Earnings Call Transcript - GERN Q4 2020

Operator, Operator

Thank you for your patience and welcome to the Fourth Quarter 2020 Geron Earnings Conference Call. I will now turn the call over to Olivia Bloom, Geron's Chief Financial Officer. Please proceed, Olivia.

Olivia Bloom, CFO

Thank you, Erica, and good afternoon, everyone. Thank you for joining us for today's conference call. I'm joined today by Dr. John Scarlett, Geron's Chairman and Chief Executive Officer; and Aleksandra Rizo, our Chief Medical Officer. After the market close today, we announced our fourth quarter and year-end 2020 financial results and operational highlights via press release, which is available on our website under geron.com/investors. In addition, a live webcast of this call is available on our website, and an archive will be available for 30 days. Before we begin, please note that this presentation and question-and-answer session will contain forward-looking statements relating to Geron's plans, expectations, timelines, beliefs, statements of potentiality, and projections. These include, without limitation, those regarding the expected timelines for the completion of enrollment and the results from the IMerge Phase III and IMpactMF clinical trials and submission of an NDA; the potential for positive outcomes from IMerge Phase III and IMpactMF; potential approval of imetelstat by regulatory authorities and commercialization of imetelstat; the expectation that Geron's current financial resources will be sufficient to fund its operations until the end of 2022; and that imetelstat has the potential to be disease-modifying and alter the course of MDS and MF. These and other forward-looking statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. These risks and uncertainties include, without limitations, those regarding that the company may be unable to overcome all the enrollment, clinical, safety, efficacy, technical, scientific, operational, manufacturing, and regulatory challenges to meet the expected timeline for IMerge Phase III and IMpactMF due to COVID or otherwise; that in the Phase III clinical trial, imetelstat may not prove to be as safe or efficacious as in the Phase II trial and may not demonstrate that it is safe, efficacious, and disease modifying; that regulatory authorities may not permit the further development of imetelstat on a timely basis or at all and may not approve it for commercialization; and that Geron may need additional financial resources before the end of 2022 for the development and commercialization of imetelstat. Detailed information on the above risks and uncertainties and additional risks, uncertainties, and factors that could cause actual results to differ materially from those in the forward-looking statements are explained under the heading Risk Factors in Geron's annual report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking statements which speak only as of the date they are made, and the facts and assumptions underlying the forward-looking statements may change. On today's call, Dr. Scarlett will make a few introductory comments, after which, I will cover the fourth quarter and year-end financial results as well as guidance for 2021. Dr. Rizo will provide a clinical development update on the ongoing IMerge Phase III trial in our target patient population with low or Intermediate-1 risk myelodysplastic syndrome, which we call low-risk MDS, who are transfusion-dependent non-del(5q) and relapsed after or refractory to prior treatment with an erythropoiesis-stimulating agent or ESA. She will also provide an update on our IMpactMF Phase III trial, which is in a population of patients with intermediate to high-risk myelofibrosis who are refractory to prior treatment with a JAK inhibitor, which we call refractory MF. Aleksandra will also discuss how the data and analyses we reported at the American Society of Hematology Annual Meeting in December 2020 have deepened our understanding of imetelstat's mechanism of action and its effect on the underlying cause of the disease and the indications we're pursuing. Dr. Scarlett will then comment on the evolving lower-risk MDS and MF market and imetelstat's positioning in those markets given its potentially highly differentiated product profile. He'll finish the call with closing remarks on planned milestones for 2021. I'll now turn the call over to Dr. Scarlett, Geron's Chairman and CEO.

