1 Consolidated Amended Class Action Complaint 09/19/2014

Case3:14-cv-01224-CRB Document45 Filed09/19/14 Page1 of 86

1 David E. Bower SBN 119546 FARUQI & FARUQI, LLP

2 10866 Wilshire Boulevard, Suite 1470 Los Angeles, CA 90024

3 Telephone: 424-256-2884 Facsimile: 424-256-2885

4 Email: [email protected]

5 Richard W. Gonnello (pro hac vice)

6 Megan M. Sullivan (pro hac vice) FARUQI & FARUQI, LLP

7 369 Lexington Avenue, 10th Floor New York, NY 10017

8 Telephone: 212-983-9330 Facsimile: 212-983-9331

9 Email: [email protected] [email protected]

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11 Attorneys for Lead Plaintiff

12 UNITED STATES DISTRICT COURT

13 NORTHERN DISTRICT OF CALIFORNIA

14 CA NO. 3:14-CV-01224 (CRB)

15 In re: GERON CORPORATION SECURITIES LITIGATION

CONSOLIDATED AMENDED 16 CLASS ACTION COMPLAINT

17 This Document Relates To: All Actions

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28 CONSOLIDATED AMENDED CLASS ACTION COMPLAINT

CA NO. 3:14-CV-01224 (CRB)


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TABLE OF CONTENTS

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NATUREOF ACTION .................................................................................................................. 1

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JURISDICTIONAND VENUE ..................................................................................................... 5

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PARTIES........................................................................................................................................ 5

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BACKGROUND............................................................................................................................ 8

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ClinicalTrial Protocols ....................................................................................................... 8

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Hepatotoxicity and Drug Induced Liver Injury .................................................................. 9

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Geronand Imetelstat ......................................................................................................... 13

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Geron Downsizes To Develop Imetelstat Exclusively ..................................................... 14

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Geron’s Phase 2 Trial of Imetelstat in Patients with Essential Thrombocythemia or PolycythemiaVera ............................................................................................................ 16

11 The Pilot Clinical Trial of Imetelstat in Patients with Primary or Secondary

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Myelofibrosis.................................................................................................................... 24

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Geron’s January 2014 Stock Offering .............................................................................. 26

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The FDA’s Clinical Holds ................................................................................................ 26

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CLASS PERIOD STATEMENTS................................................................................................28

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POST CLASS PERIOD EVENTS ............................................................................................... 60

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ADDITIONAL SCIENTER ALLEGATIONS ............................................................................. 70

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LOSSCAUSATION ..................................................................................................................... 73

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CONTROL PERSON LIABILITY............................................................................................... 74

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APPLICABILITY OF THE FRAUD ON THE MARKET DOCTRINE ..................................... 75

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THE AFFILIATED UTE PRESUMPTION ................................................................................. 76

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NOSAFE HARBOR .................................................................................................................... 76

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CLASS ACTION ALLEGATIONS ............................................................................................. 77

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COUNTI ...................................................................................................................................... 78

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COUNTII ..................................................................................................................................... 80

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PRAYER FOR RELIEF ............................................................................................................... 81

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JURYTRIAL DEMAND ............................................................................................................. 82

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CONSOLIDATED AMENDED CLASS ACTION COMPLAINT CA NO. 3:14-CV-01224 (CRB)


GLOSSARY

2

Alanine Transaminase (“ALT”)

A transaminase enzyme mainly found in the liver that

3 catalyzes the two parts of the alanine cycle.

A hydrolase enzyme related to the bile ducts that is particularly concentrated in liver, bile duct, kidney, bone, and the placenta.

Aspartate Transaminase (“AST”) A transaminase enzyme found in the liver, the heart, and other muscles in the body that is important to amino acid metabolism.

Bilirubin A yellowish pigment found in bile that is formed from the breakdown of normal red blood cell. It becomes increased when too much is being produced or less is being removed due to bile duct obstructions or impaired processing.

Cholestasis

A reduction or stoppage of bile flow causing bilirubin to accumulate in the blood stream.

Cirrhosis A late stage of scarring (fibrosis) of the liver caused by many forms of liver diseases and conditions, such as hepatitis and chronic alcohol abuse.

Esophageal Variceal Bleeding

Bleeding of veins in the esophagus that occurs when the veins in the portal system expand and thin to accommodate for blocked blood flow through a damaged liver. Often caused by cirrhosis.

Essential Thrombocythemia

A rare chronic blood disorder characterized by (“ET”)

the overproduction of platelets by megakaryocytes in the bone marrow.

Gamma-glutamyl Transferase

An enzyme found mainly in liver cells that is useful to help determine the cause of an elevated ALP.

Hematologic

Concerning the blood, blood-forming organs, and blood diseases.

Hematologic Myeloid

Tumors that affect blood, bone marrow, and lymph nodes.

Malignancies

Hepatic Encephalopathy The loss of brain function, including confusion, altered consciousness, and coma that may ultimately lead to death, that occurs when the liver is unable to remove toxins from the blood.

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Hepatocellular Injury

Hepatotoxicity

Damage to the Hepatocyte cells in the liver.

Impaired liver function caused by exposure to a drug or chemical agent.

ii CONSOLIDATED AMENDED CLASS ACTION COMPLAINT

CA NO. 3:14-CV-01224 (CRB)

4 Alkaline Phosphatase (“ALP”)

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2 I Hyperbilirubinemia

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4 Liver Function Test (“LFT”)

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I Myeloproliferative Neoplasms

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7 I Myelosuppression

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9 I Neutropenia

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11 I Polycythemia Vera (“PV”)

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I Progenitor Cell

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14 I Telomerase

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16 I Telomere

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19 Thrombocytopenia

20 Total Bilirubin Levels (“TBL”)

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An abnormally high concentration of bilirubin in the blood. Most often associated with liver disease, biliary destruction, or an excessive destruction of red blood cells.

Blood tests that measure the levels of certain enzymes and proteins in the blood.

A type of disease in which the bone marrow makes too many red blood cells, white blood cells, or platelets.

A condition in which bone marrow activity is decreased, resulting in fewer red blood cells, white blood cells, and platelets.

An abnormally low count of neutrophils, a type of white blood cell that helps fight off infections, particularly those caused by bacteria and fungi.

A slow-growing type of blood cancer characterized by the overproduction of red blood cells in the bone marrow.

A biological cell with the capability of differentiating into several different cell types as needed. They are related to stem cells, but have more limited functions than stem cells.

An enzyme that enables cancer cells to maintain telomere length, which provides them with the capacity for limitless cellular replication.

Repetitions of a DNA sequence located at the ends of chromosomes that act as protective caps to maintain the integrity of the chromosome.

A low blood platelet count.

Measure of conjugated and unconjugated bilirubin.

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1

The allegations in this Consolidated Amended Class Action Complaint are based on the

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personal knowledge of Vinod Patel (“Patel” or “Plaintiff”) as to Plaintiff’s own acts, and are

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based upon information and belief as to all other matters alleged herein. Plaintiff’s information

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and belief is based upon the investigation by Plaintiff’s counsel into the facts and circumstances

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alleged herein, including, without limitation, (i) review and analysis of public filings Geron

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Corporation (“Geron” and the “Company”) made with the United States Securities and Exchange

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Commission (“SEC”) referenced herein; (ii) review and analysis of press releases, analyst

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reports, public statements, news articles and other publications disseminated by or concerning

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Geron and the other defendants named herein (together with Geron, the “Defendants”)

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referenced herein; and (iv) review and analysis of Company conference calls, press conferences,

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and related statements and materials referenced herein. Many additional facts supporting the

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allegations herein are known only to Defendants and/or are within their exclusive custody or

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control and/or in the custody and control of the FDA. Plaintiff believes that additional

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evidentiary support for the allegations herein will emerge after a reasonable opportunity to

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conduct discovery.

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NATURE OF ACTION

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1. This is a federal class action on behalf of purchasers of publicly traded Geron

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common stock between December 10, 2012 and March 11, 2014, inclusive (the “Class Period”),

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pursuing remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the

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“Exchange Act”) and Rule 10b-5 promulgated thereunder. These claims are asserted against

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Geron and certain of its officers and directors who made materially false or misleading

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statements or omissions during the Class Period in press releases, analyst conference calls and

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presentations, and filings with the SEC, inter alia.

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2. Geron is a clinical-stage biopharmaceutical company developing a first-in-class

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telomerase inhibitor, imetelstat, in hematologic myeloid malignancies. According to Geron, the

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discovery and early development of imetelstat was based on the Company’s purported expertise

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in telomerase and telomere biology. Telomerase is an enzyme that enables cancer cells to

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maintain telomere length, which provides them with the capacity for limitless cellular

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I replication. Imetelstat is a potent and specific inhibitor of telomerase.

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3. In late 2011, as the financial pressures mounted from Geron’s perpetual failure to

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develop a marketable drug, the Company made the risky decision to place all of its bets on

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imetelstat. In furtherance of this plan, in the year leading up to and during the Class Period,

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Geron slowly whittled away its numerous clinical testing and development programs until the

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Company was solely dependent on imetelstat—a drug in the early stages of development. By the

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start of the Class Period in December 2012, Geron was running four Phase 2 trials of imetelstat

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in solid tumors and hematologic malignancies, but its Essential Thrombocythemia/Polycythemia

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Vera Trial (the “ET/PV Trial”) was the only one that showed any promise.

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4. The results from the ET/PV Trial of imetelstat revealed that the drug appeared to

12 I be effective in patients with these myeloproliferative disorders and was extremely “potent.” The

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Company’s safety data, however, showed that all 18 ET patients in the trial experienced

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persistent abnormal Liver Function Tests (“LFTs”) and hepatotoxicity. The Company had no

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idea whether the hepatotoxicity was reversible and ensured that it never would know by choosing

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to follow up on patients who left the ET/PV Trial for only 30 days instead of following patients

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until their LFTs returned to normal or baseline—as is standard practice and expressly provided

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for in FDA Guidance. Armed with these troubling safety results and desperate to build

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momentum for future clinical trials and Geron’s ability to raise financing, beginning on

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December 10, 2012, and throughout the remainder of the Class Period, Geron insisted that the

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drug was “well tolerated” in patients and only cryptically disclosed certain aggregated enzyme

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elevation levels to the public.

