Geron Corporation Announces Up to $375 Million in Funding with Royalty Pharma and Pharmakon Advisors

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FOSTER CITY, Calif.– Geron Corporation (Nasdaq: GERN), a commercial-stage biopharmaceutical company aiming to change lives by changing the course of blood cancer, today announced up to $375 million in synthetic royalty and debt financings with Royalty Pharma and investment funds managed by Pharmakon Advisors, LP, of which $250 million in cash was provided at closing and another $125 million in debt is available. The transactions are comprised of a $125 million synthetic royalty with Royalty Pharma and $250 million of committed senior secured debt with investment funds managed by Pharmakon Advisors, LP.

“The substantial financial commitment of exceptional long-term partners like Royalty Pharma and Pharmakon Advisors strengthens our cash position and further solidifies our balance sheet, while providing flexibility to invest in our future,” said Michelle Robertson, Geron’s Executive Vice President, Chief Financial Officer. “We believe that the terms reflect the significant commercial potential of RYTELO. The proceeds are expected to enable us to support the commercial launch of RYTELO in the U.S. and potential launch in the EU, complete our Phase 3 IMpactMF trial in relapsed/refractory myelofibrosis, invest in supply chain redundancy for RYTELO, and our general working capital requirements.”

Royalty Pharma has provided $125 million at closing and will receive tiered royalty payments on U.S. net sales of RYTELO, ranging from 7.75% of annual net sales up to $500 million, 3.0% of annual net sales between $500 million and $1.0 billion, and 1.0% of annual net sales over $1 billion. Payments to Royalty Pharma will cease if the aggregate royalties payable through June 30, 2031, reach a multiple of 1.65 its investment, otherwise the royalty payments will continue until Royalty Pharma receives a multiple of 2.0 its investment. There are no other royalties payable on RYTELO, which was developed internally and is exclusively owned by Geron.

“RYTELO is an important therapy for the lower-risk MDS patient population, whom otherwise have limited options, and we look forward to its development in other hematologic malignancy indications. We are delighted to establish this partnership with Geron to help fuel their execution of significant commercial and development opportunities ahead,” said Pablo Legorreta, founder and Chief Executive Officer of Royalty Pharma.

Investment funds managed by Pharmakon Advisors, LP have committed to a 5-year, senior secured term loan of up to $250 million, of which a first tranche of $125 million has been drawn at closing. A portion of these proceeds were used to fully repay amounts owned under the Company’s existing loan with Hercules Capital, Inc. and Silicon Valley Bank ($86.5 million), which has been terminated. A second tranche of $75 million can be drawn at Geron’s option, subject to certain limited conditions, and a third tranche of $50 million can be drawn at Geron’s option upon reaching a specified RYTELO revenue milestone, in each case if requested prior to December 31, 2025. The facility contains no scheduled amortization payments, with all outstanding principal due at maturity in 2029, and there are no financial covenants. The loans bear interest at a variable rate per year equal to 5.75% plus the three-month Secured Overnight Financing Rate (SOFR), subject to a SOFR floor of 3.00%.

“The Geron team is driving commercial success in the U.S. with RYTELO, an innovative first-in-class telomerase inhibitor, and we look forward to supporting the company and management team as they plan for a potential launch in the EU and continue to develop the asset in additional hematologic malignancies,” said Pedro Gonzalez de Cosio, Chief Executive Officer of Pharmakon Advisors, LP.

TD Cowen served as financial advisor and Cooley LLP served as legal advisor to Geron. Goodwin Procter and Fenwick & West LLP served as legal advisors to Royalty Pharma and Akin Gump LLP served as legal advisor to Pharmakon Advisors, LP.