John Scarlett, CEO

Thank you, Olivia. I want to welcome everyone to our fourth quarter and year-end 2020 conference call. I'll begin by outlining our vision for Geron, which is to lead in the treatment of hematologic malignancies by altering the progression of these diseases to improve and extend patients' lives. Reflecting on 2020, we made notable strides towards this vision. We revealed compelling and distinctive data from our IMerge Phase II lower-risk MDS trial, which demonstrated high rates and remarkable durability of transfusion independence. The 20-month minimum duration of transfusion independence in IMerge Phase II was the longest reported to date for non-del(5q) lower-risk MDS patients who relapsed and were resistant to ESAs. In our IMerge Phase III lower-risk MDS study, we recorded continued enrollment gains, achieving over 50% enrollment by the year's end. We also shared outstanding overall survival data from our IMbark Phase II trial involving JAK-inhibitor relapsed or refractory MF patients. In this trial, patients treated with imetelstat achieved a median overall survival of 28 months, nearly double the median overall survival reported in the literature. After technical discussions and consulting with the FDA, we launched IMpactMF, our Phase III trial for JAK-inhibitor refractory MF patients. IMpactMF is the first and currently the only Phase III trial with overall survival as the primary endpoint. We also showcased strong disease-modifying effects in low-risk MDS and relapsed/refractory MF. In both cases, we observed reductions in key mutations driving the disease. Moreover, imetelstat is the only drug under development that has established a correlation between these and other measures of disease modification with critical clinical outcomes, including longevity of transfusion independence in low-risk MDS and improvements in MF. These correlations provide us with heightened confidence in potential positive outcomes from our ongoing Phase III IMpactMF trials. Beyond these achievements, we successfully set up our global imetelstat supply chain, ensuring a consistent drug supply for clinical trials and allowing the inclusion of Geron manufactured materials in our two Phase III trials. We also raised over $175 million in new capital through an underwritten public offering and a new loan facility, which we anticipate will be sufficient to fund our operations until the end of 2022. All these accomplishments were realized despite the challenges posed by the ongoing effects of COVID. Currently, we have achieved 65% enrollment. However, due to the pandemic, ongoing enrollment remains challenging, primarily because of patients' hesitance to participate in clinical trials and delays in the opening of new sites. These pandemic-related effects seem to affect many oncology trials, not just ours. Furthermore, we believe the enrollment in IMerge Phase III might be influenced by the increased availability of luspatercept for patients who are RS+ in lower-risk MDS. Based on our observations, the enrollment challenges in this trial do not stem from a lack of prioritization from investigators. Conversations with them show they are enthusiastic about our imetelstat data and committed to enrolling their patients in this trial. At this time, we expect IMerge Phase III to reach full enrollment in the second half of 2021. Depending on when that full enrollment occurs, we anticipate top-line results from IMerge Phase III to be available between the end of 2022 and the first half of 2023. Aleksandra will provide further details on our initiatives to enhance enrollment amid the pandemic and update on our activities related to IMpactMF. We currently project the interim analysis for IMpactMF to take place in 2024 and the final analysis in 2025. Looking forward, our strategic priorities for the next three years will be discussed.

Olivia Bloom, CFO

Chip?

John Scarlett, CEO

And commercially launching this highly differentiated drug in low-risk MDS. Now I'd like to hand the call over.

Olivia Bloom, CFO

I'm sorry. You were breaking up a bit just back there just right before for Aleksandra?

John Scarlett, CEO

Okay. So we currently expect the interim analysis for IMpactMF to occur in 2024 and the final analysis to occur in 2025. Looking ahead, our planned strategic priorities for the next three years include achieving top line results in IMerge Phase III, gaining regulatory approval of imetelstat and commercially launching this highly differentiated drug in lower-risk MDS. Now I'd like to hand the call over to Olivia to discuss our fourth quarter and year-end financial results and financial guidance for 2021. Olivia?

Olivia Bloom, CFO

Thank you, John. As of December 31, 2020, we had approximately $260 million in cash, cash equivalents and current and noncurrent marketable securities. Our cash position reflects net proceeds of approximately $140 million from a public offering in May 2020 and approximately $24 million in initial net proceeds from a nondilutive $75 million loan facility that we closed at the end of the third quarter last year. Based on current planning assumptions, we estimate our current financial resources to be sufficient for our operations until the end of 2022. Overall, the financial results for the fourth quarter and year-to-date period were in line with our expectations and our operating expense guidance. Operating expenses for the three and twelve months ended December 31, 2020, were generally higher in comparison to the same period in 2019, due to headcount increases in 2019 and 2020 across the company, increased activity for the IMerge Phase III clinical trial in low-risk MDS, start-up activities for the IMpactMF Phase III clinical trial in refractory MF and costs associated with ongoing imetelstat manufacturing. These increased costs were partially offset by lower costs related to purchases of raw materials, drug substance and drug products and completion of the IMbark clinical trial. Regarding financial guidance for 2021, we expect our operating expense burn to range from $108 million to $112 million, which includes costs for our two ongoing Phase III clinical trials, production of validation batches of imetelstat at contract manufacturers to enable future production of imetelstat for clinical and commercial purposes, and preparatory activities for NDA and commercial readiness. Financial guidance is based on a set of assumptions at a point in time, and if the company's plans change, causing assumptions to be revised, then we will update guidance at that time. With that, I will now turn the call over to Aleksandra to provide an update on our Phase III clinical development activity. Aleksandra?