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5. Recognizing that imetelstat’s benefit/risk profile for ET/PV—disorders that are

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not fatal and currently well treated by other FDA approved medications—would not justify

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further development of these indications, Geron approached Dr. Ayalew Tefferi at the Mayo

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Clinic to propose a pilot study of imetelstat in a third, far more serious myeloproliferative

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disorder, myelofibrosis. Dr. Tefferi subsequently began a pilot study of imetelstat in

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I myelofibrosis in October 2012 (the “Myelofibrosis Trial”).

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6. The results from the Myelofibrosis Trial were leaked in dribbles throughout the

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second half of 2013, and when combined with the positive ET/PV Trial data, created enthusiasm

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among Geron shareholders who, in turn, drove up the stock price. On November 7, 2013, the

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abstract for the Myelofibrosis Trial was published, revealing positive preliminary efficacy data,

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including a complete remission. On the same day Geron announced its intention to begin a

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Phase 2 trial of imetelstat in myelofibrosis in the first half of 2014. This pushed the stock price

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even higher, reaching a class period high of $5.55 on December 5, 2013.

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7. Rather than be forthcoming regarding the real concern of hepatocellular injury

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caused by imetelstat and the Company’s complete failure to ensure the drug had not caused

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chronic liver damage, on January 30, 2014, Geron used the bloated stock price to initiate a public

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offering of 22,500,000 shares of common stock at $4.00 per share, for approximately $96 million

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in total proceeds. Tellingly, at the time of the offering, Geron omitted to disclose that the clinical

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significance, long-term consequences, and reversibility of the abnormal LFTs were all then

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undetermined. Likewise, Geron conveniently omitted that in November 2013, one of the ET/PV

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Trial patients presented with hepatic encephalopathy, a serious brain syndrome resulting from

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liver failure, and also suffered from cirrhosis, a scarring of the liver caused by liver injury.

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Geron further omitted that at the end of January 2014, the patient developed a variceal bleed,

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which may have been caused by imetelstat and ultimately resulted in the patient’s death.

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8. Then, on March 12, 2014, Geron disclosed that it had received verbal notice from

22 I the FDA that its Investigational New Drug (“IND”) application for imetelstat had been placed on

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full clinical hold, affecting all ongoing Company-sponsored clinical trials. According to the

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Company, the FDA cited the following safety issues as the basis for the clinical hold: (a) lack of

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evidence of reversibility of hepatotoxicity; (b) risk for chronic liver injury; and (c) lack of

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adequate follow-up in patients who experienced hepatotoxicity. To address the clinical hold, the

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FDA required the Company to (a) provide clinical follow-up information in patients who

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experienced liver function test, or LFT, abnormalities until the LFT abnormalities resolved to

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normal or baseline; and (b) provide information regarding the reversibility of the liver toxicity

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after chronic drug administration in animals. As a result, Geron informed investors that the

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clinical hold would affect the remaining eight patients in the Company’s’ ET/PV Trial and the

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remaining two patients in the Company’s Phase 2 study in multiple myeloma. In other words,

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the patients were to be immediately taken off imetelstat. Also, the Company indicated that its

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planned Phase 2 clinical trial in myelofibrosis would likely be delayed due to the FDA’s clinical

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hold.

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9. On this news, Geron common stock declined $2.71 per share, over 61%, to close

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I at $1.69 per share on March 12, 2014, on unusually heavy volume.

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10. Nearly three months later, on June 4, 2014, the Company disclosed for the first

12 I time that the patient who had been discharged from the ET/PV Trial in November 2013 had died

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after developing an esophageal variceal bleed in late January 2014—the same time as Geron’s

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I public offering—which the investigator determined could be related to imetelstat.

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11. The true facts, which were known and/or recklessly disregarded by Defendants

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but concealed from the investing public during the Class Period, were as follows: (a) data from

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the ET/PV Trial of imetelstat indicated that imetelstat caused persistent hepatotoxicity in trial

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patients; (b) data from the ET/PV Trial of imetelstat demonstrated that patients faced a risk of

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chronic DILI (defined below); (c) Geron only followed up with patients experiencing LFT

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abnormalities who discontinued the ET/PV Trial for 30 days rather than following up with them

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until the abnormal LFT results resolved to normal or baseline; and (d) Geron lacked evidence to

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determine whether the hepatotoxicity caused by imetelstat was reversible.

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12. As a result of Defendants’ wrongful acts and omissions, and the precipitous

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decline in the market value of the Company’s common stock when this wrongdoing came to

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I light, Plaintiff and other Class Members have suffered significant losses and damages.

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1

JURISDICTION AND VENUE

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13. This action arises under Sections 10(b) and 20(a) of the Exchange Act of 1934, as

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amended, 15 U.S.C. §§ 78j(b) & 78t, and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated

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I thereunder.

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14. This Court has jurisdiction over the action pursuant to 28 U.S.C. § 1331 and

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Section 27 of the Exchange Act, 15 U.S.C. § 78aa.

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15. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) and Section 27 of

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the Exchange Act, 15 U.S.C. § 78aa. Geron maintains its principal place of business in this

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District. Certain of the acts and conduct complained of herein, including dissemination of

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materially false and misleading information to the investing public, occurred in this District.

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16. In connection with the acts alleged in this Complaint, Defendants, directly or

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indirectly, used the means and instrumentalities of interstate commerce, including, but not

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limited to, the mails, interstate telephone communications, and the facilities of the national

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I securities markets.

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PARTIES

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17. Plaintiff Vinod Patel, as set forth in his shareholder certification (ECF No. 26-2),

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purchased Geron common stock at artificially inflated prices during the Class Period and was

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damaged thereby.

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18. Defendant Geron is a Delaware corporation with its principal executive offices

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located at 149 Commonwealth Drive, Suite 2070, Menlo Park, California 94025.

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19. Defendant John A. Scarlett, M.D. (“Scarlett”) was, at all relevant times, Chief

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Executive Officer (“CEO”) and a director of Geron. Because of his positions with the Company,

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Scarlett had access to the Company’s study protocols and the adverse, undisclosed safety data for

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imetelstat’s ET/PV Trial. Scarlett directly participated in and controlled management of the

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Company, including, without limitation, day-to-day decisions concerning the development of

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imetelstat, communications with the FDA, publication of statements made to the investing

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public, the SEC, and the FDA concerning the safety and efficacy of imetelstat, and publication of

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statements by and on behalf of Geron concerning imetelstat in the Company’s press releases,

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I SEC filings, and other public statements.

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20. Defendant Stephen M. Kelsey, M.D. (“Kelsey”) was, until May 2, 2013,

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Executive Vice President, Head of Research and Development, and Chief Medical Officer

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(“CMO”) of Geron. Because of his positions with the Company, Kelsey had access to the

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Company’s study protocols and the adverse, undisclosed safety data for imetelstat’s ET/PV Trial.

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Kelsey directly participated in and controlled management of the Company, including, without

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limitation, day-to-day decisions concerning the development of imetelstat, communications with

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the FDA, publication of statements made to the investing public, the SEC, and the FDA

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concerning the safety and efficacy of imetelstat, and publication of statements by and on behalf

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of Geron concerning imetelstat in the Company’s press releases, SEC filings, and other public

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statements.

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21. Defendant Olivia K. Bloom (“Bloom”) was, at all relevant times, Senior Vice

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President, Finance, Chief Financial Officer (“CFO”), and Treasurer of Geron. Because of her

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positions with the Company, Bloom had access to the Company’s study protocols and the

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adverse, undisclosed safety data for imetelstat’s ET/PV Trial. Bloom directly participated in and

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controlled management of the Company, including, without limitation, day-to-day decisions

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concerning the development of imetelstat, publication of statements made to the investing public,

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the SEC, and the FDA concerning the safety and efficacy of imetelstat, and publication of

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statements by and on behalf of Geron concerning imetelstat in the Company’s press releases,

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SEC filings, and other public statements.

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22. Defendants Scarlett, Kelsey, and Bloom are collectively referred to hereinafter as

23 I I the “Individual Defendants.”

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23. The Individual Defendants, because of their positions with the Company,

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I possessed the authority to control, correct, and/or update the contents of Geron’s public

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disclosures to the market. Each of the Individual Defendants had the duty to exercise due care

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and diligence and the duty of full and candid disclosure of all material facts relating to the

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Company’s financial results and operations. The Individual Defendants further had the duty to

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correct and/or update any previously issued statements that were untrue or became materially

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misleading or untrue, so that the market price of the Company’s publicly traded common stock

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would be based upon truthful, complete, and accurate information. To discharge their duties, the

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Individual Defendants were required to exercise reasonable and prudent supervision over the

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dissemination of information concerning the Company’s financial results and operations. By

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virtue of such duties, these officers were required, inter alia, to:

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a)

conduct and supervise the business of Geron in accordance with federal laws;

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b)

supervise the preparation of Geron’s SEC filings and approve any reports

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concerning Geron’s financial reporting and results; and

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c)

ensure that Geron established and followed adequate internal controls.

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24. As officers, directors, and/or controlling persons of a publicly-held company

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which is registered with the SEC under the federal securities laws and the securities of which

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were traded on the NASDAQ GS and governed by the provisions of the federal securities laws,

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the Individual Defendants each had a duty to (1) promptly disseminate complete, accurate and

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truthful information with respect to the Company’s financial statements and operations; (2)

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correct any previously issued statements that were materially misleading or untrue so that the

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market could accurately price the Company’s publicly traded securities based upon truthful,

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accurate, and complete information; and (3) update any previously-issued statements that became

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materially misleading or untrue so that the market could accurately price the Company’s publicly

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traded securities based upon truthful, accurate, and complete information.

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25. The Individual Defendants are each primarily liable for the misrepresentations

23 I and misleading statements alleged herein and are also liable as controlling persons of Geron.

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The scheme deceived the investing public regarding Geron’s imetelstat trials, which caused

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Plaintiff and other members of the Class to purchase Geron common stock at artificially inflated

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prices during the Class Period and suffer damages as a result.

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1

BACKGROUND

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I Clinical Trial Protocols

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26. Every clinical trial must be conducted according to a clinical trial protocol which

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is “[a] document that describes the objective(s), design, methodology, statistical considerations,

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and organization of a trial. The protocol usually also gives the background and rationale for the

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trial, but these could be provided in other protocol referenced documents.” Guidance for

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Industry: E6 Good Clinical Practice: Consolidated Guidance, § 1.44 (Food and Drug Admin.,

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1996). The trial protocol also includes information regarding “[t]he follow-up for subjects

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withdrawn from investigational product treatment/trial treatment,” id. at § 6.5.3(d), and “[t]he

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treatment(s) to be administered, including the name(s) of all the product(s), the dose(s), the

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dosing schedule(s), the route/mode(s) of administration, and the treatment period(s), including

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the follow-up period(s) for subjects for each investigational product treatment/trial treatment

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group/arm of the trial,” id. at § 6.6.1.

