
Also, GERN must reimburse INJ for some of the costs in Imbark/Imerge. The cost structure for
the P3 in Imerge and possibly a P3 post-Imbark will be reduced from 50/50 to 20/80. If I recall
correctly, I believe the AML trial will also be split 20/80.
The development plan will inform their course of actions. Besides the reimbursement obligation,
if JNJ intends to pursue many indications then I would expect a further fund raising. If GERN
seeks to initiate any IDPs, or in the case of an acquisition by GERN, I would also expect fund
raising. That might mean loans and/0r dilutions. I think having the S3 could incline them to the
latter. Do put these dilutions into context, though; these would be dilutions aimed at expanding
the program (and hence growing revenue) and not dilutions aimed at debt service or simply
maintaining op~ex. These dilutions would be funds which are immediately available, whereas
the nature of milestone payments is that they are conditional and paid incrementally. In other
words, a dilution in this context means they’re creating value— more on this later.
I think they would need some time to digest what the development plan is and what IDPs they
might pursue. So I would expect those dilutions, if any, would occur within the first year, post-
continuation.
Furthermore, I would not be surprised if we saw a change in the board post—continuation. It may
be a milestone achievement for Imet but also the fulfillment of a personal achievement. With
JNJ having exclusive rights, and GERN being flush with royalty and milestone payments, I think
members of the board may feel they’ve successfully guided GERN into safe harbors; safe enough
that some may feel they’ve fulfilled their purpose.
Gauging GERN’s outlook post-continuation decision. Part 2 of 3.
How might the market interpret any subsequent fund raising and changes in the board? GERN
pre—continuation compared to post—continuation is a completely and categorically different
company. Post-continuation, GERN is a company transitioning from small-cap to mid-cap.
There are any number of comparisons here, and I think the glaring one, as far as near-term
prospects, is INCY. To date, the market had held GERN at arm’s length b/c of the inherent risk
in the one—candidate pipeline. Upon continuation, GERN is de—risked. By now, I think the data
and the scientific community’s enthusiasm and support make approval a near-certainty (not to
mention JN J ’5 continued support).
At that point, the market’s expectation for Imet will be very significant; and any changes in the
board should be easily rationalized and absorbed since the company will also be transitioning,
and any dilutions should be viewed as extremely positive. While GERN may initially be
compared to INCY, the fact of the matter is that Imet has a profile more similar to Imbruvica. I
mentioned previously that Imbruvica has some 20 indications approved and in clinicals; here, we
must consider the reality that Imet is a first—in—class telomerase inhibitor. It is a new—age drug,
the full potential of which is yet unmeasured. We know it works in blood, inter alia, and we
know theory takes Imet much, much deeper. If you’ve read the literature, or even my
breakdown/conclusion series, then you know combos are the future of Imet. And it will take
funds to realize those combos, You don’t get something for nothing, And the market will see
fund raising, whichever kind, in this context: growth.
I’ll liken Imet to the effect of the intemet on commerce; the depth of Imet’s potential is very
deep. We are just now in the incipient stages of introducing an entirely new class of drug. Let
that sink in a moment. Yes, that heady feeling you’re having, that’s the feeling of witnessing a
revolutionary treatment paradigm being established, a revolutionary theory turned to practice.
“Revolutionary” really is the apt word. And that’s what the market will anticipate. Upon
continuation and approval, those that had held GERN at arm’s length will be forced to reckon the
comprehensive significance of telomerase inhibition as an operational treatment paradigm.
Gauging GERN’s outlook post-continuation decision. Part 3 of 3.
Of course, there is the scenario of a buyout, in which case dilutions and board changes are out of
the equation, I think the buyout scenario has been played—out in everyone’s mind, and there’s
certainly no shortage of speculation. But let me color these speculations with the very stark
reality that a buyout doesn’t just mean INJ owns GERN, it means JNJ will own
telomerase inhibition categorically, the only manifest telomerase inhibition in the game for years
to come. I want to emphasize the significance of that. Any combination with telomerase
inhibition would have to be threaded through JNJ’s needle. They will own not only a
first-in-class drug, but effectively theflholenflhmrttmgfidgejonceptitselfi and it truly is a
revolutionary concept. And that will not be lost on the market.
Q3 is almost over! Can you believe it? Our little GERN community is so resilient, and has been
so generous with each other in sharing information and incisive perspectives. I think we’re all so
fortunate to have had this amazing community to help navigate the chaos of the market. I must
say, our community has been right on the nose and we’ve seen the horizon long before the
market, and that’s pretty uncommon!