Aleksandra Rizo, Chief Medical Officer

Thanks, Olivia. Good afternoon, everyone. As Chip mentioned, we have achieved 65% enrollment in our IMerge Phase III trial. The independent data monitoring committee met in December and recommended that the trial continue as planned. We anticipate that the enrollment efforts we initiated last year will gain momentum as COVID cases decrease and clinical operations normalize over the coming months. Consequently, we believe the clinical science liaisons we brought on board early last year will interact with clinical sites more easily and frequently, helping to inform site personnel and patients about the benefits of participating in the IMerge Phase III trial. Additionally, our social media campaign should assist in boosting patient recruitment. We expect that the approximately 20 new sites for IMerge will open over the next few months, raising the total to around 120. The most significant increase in enrollment will likely come as vaccinations progress, COVID cases decline, and patients become more at ease returning to participate in clinical trials. Earlier in this call, Chip highlighted the promising clinical data from our IMerge Phase II trial in low-risk MDS, which I would like to elaborate on briefly. These findings are very promising, and we continue to differentiate imetelstat from other approved or investigational treatments. Notably, imetelstat demonstrates exceptional durability for transfusion independence. Of the patients, 42% achieved the primary endpoint of 8-week transfusion independence, while 32% were transfusion-free for 24 weeks, a crucial secondary endpoint. Furthermore, 29% of patients were transfusion-free for over a year, with a median duration of transfusion independence of 20 months. This is a stark contrast to the most recent available data that reported a median duration of transfusion independence of 7 months. I also want to highlight that these results come from a patient population with a significant baseline transfusion burden, and the results were consistent for both RS- and RS+ patients. We expect similar results in our IMerge Phase III trial. We believe imetelstat will be a highly differentiated and competitive treatment option for the lower-risk MDS patient population. Moving on to myelofibrosis, Chip mentioned that in the IMbark Phase II trial, the median overall survival was 28 months, which is favorably compared to the median OS of 13 to 16 months found in the literature. The median OS also compares well to the observed real-world data of 12 months for relapsed/refractory MF patients who received the best available therapy, carefully matched with our imetelstat-treated patients in IMbark. Besides overall survival, patients in IMbark benefited from significant clinical improvements, including symptom relief, spleen volume reduction, and bone marrow fibrosis enhancement. These benefits correlate with the overall survival improvements. Based on this data and after discussions with the FDA, we launched IMpactMF in December, which is one quarter ahead of schedule. The IMpactMF trial is the first and only Phase III trial for MF with overall survival as the primary endpoint, marking a key differentiator from other late-stage drugs for this patient population. The same enrollment dynamics affecting IMerge Phase III are also relevant for IMpactMF, compounded by the initiation of several other clinical trials in MF that will compete for patients. We are implementing enrollment strategies for IMpactMF that mirror those in IMerge Phase III, including expanding the number of countries and sites, engaging more clinical science liaisons, and executing a social media campaign. We currently anticipate that IMpactMF will reach full enrollment in 2024, with the interim analysis potentially occurring in 2024 and the final analysis in 2025. To elaborate on this timeline, the interim analysis is based on the primary endpoint of overall survival, meaning its timing will rely on achieving a specific number of test events. These events will accumulate during the enrollment phase, and it is possible that the required number of events for the interim analysis could happen before enrollment concludes. Lastly, I want to point out that we are reporting critical data related to the mechanism of action of imetelstat that may explain its remarkable disease-modifying effects observed in our Phase II trials for low-risk MDS and MF. In low-risk MDS patients, we have noted reductions in key driver mutations and depletion of cytogenetic abnormalities at a molecular level, indicating that imetelstat targets and kills malignant stem and progenitor cells by affecting telomeres. These molecular findings correlate with clinically meaningful benefits of transfusion independence, really highlighting the disease-modifying potential of imetelstat. In IMbark, we also observed significant dose-dependent reductions in the mutation burden of key mutations associated with MF and improvements in bone marrow fibrosis. These findings again correlate with the better overall survival results from the IMbark trial, reinforcing the evidence of imetelstat's disease-modifying activity. We believe that the clinical benefits of sustainable transfusion independence in low-risk MDS and improved overall survival in MF, along with the accompanying molecular data and their correlations, underscore the significance of imetelstat's unique mechanism of action and provide strong evidence for its efficacy in altering disease progression. Therefore, we have increased confidence in our potential success in both the IMerge Phase III and IMpactMF trials. Now, I’ll turn the call back to Chip for an overview of the current MDS and MF markets. Chip?