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27. The sponsor of the clinical trial is responsible for designing the protocol, and

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when doing so, “should utilize qualified individuals (e.g., biostatisticians, clinical

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pharmacologists, and physicians) as appropriate.” Id. at § 5.4.1. After the sponsor designs the

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protocol, the sponsor provides it to the trial investigator to be used when testing patients.

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Specifically, “[t]he investigator/institution should conduct the trial in compliance with the

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protocol agreed to by the sponsor and, if required, by the regulatory authority(ies), and which

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was given approval/favorable opinion by the IRB/IEC. The investigator/institution and the

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sponsor should sign the protocol, or an alternative contract, to confirm their agreement.” Id. at §

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4.5.1. When the investigator observes “[a]dverse events and/or laboratory abnormalities

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identified in the protocol as critical to safety evaluations” they “should be reported to the sponsor

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according to the reporting requirements and within the time periods specified by the sponsor in

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the protocol.” Id. at § 4.11.2.

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1

I Hepatotoxicity and Drug Induced Liver Injury

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28. During clinical trials, it is critical that the liver function of trial subjects is closely

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monitored to determine whether any patients are experiencing hepatotoxicity, also known as

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drug-induced liver injury (“DILI”). See Ex. A, Guidance For Industry: Drug-Induced Liver

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Injury: Premarketing Clinical Evaluation, 8 (Food and Drug Admin., 2009). The potential for

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hepatotoxicity is essential to the safety assessment of a new drug. Indeed DILI is currently the

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second most common reason effective drugs are not approved, and the FDA has not approved

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any drug since 1998 that has subsequently been removed from the market because of serious

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DILI. See Lana L. Pauls, MPH & John R. Senior, MD, Food and Drug Admin., Serious Drug

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Induced Liver Injury, 12 (Nov. 14, 2013); Lana L. Pauls, Food and Drug Admin., What Do We

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Mean By Looking?, 7 (Mar. 13, 2012). Furthermore, according to the FDA, DILI has been the

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most frequent single cause of safety-related drug marketing withdrawals for the past 50 years.

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See Ex. A at 2.

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29. As a result, LFTs are conducted periodically throughout clinical trials to

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determine whether any trial subjects have suffered liver injury by measuring enzymes, proteins,

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and substances that are produced or excreted by the liver and affected by liver damage or

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disease. When conducting an LFT, a blood sample is tested to determine levels of (a) total

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protein in the blood, (b) bilirubin, a product of normal red blood cell breakdown that becomes

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increased when too much is being produced or too little is being removed due to bile duct

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obstructions or impaired processing; (c) aspartate transaminase (“AST”), a transaminase enzyme

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found in the liver, the heart, and other muscles in the body that is important to amino acid

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metabolism; (d) alanine transaminase (“ALT”), a transaminase enzyme mainly found in the liver

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that catalyzes the two parts of the alanine cycle; (e) alkaline phosphatase (“ALP”),

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a hydrolase enzyme related to the bile ducts that is particularly concentrated in liver, bile duct,

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kidney, bone, and the placenta; and (f) gamma-glutamyl transferase, an enzyme found mainly in

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liver cells that is useful to help determine the cause of elevated ALP. See Liver Function Tests,

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http://www.mayoclinic.org/tests-procedures/liver-function-tests/basics/why-its-done/prc-

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20012602?footprints=mine (last visited Sept. 16, 2014).

30. The FDA Guidance on Drug-Induced Liver Injury: Premarketing Clinical

I Evaluation advises that:

The single clearest (most specific) predictor found to date of a drug’s potential for severe hepatotoxicity, [] is the occurrence of a small number of cases of hepatocellular injury (aminotransferase elevation) accompanied by increased serum total bilirubin (TBL), not explained by any other cause, such as viral hepatitis or exposure to other hepatotoxins, and without evidence of cholestasis, together with an increased incidence of AT elevations in the overall trial population compared to control.

Ex. A at 4.

31. Hy’s Law, developed from the observations of DILI scholar Hy Zimmerman, is

often used by investigators to determine when hepatocellular injury indicated in LFTs has the

potential to result in severe liver injury. The theory is based upon the fact that the liver has

substantial excess capacity for excreting bilirubin and if a drug has caused enough hepatocellular

injury to impair that capacity, it has done substantial damage with potentially lethal

consequences. See Arie Regev & Einar S. Björnsson, Drug-Induced Liver Injury: Morbidity,

Mortality, and Hy’s Law, 147 Gastroenterology 20 (2014). Hy’s Law cases have the following

three components: (a) The drug causes hepatocellular injury which is generally shown by

elevations of ALT or AST at least three times the upper limit of normal (>3xULN); (b) among

trial subjects showing elevations in ALT or AST, one or more also show elevations in bilirubin

at least two times the upper limit of normal (>2xULN), without initial findings of cholestasis;

and (c) no other reason can be found to explain the combination of increased ALT and/or AST

and bilirubin, such as viral hepatitis A, B, or C; preexisting or acute liver disease; or another drug

capable of causing the observed injury. See id. at 20-21.

32. The FDA has made clear that finding “one Hy’s Law case in the clinical trial

database is worrisome; finding two is considered highly predictive that the drug has the potential

to cause severe DILI when given to a larger population.” See Ex. A at 5. Significantly, even

liver abnormalities that do not reach the severity of a Hy’s Law case are important to the FDA’s

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safety analysis. As the FDA explains in its Guidance, any evaluation of “laboratory

measurements that signal the potential for such drug induced liver injury” is important because

most drugs that cause severe DILI do so infrequently; typical drug development databases with up to a few thousand subjects exposed to a new drug will not show any cases. Databases may, however, show evidence or signals of a drug’s potential for severe DILI if the clinical and laboratory data are properly evaluated for evidence of lesser injury that may not be severe, but may predict the ability to cause more severe injuries.

I Id. at 1 (emphasis in original). The FDA further advises that:

It is critical [] to determine whether mild hepatotoxicity reflects a potential for severe DILI or reflects a capacity for only limited injury. To make this distinction, it is important to detect any cases of more severe injury and to examine such cases closely, observing the course and outcome of the injury, and seeking additional information that might identify other causes. . . .

Id. at 7.

33. To assess whether mild hepatotoxicity reflects a potential for severe DILI, the

FDA stresses that indications of hepatocellular injury must be closely monitored, advising that

“it is critical to initiate close observation immediately upon detection and confirmation of early

signals of possible DILI, and not wait until the next scheduled visit or monitoring interval.” Id.

at 9. 1 Thus, when a LFT shows ALT or AST >3xULN, the investigator should conduct

repeat testing within 48 to 72 hours of all four of the usual serum measures (ALT, AST, ALP, and TBL) to confirm the abnormalities and to determine if they are increasing or decreasing. There also should be inquiry made about symptoms. . . . waiting a week or two before obtaining confirmation of elevations may lead to a false conclusion that the initially observed abnormality was spurious .

Id. at 8.

34. As well, when assessing the potential for a drug to cause liver injury, follow up

should be conducted in all patients who experienced liver abnormalities to determine whether the

injury is reversible:

All trial subjects showing possible DILI should be followed until all abnormalities return to normal or to the baseline state. DILI may develop or progress even after the causative drug has been stopped. Results should be recorded on the case report form and in the database. Note that longer follow-up

All emphases are added unless otherwise noted.

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27


28 11


can sometimes reveal an off-drug repetition of what had appeared to be DILI, indicating that liver injury was related to underlying liver disease.

Id. at 11-12.

35. In a presentation entitled “Serious Drug Induced Liver Injury” given by the

Center for Drug Evaluation and Research, the FDA also explained that when liver test elevations

are detected, the “[s]ponsors of studies should make sure that their investigators know what to

do, and report cases immediately[,]” “[t]hey should confirm abnormalities promptly, in local

laboratory as needed[,]” “[i]f confirmed, interrupt drug administration and follow ALT, AST,

ALP, BILI serially and closely[,]” “[i]nvestigate clinically for probable or most likely cause[,]”

and “follow [the] subject’s course until resolution; record and report findings [.]” Lana L.

Pauls, MPH & John R. Senior, MD, Food and Drug Admin., Serious Drug Induced Liver Injury,

44 (Nov. 14, 2013).

36. Often, toxicity levels are reported pursuant to standardized grading scales. The

Cancer Therapy Evaluation Program of the National Cancer Institute has developed a grading

system which is referred to as the Common Toxicity Criteria for Adverse Events. Under this

scale, the following levels are used to assess liver toxicity:

Serum Grade 1 Grade 2 Grade 3 Grade 4

Alkaline phosphate >1.0–2.5 x ULN >2.5–5.0 x ULN >5.0–20 x ULN > 20 x ULN

Liver Function Tests >1.0–2.5 x ULN >2.5–5.0 x ULN >5.0–20 x ULN > 20 x ULN –ALT, AST Bilirubin >1.0–1.5 x ULN >1.5–3.0 x ULN >3.00–10 x ULN >10 x ULN

See Severity Grading in Drug Induced Liver Injury, http://livertox.nih.gov/Severity.html (last

visited Sept. 3, 2014).

37. In a Hy’s Law case, the patient would have at least Grade 2 elevations in ALT or

AST and Grade 2 elevations in bilirubin.

1

2

3

4

5

6

7

8

9

10

11

12

13

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15

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19

20

21

22

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24

25

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28 12

27


1

I Geron and Imetelstat

2

38. Geron is a clinical stage biopharmaceutical company developing a telomerase

3

inhibitor, imetelstat, in hematologic myeloid malignancies. See Geron Company Overview,

4

I www.geron.com/about-us.

5

39. In the human body, most cells are only able to divide a limited number of times,

6

and this number of divisions is regulated by telomere length. Telomeres are repetitions of a

7

DNA sequence located at the ends of chromosomes. They act as protective caps to maintain

8

stability and integrity of the chromosomes. Every time a cell divides, the telomeres shorten.

9

Eventually, they shrink to a critically short length and the cell either dies by apoptosis or stops

10

dividing and senesces. Telomerase is a naturally occurring enzyme that maintains telomeres and

11

prevents them from shortening during division in cells, such as stem cells, that must remain

12

immortalized to support normal health. Telomerase is upregulated in many tumor progenitor

13

cells, which enables the continued and uncontrolled proliferation of the malignant cells that drive

14

tumor growth and progression. See Telomeres and Telomerase in Normal Development,

15

www.geron.com/telomerase (last visited Sept. 17, 2014).

16

40. Despite the clinical potential of telomerase as a target for developing new cancer

17

treatments, telomerase inhibitors have not progressed to clinical development due to lack of

18

potency or specificity. In the alternative, Geron’s sole product candidate, imetelstat, has a lipid-

19

conjugated 13-mer oligonucleotide sequence that is complementary to and binds with high

20

affinity to the RNA template of telomerase, thereby directly inhibiting telomerase activity. To

21

improve the ability of imetelstat to permeate through cellular membranes and bind to its target,

22

Geron conjugated the oligonucleotide sequence to a lipid group. See About Imetelstat,

23

www.geron.com/telomerase (last visited Sept. 17, 2014).

24

41. Geron believes that inhibiting telomerase through the introduction of imetelstat is

25

an attractive approach to treating cancer because it may limit the proliferative capacity of

26

I malignant cells. See id. To that end, Geron filed its investigational new drug application for

27

imetelstat with the FDA in April 2005 in order to begin testing of imetelstat on human patients.

28 13



1

I See Press Release, Geron Corporation, Geron Announces FDA Clearance to Start Clinicial Trials

2

of Its Telomerase Drug GRN163L in Patients With Chronic Lymphocytic Leukemia (May 23,

3

I 2005).

4

42. With the FDA’s approval, Geron commenced a series of Phase 1 clinical trials to

5

measure the tolerability of imetelstat in patients with breast cancer, lung cancer, leukemia,

6

multiple myeloma, and ET/PV. Based on these results, in 2010, Geron selected metastatic breast

7

cancer, advanced non-small cell lung cancer, and hematologic tumors ET/PV and multiple

8

myeloma to further test in Phase 2 trials. See Geron, Annual Report (Form 10-K) (March 7,

9

2012).

10

Geron Downsizes To Develop Imetelstat Exclusively

11

43. On November 14, 2011, Geron announced its intention to discontinue

12 I development of its stem cell programs in order to focus its resources on advancing its Phase 2

13

clinical trials of imetelstat and GRN1005, its peptide-drug conjugate designed to treat cancers in

14

the brain. See Press Release, Geron Corporation, Geron to Focus on Its Novel Cancer Programs

15

(Nov. 14, 2011). The Company explained that the “decision to narrow Geron’s technology and

16

therapeutic focus was made after a strategic review of the costs, value inflection timelines and

17

clinical, manufacturing and regulatory complexities associated with the Company’s research and

18

clinical-stage assets.” Id. This resulted in the Company eliminating 66 full-time positions,

19

representing 38% of Geron’s workforce. See id.

20

44. In September 2012, Geron discontinued the metastatic breast cancer trial because

21

the median progression-free survival in the imetelstat treatment arm was shorter than in the

22

comparator arm. See Press Release, Geron, Geron Provides Update on Imetelstat Clinical

23

Development Program (Sept. 10, 2012). Therefore, by the time the Class Period commenced on

24

December 10, 2012, the following Company sponsored trials were still active: (a) Imetelstat as

25

Maintenance Therapy After Initial Induction Chemotherapy in Non-small Cell Lung Cancer; (b)

26

Open Label Study With Imetelstat to Determine Effect of Imetelstat in Patients w/ Previously

27

Treated Multiple Myeloma (the “Multiple Myeloma Trial”); and (c) Open Label Study to

28 14



1

Evaluate the Activity of Imetelstat in Patients With Essential Thrombocythemia or Polycythemia

2

Vera (ET/PV) (the ET/PV Trial).

3

45. Shortly thereafter, on December 3, 2012, Geron announced it was again

4

restructuring to discontinue testing of GRN1005 and instead focus its entire operation on the

5

development of imetelstat. See Press Release, Geron Corporation, Geron Discontinues

6

GRN1005 and Restructures to Focus on Imetelstat Development in Hematologic Malignancies

7

and Solid Tumors with Short Telomeres (Dec. 3, 2012). This included further reducing its

8

workforce from 107 positions to 64 full-time positions and reducing its annual cash operating

9

expenses from approximately $65 million in 2012 to approximately $33 million in 2013. See id.

10

46. CEO Scarlett justified this decision the following day, explaining on a conference

11

call that in 2012 “the Company has undergone many changes, some of which have been due to

12

decisions we’ve taken to alter the strategic direction of the Company, and some of which have

13

been made for us as the data from ongoing clinical trials has emerged. I personally remain

14

enthusiastic about the prospects for Imetelstat to become an important drug with the novel and

15

clinically [] mechanism of action that gives it the potential to address currently unmet needs in

16

multiple oncology indications.” John A. Scarlett, CEO, Geron Corporation, Geron Company to

17

Discuss Strategic Realignment Conference Call 5 (Dec. 4, 2012) (transcript available from

18

LexisNexis, Inc.).

19

47. Nearly five months later, on April 25, 2013, the Company announced that it was

20

taking another radical change of course, and would now “focus its resources on hematologic

21

myeloid malignancies[.]” Press Release, Geron Corporation, Geron Updates Imetelstat

22

Development Strategy, Including Progress of Investigator-Sponsored Study in Myelofibrosis

23

(Apr. 25, 2013). This meant that the Company would be discontinuing clinical development of

24

imetelstat in non-small cell lung cancer and ET/PV. See id. Geron discontinued its discovery

25

research and companion diagnostics programs, closed its research laboratory facility, and

26

reduced its workforce from 64 to 44 positions in order to facilitate the transition. See id. Along

27

28 15



1

with this announcement, Geron disclosed that the CMO Kelsey would leave the Company on

2

I May 3, 2013 and the Company would not fill his position. See id.

3

Geron’s Phase 2 Trial of Imetelstat in Patients with Essential Thrombocythemia or

4 Polycythemia Vera

5

48. In December 2010, Geron began enrollment in its Phase 2 open-label study of

6

single agent imetelstat in patients with ET or PV who had failed or were intolerant to at least one

7

prior therapy, or who refused standard therapy. The trial was sponsored by the Company and

8

conducted by fourteen investigators listed on the abstract, six of whom were employed by Geron.

9

See Open Label Study to Evaluate the Activity of Imetelstat in Patients With Essential

10

Thrombocythemia or Polycythemia Vera (ET/PV), http://www.clinicaltrials.gov/ct2/show/

11

NCT01243073?term=imetelstat&rank=10 (last visited Sept. 16, 2014).

12

49. ET and PV belong to a group of rare, hematologic diseases known as

13 I I myeloproliferative neoplasms. This group of disorders is characterized by the overproduction of

14

one or more of the three main blood cell lines—red blood cells, white blood cells, or platelets.

15

I See Essential Thrombocythemia Facts, 1 (Leukemia & Lymphoma Society ed., 2012).

16

50. ET occurs when the body produces an excess of blood platelets in the bone

17

marrow. See id. Individuals with ET are at risk for the formation of blood clots, which can

18

restrict blood flow to vital organs, and episodes of uncontrolled bleeding. See id. at 2. PV

19

occurs when there is an overproduction of blood cells in the bone marrow. See Polycythemia

20

Vera Facts, 1 (Leukemia & Lymphoma Society ed., 2012). This proliferation of cells in the

21

marrow leads to abnormally high numbers of circulating red blood cells within the blood. See id.

22

Consequently, the blood thickens and increases in volume resulting in improper blood flow

23

through smaller blood vessels. See id. at 2. The great majority of individuals with ET or PV

24

have a mutation called V617F JAK2 found in the JAK2 gene. The gene mutation causes

25

abnormal signaling in the JAK pathway, which regulates blood cell production. The reason for

26

this mutation is unknown. See id. at 1; See Essential Thrombocythemia Facts, 1 (Leukemia &

27

Lymphoma Society ed., 2012).

28 16



1

51. At this time, there are currently three drugs on the market used to treat ET and

2

PV. Droxia, Agrylin, and Intron A do not target the cause of the diseases, but they do reduce

3

platelet counts for those patients at risk of blood clots. See Press Release, Geron Corporation,

4

Geron Initiates Phase 2 Clinical Trial of Imetelstat in Patients With Essential Thrombocythemia

5

(Jan. 19, 2011).

6

52. The ET/PV Trial was designed to leverage non-clinical observations from

7

Geron’s Phase 1 trial that imetelstat distributes well to bone marrow and selectively inhibits the

8

proliferation of malignant progenitors from patients with ET or PV. See id. Indeed, in the

9

January 19, 2011 press release cited above, CMO Kelsey stated “[i]n ET, we think that targeting

10

the leukemic stem cell with imetelstat might impact the biology of the disease, which is not

11

possible with current standard treatments[,]” “[t]he primary efficacy endpoint is best overall

12

hematologic response rate . . . [s]afety and tolerability will also be assessed.”

13

53. For ET patients, the primary objective of the study was to obtain a preliminary

14

estimate of the efficacy of imetelstat, as measured by best hematologic response within the first

15

year and for PV patients, the primary objective of the study was to obtain a preliminary estimate

16

of the efficacy of imetelstat, as measured by maintenance of Hct < 45% in men and < 42% in

17

women without phlebotomy or myelosuppressive therapy within the first year of therapy. The

18

secondary objective for all patients was to determine the safety and tolerability of imetelstat by

19

assessing the incidence, nature, relatedness, and severity of adverse events, laboratory

20

abnormalities, and vital signs. See Open Label Study to Evaluate the Activity of Imetelstat in

21

Patients With Essential Thrombocythemia or Polycythemia Vera (ET/PV),

22

http://www.clinicaltrials.gov/ct2/show/NCT01243073?term=imetelstat&rank=10 (last visited

23

Sept. 19, 2014). Hematologic responses were measured by reductions in platelet counts and

24

molecular responses were measured by reductions in mutant JAK2 allelic burden in circulating

25

granulocytes. See id. The European LeukemiaNet criteria were used to grade both

26

hematological and molecular responses. See id.