John Scarlett, CEO

Chip, we cannot hear you. There's something with your line? Let's try it again. Thanks, Aleksandra. Historically, there have been few new treatments for hematologic malignancies, especially myeloid malignancies. However, in 2020, we saw a new approval for luspatercept in low-risk MDS and several new approaches being tested for MF, including many combination therapies. First, let's discuss last year's approval of luspatercept, trade named REBLOZYL, in low-risk MDS. This approval took place in April 2020 based on a Phase III trial in non-del(5q) lower-risk MDS patients who are relapsed or refractory to ESAs and naive to HMAs. This trial enrolled only RS+ patients. The launch of REBLOZYL by Celgene and BMS appears to be strong, which validates the high unmet need and the market potential for these RS+ lower-risk MDS patients. We expect a highly differentiated profile for imetelstat at launch in the lower-risk MDS market. In the patient population of our IMerge Phase II trial that we targeted, as described by Aleksandra, we've seen clinically meaningful transfusion independence across multiple MDS subtypes, including both RS+ as well as RS- patients, low and high transfusion burdened patients in patients with low and high EPO levels. Because of this differentiated and advantageous profile, we continue to expect imetelstat to play a significant role for this lower-risk MDS patient population. For the MF landscape, Jakafi, ruxolitinib, remains the primary frontline treatment. Although the number of investigational treatments, including combination therapies, has increased over time, these treatments are either another JAK inhibitor or a combination with a JAK inhibitor. They continue to be focused on spleen symptom improvement or anemia improvement. These are certainly helpful but do not address the fundamental problem of continued disease progression in these patients, which results in dismal survival. Eventually, the majority of MF patients are or become nonresponsive to a JAK inhibitor. As such, there remains a key unmet need for overall survival in JAK inhibitor nonresponsive patients. As the only therapy in development that is not a JAK inhibitor or used in combination with a JAK inhibitor, imetelstat has a clearly differentiated profile due to its potential to extend the lives of patients who either are or have become nonresponsive to a JAK inhibitor. Next, I'd like to say a few words on our pre-commercial planning and activities. With top line results expected to be available from the end of 2022 to the first half of 2023, and assuming the results of IMerge Phase III are supportive, we plan to submit the completed NDA in 2023. In planning for those events on that timeline, in 2021, we've begun NDA readiness activities for imetelstat and lower-risk MDS. That includes starting long lead time activities to validate drug substance and drug product manufacturing processes that are needed to meet standards for regulatory approval and to enable the future commercial production of imetelstat. We'll also begin drafting nonclinical content through the application this year. In addition, we'll invest in building the appropriate infrastructure to support a high-growth commercial stage company. Other 2021 preliminary commercial activities include preparing the market by increasing awareness of imetelstat's differentiated profile and building our commercial team and internal infrastructure to support commercialization. However, spending on our commercial launch plan is stage-gated to positive top line results in IMerge. In conclusion, before opening the call to questions, I'd like to reiterate our commitment to Geron's vision of being recognized as a leader in the treatment of hematologic malignancies. In support of that vision, in 2021, our plan is to complete enrollment in the IMerge Phase III trial, advance clinical site initiation and patient enrollment in the IMpactMF trial, present further data and analyses from the Phase II IMerge trial at medical conferences and begin the NDA and commercial readiness activities I just described. We have a strong team in place that has the expertise to advance imetelstat development and transition to the commercial stage, and having the financial resources to support our plans, we strongly believe our efforts will help establish Geron as a leader in hematologic malignancies, thus creating long-term shareholder value. And with that, we'd now like to answer your questions. So I'll turn the call back over to the operator.