27

28 17



54. Pursuant to the enrollment criteria, eligible patients must have failed or been

2

intolerant to at least one prior therapy, or refused standard therapy. The investigators were not to

3

enroll any patients who had any serious co-morbid medical conditions, including active or

4

chronically recurrent bleeding, clinically relevant active infection, cirrhosis, and chronic

5

obstructive or chronic restrictive pulmonary disease, per the investigator’s discretion. See id. By

6

the time new patient enrollment was closed in December 2012, 18 ET patients and 2 PV patients

7

were enrolled in the trial.

8

55. On December 3, 2012, after—to the best of Plaintiff’s knowledge—Geron had

9

reviewed the preliminary data from the ET/PV Trial and noted the hepatotoxicity experienced by

10

patients, Geron changed the purpose of the ET/PV Trial and for the first time, stated for the first

11

time that it was “designed to provide proof-of-concept for the potential use of imetelstat as a

12

treatment for various hematologic myeloid malignancies, including myelofibrosis,

13

myelodysplastic syndromes and acute myelogenous leukemias.” 2 Press Release, Geron

14

Corporation, Geron Discontinues GRN1005 and Restructures to Focus on Imetelstat

15

Development in Hematologic Malignancies and Solid Tumors with Short Telomeres (Dec. 3,

16

2012).

17

56. The following week, on Sunday, December 8, 2012, the preliminary results from

18

Geron’s ET/PV Trial were presented at the 54th Annual Meeting of the American Society of

19

Hematology (“ASH”). For hematologic responses, the data showed that platelet counts were

20

reduced in 100% of patients. For molecular responses, the data showed that 88% of the patients

21

with the JAK2 V617F gene mutation experienced reductions in the allele burden. In regard to

22

safety, the abstract published by ASH stated that “[l]ong-term administration of imetelstat was

23

generally well tolerated,” see Gabriela M. Baerlocher, MD, et al., Imetelstat Rapidly Induces and

24

25 2 On a March 13, 2013 conference call, then CMO Kelsey further elaborated, stating:

“Most ET patients are served well with currently available therapies. The purpose of the study in 26

ET was to provide proof of concept for the potential use of imetelstat as a treatment for various other hematologic myeloid malignancies including myelofibrosis, myelodysplastic syndromes

27 and acute myeloid leukemia.”

28 18



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Maintains Substantial Hematologic and Molecular Responses in Patients with Essential

Thrombocythemia (ET) Who Are Refractory or Intolerant to Prior Therapy: Preliminary Phase II

Results, Abstract 179 presented at the 2012 Annual Meeting of the American Society of

Hematology, Atlanta, GA, Dec. 8-11, but the presentation cryptically revealed that 92.9% of

patients showed elevations in ALT or AST in “All Grades” and 14.3% of patients experienced

Grade 3 elevations in ALT or AST. Specifically, the slides included the following information:

Overall hematologic response in 100% of patients (n = 14) • Complete Response in 13 of 14 (92.9%) patients • Partial Response in 1 of 14 (7.1%) patients

2 3 I S

Qj E J Z 8 U 9 ra

10 11 12 13 14

Time to Hematologic Response

Patients achieving CR - Patients achieving PR

• Time to 1st occurrence of platelet count <400 x 10 3/[AL

median = 3.1 weeks (21 to 3.1 weeks)

• S

median 6.1weeks (5.1 to 14.1 weeks)

Month 1 Month? Month I Month Month Month 6


28 19

27


1

2 • % JAK2 V617F allelic burden decreases

• PR observed in 6/7 patients (85.7%)

overtime in all patients

ID a

r U

LL N.

> N

C

LL I.,.

I I I I I I I

, 3 6 9 12 15 18 0 w

Month

N7 7 8 4 3 3 1

% Crc -70.8% -693% -65.4% -69.3% -722% -902%

0 3 6 9 12 15 18 Mntb

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Frequent Non-Hematologic Adverse Events All Grades (N14) Grade 3 (N14)

G1 Events (Nausea/Diarrhea/Constipation) 14 100% 0

Infections 12 (85.7%) 1* (7.1%)

Fatigue 9(64.3%) 1(7.1%)

Musculoskeletal Disorders (Pain) 9 (643%) 0

Bleeding Events 8(57.1%) - 1 (7.1%)

Headache 7(50.0%) 1(7.1%)

Cough 7(50 .0%) 0

[Decreased Appetite 7(50.0%) 0

Dizziness 6(42,9%)

Infusion Reactions 4(28.6%) (7.1%)

Grade 3 celluhtis/wouid infection * Grade 3 post-operative hemorrhagic anemia

Grade 3 syncope patient remains on treatment

One Grade 4 Adverse event: imeteIstt unrelated femoral neck fracture

• No Grade 5 Adverse events

• No thromboembolic events were reported S.-


CA NO. 3:14-CV-01224 (CRB)


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

Laboratory Parameter All Grades (N14) Grade 3 (N14)

Grade 4

ALT/AST 13(92.9%) 2(14.3%)

0

(change from grade at baseline)

Neutropenia U (78.6%) 4(28.6%)

2 (14.3%)

Anemia - 9(64.3%) 1 (7.1%)

0 (change fromgrade at baseline) _______________________

Thrombocytopenia 6(42.9%) 0

0

Post-operativehemorrhagc anemia

No cases of febrile neutropenia were reported

-t.

Gabriela M. Baerlocher, MD, et al., Imetelstat Rapidly Induces and Maintains Substantial

Hematologic and Molecular Responses in Patients with Essential Thrombocythemia (ET) Who

Are Refractory or Intolerant to Prior Therapy: Preliminary Phase II Results, available at

http://www.geron.com/PDFs/Geron-Imetelstat-ETPh2-ASH-2012.pdf.

57. As well, the press release announcing these results to the public issued December

10, 2012 simply stated that imetelstat “was generally well tolerated. The majority of the non-

hematologic adverse events were mild-to-moderate in severity, the most frequent being

gastrointestinal events.” Press Release, Geron Corporation, Geron Presents Positive Results

from Phase 2 Study of Imetelstat in Essential Thrombocythemia at the American Society of

Hematology Annual Meeting (Dec. 10, 2012).

58. While the abstract, presentation, and press release glossed over the potency of

imetelstat, in actuality Geron was alarmed by elevated liver enzyme levels reported for all

patients. Immediately upon treatment, every single patient experienced at least one abnormal


28 21


LFT. Most were Grade 1 to Grade 2 elevations in ALT or AST and four patients experienced

Grade 2 to Grade 3 elevations in ALT in combination with Grade 1 to Grade 3 elevations in

AST. With longer dosing, Grade 1 increases in ALP were observed in seven patients which was

associated with mostly Grade 1 and, in some cases, Grade 2 elevations in unconjugated bilirubin

in four of the patients. In certain patients, these elevations in ALP and bilirubin persisted for the

entire time they participated in the study. Geron never disclosed sufficient data for the public to

determine whether the combination of liver enzyme elevations resulted in any Hy’s Law cases,

but the Company vehemently denied that conclusion on two occasions during the Class Period.

59. In response to this data, Geron engaged several liver experts as consultants, to,

along with Geron’s internal safety staff, review the data in all liver-related serious adverse events

on an ongoing basis and determine whether the benefit/risk profile justifies continuation of the

ET/PV Trial. 3 On April 26, 2013, Geron disclosed that after the initial reviews, the expert panel

and Geron’s safety staff determined that the trial should continue and “there have been no

recommendations to change imetelstat dosing or use.” John A. Scarlett, CEO, Geron

Corporation, Q1 2013 Earnings Conference Call 4 (Apr. 26, 2013) (available from LexisNexis,

Inc.).

60. However, on the same conference call CEO Scarlett disclosed that Geron’s panel

of medical experts advised against initiating new studies of ET, presumably because the

observed hepatotoxicity created an unfavorable benefit/risk profile that did not justify further

development of this indication, at least in a patient population who had not failed or been

intolerant to other approved ET therapies, unlike the patients in Geron’s trial. Specifically,

Scarlett stated:

I’d like to briefly discuss why we’re not planning to advance clinical development of imetelstat in ET. Because of the high clinical and molecular response rates we observed in ET patients treated with imetelstat, we considered whether we should develop the drug for commercial use in this disorder. However, multiple medical experts advised us that ET patients are in fact adequately served by existing

3 The benefit/risk profile of a drug is the balance between the therapeutic efficacy and safety risks imposed by the drug.

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27


28 22


therapies. Therefore, they recommended that rather than pursuing an approval in ET that we pursue other hematologic myeloid malignancies such as MF where there is a clear unmet medical need for products that could be disease-modifying.

Id.

61. The panel’s investigation was completed in August 2013, and on a conference call

on August 8, 2013, CEO Scarlett announced that the “investigation was conducted in

collaboration with external liver experts that we engaged as consultants. We have now completed

the current investigation process. Based on the data from the investigation, the liver function test

abnormalities do not appear to progressively worsen over time and have not resulted in any

clinical sequelae.” John A. Scarlett, CEO, Geron Corporation, Q2 2013 Earnings Conference

Call 4 (Aug. 8, 2013) (available from LexisNexis, Inc.). Therefore, the Company continued

treating the 14 remaining ET patients.

62. As patients gradually left the ET/PV Trial, Geron did not follow up with any

patients or collect sufficient additional data to determine whether the persistent LFT

abnormalities resolved to normal or baseline when imetelstat was discontinued. After the Class

Period, Geron admitted this deficiency in its data, stating, “we don’t have the complete

information and data on today is what happens when patients dose reduce if you will to zero,

meaning that they come off of the drug.” John A. Scarlett, CEO, Geron Corporation, Geron

Conference Call to Discuss Clinical Hold Affecting Clinical Trials of Imetelstat 6 (Mar. 12,

2014) (available from LexisNexis, Inc.).

63. The significance of patient follow up cannot be overstated, for example, during

the ET/PV Trial, a patient who had cirrhosis developed hepatic encephalopathy in November

2013 and was promptly discharged from the trial. In late January 2014, the patient died from

esophageal variceal bleeding which the investigator determined could possibly be related to

imetelstat. Geron did not announce this death until June 4, 2014, months after the FDA imposed

a clinical hold on the ET/PV Trial as set forth below. See John A. Scarlett, CEO, Geron

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22 I 23

24

25

26


28 23

27


1

I Corporation, Geron at Jeffries Global Healthcare Conference 3-4 (June 4, 2014) (available from

2

LexisNexis, Inc.).

3

The Pilot Clinical Trial of Imetelstat in Patients with Primary or Secondary Myelofibrosis

4

64. In October 2012, long after—to the best of Plaintiff’s knowledge—Geron became

5

aware of the troubling safety data in the ET/PV Study, Dr. Ayalew Tefferi, M.D. at the Mayo

6

Clinic, began enrollment in an investigator-sponsored pilot study to evaluate safety and efficacy

7

of imetelstat in patients with primary myelofibrosis, post-ET myelofibrosis, or post-PV

8

myelofibrosis who have two to three risk factors (intermediate-2) or four or more risk factors

9

(high risk) as defined by the Dynamic International Prognostic Scoring System Plus (“DIPSS-

10

Plus”) (the “Myelofibrosis Trial”). See Imetelstat Sodium in Treating Patients With Primary or

11

Secondary Myelofibrosis, http://www.clinicaltrials.gov/ct2/show/NCT01731951?term=

12

imetelstat&rank=4 (last visited Sept. 17, 2014).

13

65. Myelofibrosis is a rare bone marrow cancer in which the marrow is replaced by

14

fibrous scar tissue. See Myelofibrosis Facts, 1 (Leukemia & Lymphoma Society ed., 2012). The

15

cancer can occur on its own, called “primary myelofibrosis,” or as a progression of other bone

16

marrow diseases such as ET or PV. See id. Myelofibrosis develops when a mutation occurs in

17

the DNA of a single blood-forming stem cell. As the mutated cell divides and replicates,

18

abnormal cell production eventually overtakes the bone marrow’s ability to produce enough

19

normal, healthy blood cells, which can result in severe anemia, weakness, bone pain, fatigue, and

20

increased risk of infection. See id. The abnormal growth of blood-forming cells can also take

21

place outside of the bone marrow, causing swelling in such organs as the liver, spleen, lungs,

22

lymph nodes, and spinal cord. See id. at 1-2.

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66. Similar to ET and PV, about 50% of people with MF have the V617F JAK2

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mutation. See id. at 2. There is currently no drug therapy that can cure myelofibrosis.

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Myelofibrosis is fatal and the median survival time is one to three years for intermediate cases

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and two years for high risk cases. See id. at 4. The treatment goal for most patients with

27

myelofibrosis is to relieve symptoms and reduce the risk of complications. Treatments include

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1

blood transfusions, chemotherapy, radiation or removal of the spleen, and stem cell

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transplantation. See id. at 1. Jakafi, developed by Incyte, is the first JAK inhibitor and currently

3

the only drug approved by the FDA to treat symptoms and signs of myelofibrosis, including an

4

enlarged spleen, night sweats, itching, and bone or muscle pain. See id. at 4.

5

67. The Myelofibrosis Trial was designed to determine whether imetelstat halts the

6

growth of cancer cells by blocking some of the enzymes needed for cell growth. See

7

Imetelstat Sodium in Treating Patients With Primary or Secondary Myelofibrosis,

8

http://www.clinicaltrials.gov/ct2/show/NCT01731951?term=imetelstat&rank=4 (last visited

9

Sept. 17, 2014). The primary objective was to test the overall response rate defined as a clinical

10

improvement (CI), partial remission (PR), or complete remission (CR) according to the

11

International Working Group for Myelofibrosis Research and Treatment (“IWG-MRT”) criteria.

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See id. The secondary objectives were to evaluate the safety and tolerability of imetelstat, to

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evaluate the efficacy of imetelstat in the reduction of spleen size, as measured by physical

14

examination, and to evaluate the efficacy of imetelstat in inducing red blood cell transfusion-

15

independence in previously transfusion-dependent patients. See id.

16

68. During the trial imetelstat is administered through a two-hour intravenous

17

infusion to patients in multiple patient cohorts. See Geron, Prospectus Supplement (Form

18

424B5) S-5 (Jan. 30, 2014). In the first cohort, Cohort A, imetelstat is given once every three

19

weeks. See id. In the second cohort, Cohort B, imetelstat is given weekly for four weeks,

20

followed by one dose every three weeks. See id. Under the protocol, patients in Cohorts A and

21

B may receive an intensified dosing regimen, up to once per week after the initial six cycles of

22

treatment. The starting dose of imetelstat in Cohorts A and B is 9.4mg/kg, with dose reductions

23

and dose holds allowed for toxicity. See id. A total of 79 patients were ultimately enrolled in the

24

trial. See id. at S-6.

25

69. The preliminary results of the Myelofibrosis Trial were released in an abstract

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I published on November 7, 2013 and further explained in presentations given by Dr. Tefferi and

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Geron at the 55th Annual Meeting of ASH on December 9, 2013. The data showed an overall

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1

response rate of 40.9%, representing 9 out of 22 patients, with remissions observed in 5 out of 22

2

patients and clinical improvement by the IWG-MRT criteria observed in the other 4 out of 22

3

patients. See id. at S-7. In regard to safety, Geron reported that myelosuppression was the

4

principal dose-limiting toxicity, consistent with Geron’s purported observations in previous

5

imetelstat studies. See id. at S-9. During the Myelofibrosis Trial, however, more persistent and

6

profound myelosuppression was observed with imetelstat administered on a weekly basis. This

7

included one case of febrile neutropenia after prolonged myelosuppression with intracranial

8

hemorrhage resulting in patient death, which was assessed as possibly related to imetelstat by the

9

investigator. See id.

10

70. During this same January presentation, Geron announced its intention to launch a

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Company-sponsored, multi-center Phase 2 trial of imetelstat in myelofibrosis sometime in the

12

first half of 2014. See id. The purpose of the trial would be to identify a dosing regimen to

13

optimize the benefit-risk profile and to define and validate components of a remission endpoint

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for a randomized Phase 3 trial to support potential FDA approval. See id.

15

Geron’s January 2014 Stock Offering

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71. On January 30, 2014, shortly after the favorable efficacy data from the

17

Myelofibrosis Trial led to a class period high of $5.55 per share, Geron issued a press release

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announcing the pricing of an offering of 22,500,000 shares of common stock at $4.00 per share

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for gross proceeds of $96.7 million, before underwriting discounts, commissions, and other

20

offering expenses. Geron represented that it “intends to use the net proceeds from this public

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offering to fund research and development, including the company's planned Phase 2 clinical

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trial of imetelstat in myelofibrosis, and for working capital and general corporate purposes.” See

23

Press Release, Geron Corporation, Geron Corporation Announces the Pricing of its Public

24

Offering of Common Stock (Jan. 30, 2014).

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The FDA’s Clinical Holds

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72. On March 12, 2014, Geron announced that it received verbal notice from the FDA

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that its IND for imetelstat had been put on full clinical hold. The Company explained that

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[t]he clinical hold affects the remaining eight patients in the company’s Phase 2 study in essential thrombocythemia (ET) or polycythemia vera (PV) and the remaining two patients in the company’s Phase 2 study in multiple myeloma. In addition, the company’s planned Phase 2 clinical trial in myelofibrosis will likely be delayed due to the clinical hold. It is possible that other studies using imetelstat, such as ongoing investigator-sponsored trials, may also be placed on clinical hold by the FDA. . . .

[T]he FDA indicated that the clinical hold is due to the occurrence of persistent low-grade liver function test (LFT) abnormalities observed in the Phase 2 study of imetelstat in ET/PV patients and the potential risk of chronic liver injury following long-term exposure to imetelstat. The FDA expressed concern about whether these LFT abnormalities are reversible .

Press Release, Geron Corporation, Geron Announces IND Clinical Hold Affecting Clinical

Trials of Imetelstat in Essential Thrombocythemia and Multiple Myeloma (Mar. 12, 2014).

73. Shortly thereafter, on March 20, 2014, Geron announced that the FDA issued a

partial hold on the Myelofibrosis Trial, stating “that patients currently enrolled in the

investigator-sponsored clinical trial of imetelstat in myelofibrosis (Myelofibrosis IST) who are

deriving clinical benefit may continue imetelstat treatment under a partial clinical hold placed by

the U.S. Food and Drug Administration (FDA)” however, “no new patients may be enrolled into

the Myelofibrosis IST, and patients currently enrolled must demonstrate that they are deriving

clinical benefit in order to continue taking imetelstat.” Press Release, Geron Corporation, Geron

Reports Myelofibrosis IST Placed on Partial Clinical Hold (Mar. 20, 2014). Geron explained

that “the FDA cited the reason for the partial clinical hold was that a safety signal of

hepatotoxicity had been identified in clinical trials of imetelstat, and that it is not known if this

hepatotoxicity is reversible.” See id.

74. The full clinical hold on the imetelstat IND is still in place as of the date of this

Complaint, although, on June 12, 2014 Geron announced that the FDA has lifted the clinical hold

on the Myelofibrosis Trial because Dr. Tefferi provided sufficient information to address the

FDA’s concerns with respect to the Myelofibrosis Trial. See Press Release, Geron Corporation,

Geron Reports Removal of Partial Clinical Hold on Myelofibrosis IST (June 12, 2014).

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CLASS PERIOD STATEMENTS

75. The Class Period begins on December 10, 2012. On this day, the Company

issued a press release entitled “Geron Presents Positive Results from Phase 2 Study of Imetelstat

in Essential Thrombocythemia at the American Society of Hematology Annual Meeting,” which

stated in relevant part:

The results from the first 14 patients enrolled in the ET study were reported. All were refractory to or intolerant of conventional therapies . . . Platelet counts were reduced in all patients (a 100% hematologic response rate) and normalized in 13 out of 14 patients (a 92.9% complete response rate). The allelic burden of the JAK2 V617F gene mutation decreased over time in the seven patients who had such a mutation, with substantial reductions that qualified as partial molecular responses achieved in six out of seven (85.7%) patients within three to six months of treatment with imetelstat.

In the study, imetelstat was generally well tolerated. The majority of the non- hematologic adverse events were mild-to-moderate in severity, the most frequent being gastrointestinal events. No drug-related Grade 4 non-hematological adverse events were reported. Neutropenia was the most frequently reported hematologic abnormality. Two patients had Grade 4 neutropenia, but no cases of febrile neutropenia were reported. No thromboembolic events or bleeding events associated with thrombocytopenia were reported.

76. A hyperlink to a copy of the presentation slides, including the excerpts in ¶ 56

I preceding, was included in the press release.