Operator, Operator

We’ll take our first question from Chad Messer with Needham.

Chad Messer, Analyst

I just start with a little bit of drill down on COVID impact, everything you said about patients and sites obviously makes a lot of sense what's going on in the world today. But in your prepared remarks, Chip, you talked a little bit about the primary problem kind of being patients showing up for sites. And then in the press release, there's some additional discussions about site personnel, I guess, site personnel. I was wondering to what extent these two things are playing off relative to each other? I mean to me, and maybe I'm naive, it seems the patient interest in showing up is the most obvious to normalize with COVID and that site things may be more complicated, I could even be wrong about that. But just wondering if you could give a little bit more insight on the relative impact of those two things, which are both, in my mind, logically impacted by COVID.

John Scarlett, CEO

Yes. That's a really perceptive question. Thanks, Chad. I think I'm going to turn it over to Aleksandra, who's certainly the closest of all the people on the call to the question. She's in rather constant contact with these sites and our team is, of course. So Aleksandra, maybe you'd like to comment on these two different variables that Chad brought up.

Aleksandra Rizo, Chief Medical Officer

Sure. Thanks for the question, Chad. You're absolutely right. The two main issues we're encountering are the reluctance of patients to participate in clinical trials, which often require more frequent hospital visits than they prefer during COVID, and the availability of site personnel, who are occupied maintaining trials that involve multiple procedures during this time. It's really a combination of these two factors. We anticipate that as the COVID pandemic subsides and vaccination rates increase, patients will feel more comfortable returning to the clinic and participating in trials. Those are the two primary reasons for our current situation.

Chad Messer, Analyst

Okay. Yes. That makes a lot of sense. I definitely have a comment, and maybe there's a question in there. It's really interesting, especially when we hear about your ASH data and the justification of overall survival based on what you've observed. I understand it's a single-arm study, so perhaps the justification will come from validating it in that context. However, regarding spleen volume and symptom scores, I think these metrics should demonstrate their value in terms of overall survival. That was my comment. Now, about the question — you touched on this a bit, but could you elaborate more? I know myelofibrosis is a unique disease with specific endpoints for JAK inhibitors and other standard treatments, but why is it necessary to put in so much effort to convince people that the overall survival benefit is important?

John Scarlett, CEO

I will address the first part, and then I believe Aleksandra will want to add her thoughts. We do not feel the need to justify the OS benefit; it seems clear and obvious. It’s important to note that we are the only drug currently engaged in a Phase III trial that will use OS as an outcome, which requires courage since these are long trials with a large number of patients. This approach breaks the norm, as most studies just perform a landmark analysis after a set number of months on a combination treatment, typically involving a JAK inhibitor. However, they often miss the true benefits of altering the disease's progression. We believe that understanding these changes is the key takeaway and the significant advantage of our drug. No other company has data comparable to ours in this aspect. That's why we focus on OS more than anyone else, as we have observed correlations between disease progression, both clinically and molecularly, with actual improvements in OS from our Phase II study. I hope that clarifies our position. Aleksandra, is there anything else you’d like to add? Chad, feel free to jump back in as well.

Operator, Operator

Your next question is from Justin Walsh with B. Riley Securities.

Justin Walsh, Analyst

Can you provide any color on feedback that you've received from your initial marketing research and outreach efforts? How either are MDS versus MF physicians and patients for new treatment options? And how they reacted to imetelstat's profile?

John Scarlett, CEO

I'm going to let Aleksandra discuss the individual physicians we've talked to. We've conducted market research and are planning further research to delve into these points, Justin. The benefits of MDS are quite clear to many physicians, especially those treating sicker patients. All our patients face significant transfusion burdens, which can be challenging for these physicians. They have adopted or are beginning to adopt luspatercept, which we find promising since there hasn't been anything new since the HMAs over a decade ago. The rapid uptake of luspatercept has been positive, but there is still ample opportunity for a drug like imetelstat that offers multiple advantages. Firstly, we treat both RS- and RS+ patients; secondly, we can manage patients with very high baseline transfusion burdens and achieve excellent results; and thirdly, the durability of imetelstat's effectiveness in these patients is significantly higher than anything reported from studies on luspatercept. These factors contribute to the observed decreases in SF3B1 and reductions in cytogenetic abnormalities, indicating we have disease-modifying activity. While I won't compare imetelstat to other products in low-risk MDS, these differentiating factors are substantial. Aleksandra, would you like to discuss the specifics of interacting with investigators and KOLs, as you're closely connected to several key resources?

Aleksandra Rizo, Chief Medical Officer

Sure, I can address that. We are in close communication with participating principal investigators as well as key opinion leaders. I want to emphasize the strong enthusiasm for a drug that is effective across various subtypes of low-risk MDS. This is beneficial because it simplifies the clinical workflow for these professionals, as they do not need to determine whether a patient is RS+ or RS-. Before REBLOZYL's approval, subtyping for RS positivity was not part of our process. This convenience is significant. Additionally, having a durability of 20 months compared to 7 months for our currently approved drug offers another advantage for patients. It reduces the need for frequent clinic visits for transfusions, which they were accustomed to before receiving treatment. Furthermore, a major factor that excites investigators is the molecular data. This was a key reason for the paper’s publication in JCO. The decrease in not just SF3B1, but multiple mutations and a reduction in cytogenetic abnormalities among patients strengthens the belief among our key opinion leaders and principal investigators that imetelstat is changing the disease's trajectory in low-risk MDS patients. The same applies to myelofibrosis; the molecular data are equally compelling here. Regarding overall survival, data is progressing and regulatory agencies are increasingly open to different endpoints. Initially, we focused on SVR since Jakafi had been available for a long time. With new data and compounds demonstrating improvements in anemia and symptoms, we have established new endpoints, including OS. This is viewed as the ultimate goal of any clinical trial. Although the current enthusiasm is based on data from two different doses of imetelstat, we have not yet established OS as a justified endpoint for our investigators or regulators. We remain optimistic despite the challenges posed by the duration of the study and the different endpoint, and we see no reason to doubt the data.

Justin Walsh, Analyst

That's very helpful. Maybe just a quick follow-up to that. So one, could you maybe quickly just remind us of how many of the low-risk MDS patients are RS+ positive versus RS-? And do you think that there could be potential for patients to use luspatercept and imetelstat in sequence if they fail therapy with one or the other?

Aleksandra Rizo, Chief Medical Officer

So typically, the numbers for RS+ patients in the literature range anywhere from 10% to 25%, depending on the study. Let's say most, if one-quarter of the patients are RS+, meaning a significant number of patients are RS-. As we've discussed multiple times, we work across both subtypes. That was one quick question. Can you remind me what the second part of your question was?

Justin Walsh, Analyst

Yes. Is there a potential to use luspatercept from subtyping treatment?

Aleksandra Rizo, Chief Medical Officer

So for RS+ patients, right, potentially, right, but for patients that are heavily transfused, no, I really don't know, right, what would be the clinical preference, I would say.

Operator, Operator

Your next question is from Stephen Willey with Stifel.

Stephen Willey, Analyst

So maybe just with respect to the IMpactMF guidance. So I'm just kind of curious as to there's obviously a lot of competitive happenings within the space. And I'm just kind of curious as to how the guidance if at all contemplates the competitive environment in terms of competition for some of these post-RUX patients? I guess specifically just given the number of trials we're kind of seeing within that setting.

Aleksandra Rizo, Chief Medical Officer

Yes. That's a great question, Steve. I mean just since we announced the study, there had been three new Phase III trials in MF, right, that had been started. So competition is really high. For us, at this moment, it's difficult to give a very precise guideline. But as you can imagine, we have conducted a study feasibility. And that visibility takes into account COVID as well as competitive trials. So based on the current knowledge we have, our current planning assumptions are that we will reach the full enrollment in 2024, which is a different guidance than what we've given so far.