77. Defendants’ statements in ¶¶ 75-76 were materially false and misleading when

made because Defendants knew and/or recklessly disregarded and failed to disclose the

following:

a)

b)

c)

Data from the ET/PV Trial of imetelstat indicated that imetelstat caused persistent

hepatotoxicity in trial patients;

Data from the ET/PV Trial of imetelstat demonstrated that patients faced a risk of

chronic DILI;

Geron only followed up with patients experiencing LFT abnormalities who

discontinued the ET/PV Trial for 30 days rather than following up with them until

the abnormal LFT results resolved to normal or baseline; and

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1 d)

Geron lacked evidence to determine whether the hepatotoxicity caused by

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imetelstat was reversible.

78. On January 10, 2013, Geron presented the results of its ET/PV Trial at the 31st

Annual J.P. Morgan Healthcare Conference. During the presentation, CEO Scarlett stated, in

relevant part:

Now the result in the hematologic response rate was absolutely outstanding. We presented this data at ASH, American Society of Hematology, in December. And we got a really terrific reception; it was a podium presentation and was named to the Best of ASH by the organizers. And that was because we saw a complete hematologic response in 13 out of 14 patients. The mean time to that complete response was only six weeks. And I think very importantly this has turned out to be quite a durable response. So today 13 out of 14 of the original patients remain on therapy, six patients have reached the one-year mark and remain on drug. The mean time on therapy is eight months and in fact we have one patient entering their third year of treatment. So it has been very well tolerated.

* * *

The side effect profile of the product is pretty much what you would expect. We do see neutropenia and we certainly have mild to moderate other non-hematologic adverse events. But as I said before, we -- the patients have certainly tolerated it well and 13 out of the 14 patients continue on the therapy, many of them for a long period of time.

79. Defendants’ statements in ¶ 78 were materially false and misleading when made

I because Defendants knew and/or recklessly disregarded, and failed to disclose the following:

a) Data from the ET/PV Trial of imetelstat indicated that imetelstat caused persistent


b) Data from the ET/PV Trial of imetelstat demonstrated that patients faced a risk of

chronic DILI;

c) Geron only followed up with patients experiencing LFT abnormalities who



d) Geron lacked evidence to determine whether the hepatotoxicity caused by


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80. On March 6, 2013, Geron presented at the Cowen and Company 33rd Annual

Health Care Conference. In regard to Geron’s ET/PV Trial for imetelstat, CFO Bloom stated, in

relevant part:

The results that we reported were both positive in hemalogic as well as molecular responses. For the hemalogic responses, we reported reduced platelet counts in all 14 patients. Importantly, 13 out of the 14 patients reached a complete response and the remaining 14 patients reached a partial response. The median time to complete response was six weeks.

Even more interesting than that hemalogic responses have been the molecular responses that we have seen in this trial. For the molecular responses, the Allelic Burden decreased in all seven patients who had the JAK2 V617F gene mutation. Even more significant was that six out of the seven patients or 86% reached a partial molecular response.

Overall, the drug has been also well tolerated in this study. The majority of non-hemalogic adverse events were mild to moderate and under lab abnormalities, neutropenia was the most frequently reported hemalogic abnormality. Also, most patients had at least one abnormal liver function test and the majority were mild to moderate.

81. In regard to the Myelofibrosis Trial, CFO Bloom stated:

Well, you are correct that we are not running our own trial, we are not running our own clinical trial in MF, but I guess I wouldn't say that we are not doing anything. There's obviously a lot of exploratory work that is still ongoing because of that as well as constant communication with him to understand what is happening there. . . .

So the question was how comfortable do we feel with Doctor Tefferi as we are trying to identify the proper dose and dosing schedule. . . . So as I said, he has been a very good collaborator of ours and we have very good communications with him.


because Defendants knew and/or recklessly disregarded, and failed to disclose the following:




chronic DILI;

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1 c)

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83. On March 13, 2013, Geron hosted a conference call to discuss its 2012 annual

financial results. In regards to Geron’s ET/PV Trial, then CMO Kelsey stated in relevant part:

As of the latest data cut for safety from the first 16 patients in the trial, long-term administration of imetelstat was generally well-tolerated. Of those 16 patients, 15 patients remain in the trial and no patients have discontinued due to adverse events. The majority of the non-hematologic adverse events were mild to moderate in severity, with the most frequently reported being gastrointestinal events, infections, muscular and joint pain and fatigue. . . . No drug-related, non-hematologic Grade 4 adverse events were reported. . . .

At least one abnormal liver function test was observed in most patients. The majority were Grade 1 or Grade 2 elevations in ALT or AST, reversible Grade 2 to Grade 3 elevations in ALT with Grade 1 to Grade 3 elevations in AST were observed in four patients within a few weeks of starting imetelstat. These abnormalities resolved and did not reoccur with ongoing imetelstat treatment. With longer dosing, Grade 1 increases in alkaline phosphatase were observed in seven patients. Associated with mostly Grade 1 and, in some cases, Grade 2 unconjugated hyperbilirubinemia in four of the patients. The etiology of this is unclear and is currently being further investigated .

* * *

[Analyst]: Okay. And just to follow up on that, the little bit increase as you talked about, was that on the ASH update and...

[Kelsey]: Well, we – here is the issue. The reason we’re doing this is because when we presented the data in December at ASH, we basically had to get the pertinent data into 12 slides, and we focused largely on the efficacy data, the clinical responses, the molecular responses. I think we have two slides on safety. And I don’t think that the two slides that we presented on safety didfull justice to the clinical picture. We did present at ASH that there were rises in alanine transaminase and aspartate transaminase. What we did – what we have not observed at the time of the ASH meeting. And I think where you're – just to really get to the meat of your question, what we had not observed at the time of the ASH presentation were the increases in alkaline phosphatase that have been observed with chronic dosing . . . .

[Analyst]: Were any of these patients Hy’s Law patients as a result?

[Kelsey]: No. No. No. None of them fulfill the criteria for Hy’s Law or really meet any criteria for hepatocellular damage. There were two distinct

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clinical pictures. The immediate rises in alanine transaminase appear to be self-limiting and have been observed with drugs where there is some sort of compensation that occurs with continued dosing and the alanine transaminase tends to resolve. I have really no idea what the rises in alkaline phosphatase are due to. We were initially concerned because they were associated with an increase in bilirubin, but it turns out that the increase in the bilirubin is almost

all unconjugated bilirubin and that is not consistent with the clinical picture of cholestasis . And so, we need to spend a lot more time digging that out.






chronic DILI;






85. On March 15, 2013, Geron filed its annual report on Form 10-K for the fiscal year

2012 (“2012 Form 10-K”), signed by defendant Bloom; defendant Scarlett elected to not sign the

2012 Form 10-K. In regard to the safety data from the ET/PV Trial, the 2012 Form 10-K stated,

in relevant part:

The Phase 2 trial of imetelstat in ET was a multi-center, single arm, open-label study designed to provide proof-of-concept for the potential use of the drug as a treatment for hematologic myeloid malignancies, including MF, myelodysplastic syndromes and acute myelogenous leukemia. . . .

As of the latest data cut for safety using the information available from the first 16 patients in the trial, long-term administration of imetelstat was generally well tolerated. Of those 16 patients, 15 patients remain in the trial, and no patients have discontinued due to adverse events. The majority of the non-hematologic adverse events were mild-to-moderate in severity with the most frequently reported non-laboratory test findings being gastrointestinal events, infections, muscular and joint pain and fatigue. . . .

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At least one abnormal liver function test was observed in laboratory findings in all 16 patients. Early onset, self-limiting, mild (Grade 1) increases in alanine aminotransferase were observed with accompanying mild (Grade 1) increases in aspartate aminotransferase; the latter frequently persisted with ongoing imetelstat treatment . With longer dosing, new onset, mild (Grade 1) increases in alkaline phosphatase were observed in seven of 16 patients, associated with mostly mild (Grade 1) to some moderate (Grade 2) unconjugated hyperbilirubinemia in four patients. Within a few weeks after starting imetelstat treatment, in four patients, a transient increase in alanine aminotransferase of five (Grade 2) to seven (Grade 3, or severe) times the standard upper limit, with concurrent increase in aspartate aminotransferase of two (Grade 1) to six (Grade 3) times the standard upper limit, was observed. These abnormalities resolved and did not re-occur with ongoing imetelstat treatment.

86. Moreover, the 2012 Form 10-K contained certifications pursuant to the Sarbanes-

Oxley Act of 2001 (“SOX”) signed by CEO Scarlett and CFO Bloom stating that “the

accompanying annual report on Form 10-K of the Company for the year ended December 31,

2012 [] fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of

the Securities Exchange Act of 1934” and “the information contained in the Report fairly

presents, in all material respects, the financial condition and results of operations of the

Company.” Defendants Scarlett and Bloom further signed a separate certification stating, in

relevant part:

1. I have reviewed this annual report on Form 10-K of Geron Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report ;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us

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by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


made. Defendants knew and/or recklessly disregarded, and failed to disclose the following:




chronic DILI;




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d)



88. On April 26, 2013 Geron hosted a conference call to discuss its financial results

for the first quarter of 2013. In regard to the ET/PV Trial for imetelstat, defendant Scarlett

I stated, in relevant part:

I’d like to also comment on the status of our ongoing investigation into the liver function test observations from the ET study that we discussed on our year-end conference call in March. In an initial review of data from all of our other non-ET imetelstat trials, we found the patterns observed in the ET study were also observed in our non-ET studies, but with varying frequency. No cases of Hy’s Law have been observed and no new safety signals have emerged from this ongoing investigation . We have engaged several liver experts as consultants, and based on their initial reviews, there have been no recommendations to change imetelstat dosing or use. We expect to conclude this investigation by the time of our next quarterly conference call .



a)


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chronic DILI;

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90. On May 3, 2013, Geron filed its Form 10-Q for the quarter ending March 31,

2013 (the “1Q 2013 Form 10-Q”), signed by defendant Bloom; defendant Scarlett elected not to

sign the 1Q 2013 Form 10-Q. The 1Q 2013 Form 10-Q contained a SOX certification signed by

defendants Bloom and Scarlett, as well as a separate certification containing the same form and

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content as the 2012 Form 10-K, set forth in ¶ 86, preceding, except for the period of the report.