Stephen Willey, Analyst

Okay. And then maybe just going back to IMerge for a minute. And Chip, you had made the comment with respect to luspatercept availability potentially impacting patient enrollment into the study. So is there a scenario whereby IMerge maybe ends up representing kind of over enrichment of RS- patients? And do you think that there is any potential labeling or unifications as a result of that? I'm just kind of curious to get your opinion there. And just whether or not you have kind of real-time insight into the baseline characteristics of patients that are coming into the study if that's something that you're seeing?

John Scarlett, CEO

Again, I think Aleks is in the best position to answer those questions. Go ahead.

Aleksandra Rizo, Chief Medical Officer

Yes. I'll begin with the last question, Steve. We do not have insight into the types of patients being enrolled in the study since it is a double-blind, placebo-controlled study. It is therefore impossible to comment on or know the patient demographics. Regarding your first question about whether the approval of luspatercept might affect our enrollment of RS+ or RS- patients, I don't believe it will have an impact. Luspatercept has just been approved and will likely be given to RS+ patients, while RS- patients would be treated differently. I honestly do not think we will have to choose between different patient populations, and I don't foresee any issues with the current labeling.

John Scarlett, CEO

Steve, I think we should highlight that when we speak with investigators, their perspectives on these drugs are quite different. The effects of imetelstat in patients with a high transfusion burden, particularly those receiving more than 4 units and especially over 6 units, are significantly distinct when comparing Phase II to Phase III for the two drugs. There are likely many different ways to analyze this. I agree with Aleksandra; I think we may be surprised to observe a significant enrichment of one RS+ versus RS-. However, we do not know yet, and we will see.

Aleksandra Rizo, Chief Medical Officer

I just want to respond to what you were saying, Steve. We included about 50% of our trial participants before luspatercept became available or reimbursed in European countries, where most of our sites are located. Therefore, I believe we have a sufficient number of patients that are both RS+ and RS-.

Operator, Operator

Your next question is from Tom Shrader with BTIG.

Thomas Shrader, Analyst

You kind of just talked about my question, but you see no reason to stratify for RS+ versus RS-. Kind of Chip, to your point that these patients either physicians would know are going to get almost nothing out of luspatercept or probably did get almost nothing out of luspatercept. Is that accurate? And you just don't think it confounds your study much?

John Scarlett, CEO

I believe the question is whether we're analyzing RS+ versus RS- groups. In this case, we're not stratifying during the randomization process. While we will examine the effects of subtypes, we're not giving preferential treatment to a specific group. It's important to note that we don't fully understand why luspatercept has this significant effect, which is why Acceleron and Celgene focused their initial Phase III trial, MEDALIST, on RS+. However, our data suggests that whether a patient is RS+ or RS-, the results are quite similar. That is the key takeaway for us, and we anticipate showing equally positive outcomes in both groups.

Thomas Shrader, Analyst

Okay. And then there's an interesting comment about a reasonable R&D build going forward. Are you still looking for a way forward in AML? Is that still on the table? Are you searching for a subgroup that makes a lot of sense? Or am I misinterpreting?

John Scarlett, CEO

Yes, I mean let's just say this. I don't know that the R&D build necessarily reflects that. But what it does reflect is a developing organization for a drug that will enter the market in the coming years. We believe it has a very unique mechanism of action along with properties and capabilities not found in other products. It would be unwise not to take advantage of that. I think that's the main point. We aren't ready to discuss specifics about the next indication, its timeline, costs, or the number of people needed to support it. However, we are very focused on the entire range of hematologic malignancies and are interested in expanding beyond just low-risk MDS and MF, as well as relapsed/refractory MF. You can be sure that we have a strong interest in this area, but we will need a bit more time before we can provide the detailed commentary you're looking for, Tom.

Operator, Operator

This concludes our Q&A session. I will now turn the call back over to Dr. Scarlett for closing remarks.

John Scarlett, CEO

Well, thanks a lot. That was a very spirited discussion, which I think we really appreciate and thank everyone who participated. We thank all the people who listened to the call, and we hope you have a good rest of this week and onward. And we will talk to you again truly at the next quarterly earnings call. Thank you all very much for participating. Bye-bye.

Operator, Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.