In regard to Geron’s ET/PV Trial, the 1Q 2012 Form 10-Q stated, in relevant part:

Top-line data from the essential thrombocythemia, or ET, Phase 2 trial that we presented in December 2012 at the American Society of Hematology, or ASH, annual meeting showed durable hematologic and molecular responses in patients, suggesting that imetelstat inhibited the progenitor cells of the malignant clone believed to be responsible for the underlying disease in a relatively selective manner. The Phase 2 trial of imetelstat in ET is no longer enrolling patients and we are continuing to treat and follow patients previously enrolled in the trial .






chronic DILI;






92. On May 22, 2013, Geron held its 2013 Annual Meeting of Stockholders during

which defendant Scarlett stated, in relevant part:

I think that the only other thing that I will comment on is the safety or side effect profile of the drug in this type of disease. By and large, the drug has been very well tolerated. There have been some, what I would call, interesting initial observations of some liver function test abnormalities; however, they have not gone on to more severe situations.

We’ve engaged a bunch of liver experts, and none of them have made any recommendations to change what we’re doing, change the way the drug is used or dosed. So I think we’re feeling pretty comfortable about that. And other than that, we see the usual side effects associated with drug like this that would have an effect on stem cells and progenitor cells. We see a lowering initially of platelets and white blood cells, but those recover after the drug is no longer given.

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chronic DILI;






94. On June 16, 2013, Geron issued a press release entitled “Updated Results from

Geron’s Imetelstat Phase 2 Proof-of-Concept Trial in Essential Thrombocythemia Presented at

the European Hematology Association Congress,” which stated in relevant part:

Imetelstat Continues to be Well Tolerated with No New Safety Signals Reported; No Patients Have Discontinued Treatment Due to Drug-Related Adverse Events

The updated results, which showed robust hematologic and molecular responses in patients treated with imetelstat, included data for an additional six months of treatment and follow-up for the original 14 patients, as well as data from four additional patients enrolled in the trial after the data cut-off for the ASH presentation . . . .

Platelet counts were reduced in all patients (a 100% hematologic response rate) and normalized in 16 out of 18 patients (an 89% complete response (CR) rate). The JAK2 V617F gene mutation was detected in eight patients. Seven out of the eight (88%) patients achieved 72% to 96% reductions in JAK2 V617F allele burden that qualified as partial molecular responses (PRs) within three to 12 months of treatment with imetelstat. . . .

As of May 2013, a total of four ET patients have discontinued study treatment. The reasons cited for discontinuation include frequency of imetelstat treatment that was required to maintain a response (n=1), co-morbid conditions/social issues (n=2) and convenience issues (n=1).

* * * In the trial, long-term administration of imetelstat was generally well tolerated. There were no new safety signals observed in the six-month update, and no

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patients discontinued the trial due to drug-related adverse events. The majority of the non-hematologic adverse events were mild-to-moderate in severity, the most frequent assessed as imetelstat-related by investigators being gastrointestinal

events and fatigue. No drug-related Grade 4 non-hematologic adverse events were reported. . . .

At least one abnormal liver function test (LFT) was observed in laboratory findings in all patients. The majority were Grade 1 elevations in alanine aminotransferase (ALT) and aspartate aminotransferase (AST); two Grade 3 increases in ALT/AST were reversible on dose reduction. With longer dosing, Grade 1 increases in alkaline phosphatase were observed, associated with mostly Grade 1 to some Grade 2 unconjugated hyperbilirubinemia. LFT abnormalities do not appear to progressively worsen over time. No liver injury symptoms were reported and no patients discontinued study treatment due to enzyme elevations.

95. A hyperlink to a copy of the presentation slides was included in the press release.

The slides stated, in relevant part:

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• Patients have been treated with imeteistat for a median of 14 months (range 3rnn - 2.5yr) • 13 of the 16 patients (81.3%) with a hematologic CR remain on treatment • 1 of 2 patients with a hematolog ic PR remains on treatment • The median duration of response has not been reached

S. I I. S.

Time to 1Platelet Co us 400 x 103 /IiJ Is [•Time tOCR

ONoCR 4 Remains orLTretheIt

MA

I.

• UI Is

• S 01

-I 11

S

2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Month

P. 12. No PD but tre atment termina ti on related to nea r-weekly do ~ing required to maintain PR

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All Grades/ Grade 3 /

All Events All Events

61 Events (Nusa/DirrheaJConsription/Vomiting)

Fatigue

Headache

Decreased Appetite

Musculoskeletal Disorders (Pain)

Bleeding Events

Infusion Reactions

Pyrexia

Chills

Infections

Dizziness

Cough

Grade 3 post-operative hemorrhagic anernia/ epistads No thrornbomboIic events

"Grade 3 syncope; patient remains on treatment

Two Grade 4 AEs unrelated to imetdstt — Influenza No Grade 5 AE

Laboratory Parameter (N20) All Grades Grade 3 Grade 4

ALT 18 (90%) 2(10%) 0

AST 18(90%) 1(5%) 1 0

Alkaline phosphatase (ALP) - 13(65%) - - 0

BiIftubin total 6(30%) 0 o

Neutropera 15(75%) 8(40.0%) 3(15%)

Anemia 17 (85%) 3(15%) 0

Thrombocytoperii 1 11(55%) 1(5%) 0

'sift from baseline

Hepatic enzyme abnormality patterns observed

- Majority were Grade 1 elevations in ALT/AST; 2 pts Grade 3 increases in ALT/AST were reversible on dose

reduction

- Serial Grade 1 ALP increase with primarily uneonjugated Grade 1 hyperbilirubinemia observed

- No liver injury symptoms reported; no patients discontinued study treatment due to enzyme elevations

- Investigation and monitoring of these safety signals are ongoing

No cases of febrile neixtropenia were reported


CA NO. 3:14-CV-01224 (CRB)

Adverse Event Frequency (N20)

18 El +2 PV

All Grades / Grade 3 / R1itd R&atd

18(90%)

(I

16(80%)

2(10%)

10(50%)

1(5%)

8(40%)

0

8(40%)

0

7(35%)

0

7 (35%)

1(S%)

5(25%)

a

5(25%)

0

S 25%)

4(20%)

a

2(10%)

0

18(90%)

0

17(85%)

2(10%)

12(60%)

9(45%)

0

15(75%)

1(5%)

12(60%)

2 (1O%)

) (35%)

lot (5%)

9(45%)

C

8(40%)

0

19(95%)

3(15%)

11(55%)

0

(45%)

0



made because Defendants knew and/or recklessly disregarded, and failed to disclose the

following:




chronic DILI;






97. On August 8, 2013, Geron issued a press release entitled, “Geron Corporation

Reports Second Quarter 2013 Financial Results,” which stated in relevant part:

In June 2013, Geron presented updated clinical results from the Phase 2 trial of imetelstat in patients with essential thrombocythemia (ET) at the Congress of the European Hematology Association (EHA). The data showed durable hematologic and molecular responses in patients, suggesting that imetelstat inhibited, in a relatively selective manner, the progenitor cells of a malignant clone believed to be responsible for the underlying disease . The Phase 2 trial of imetelstat in ET is no longer enrolling new patients, but the company continues to treat andfollow patients previously enrolled in the trial.






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1 c)

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99. On August 8, 2013, Geron filed its Form 10-Q for the quarter ending June 30,

2013 (the “2Q 2013 Form 10-Q”), signed by defendant Bloom; defendant Scarlett elected to not

sign the 2Q 2013 Form 10-Q. The 2Q 2013 Form 10-Q contained a SOX certification signed by

defendants Bloom and Scarlett, as well as a separate certification containing the same form and

content as the 2012 Form 10-K, set forth in ¶ 86, preceding, except for the period of the report.

In regard to Geron’s ET/PV Trial, the 2Q 2012 Form 10-Q stated, in relevant part:

Top-line data from the essential thrombocythemia, or ET, Phase 2 trial that we presented at the American Society of Hematology, or ASH, annual meeting in December 2012 and at the Congress of the European Hematology Association in June 2013 showed durable hematologic and molecular responses in patients enrolled in the ET Phase 2 trial, suggesting that imetelstat inhibited the progenitor cells of the malignant clone believed to be responsible for the underlying disease in a relatively selective manner. The Phase 2 trial of imetelstat in ET is no longer enrolling patients, and we are continuing to treat and follow patients previously enrolled in the trial.






chronic DILI;






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101. The same day Geron hosted a conference call to discuss its financial results for

the second quarter of 2013. In regard to Geron’s ET/PV Trial, defendant Scarlett stated:

As of the May 2013 data cut off for EHA, the median time on imetelstat treatment was 14 months ranging from three months to 2.5 years. The updated data were consistent with the high hematologic and molecular response rates reported at ASH. In addition, since the hematologic and molecular responses were maintained in patients on treatment, imetelstat appears to have good durability to its effects on the disease. The ET trial has been closed to further patient enrollment, but we continue to treat and follow patients previously enrolled in the trial.

Long-term administration of imetelstat was generally well tolerated in this trial. There were no new safety signals observed in the six-month update , and no patients discontinued from the trial due to drug-related adverse events.

On our last quarterly call, we discussed our internal investigation into liver function test observations in the ET trial. The investigation was conducted in collaboration with external liver experts that we engaged as consultants. We have now completed the current investigation process.

Based on the data from the investigation, the liver function test abnormalities do not appear to progressively worsen over time and have not resulted in any clinical sequelae. No patients discontinued study treatment due to the liver biochemistry abnormalities. Based on the conclusions from the investigation, the external liver experts recommended no changes to the use or administration of imetelstat .






chronic DILI;






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103. On September 11, 2013, Geron presented the data from its ET/PV Trial at the

Stifel Nicolaus 2013 Healthcare Conference. The presentation slides stated in relevant part:

eion

imeteistat's safety profile in El

generally well tolerated for up to 2.5 years*

Toxicity is primarily hematologic • three patients had Grade 4 neutropenia (no cases of febrile neutropenia) • no tliromboembolic events or bleeding events associated with

thrombocytopenia reported

Non-hematologic adverse events (AES) o most frequent assessed as imetelstat related by investigators were

gastrointestinal events and fatigue - majority mild-to-moderate (Grade 12) - no drug-related Grade 4 AEs

*13 of the iS patients {81.3%) with a hematologic CR remain on treatment *me di an time on therapy; 14 months (range 3 months - 2.5 years)

#439 (Garit BerIncker)


28 43

27


0 — eron

imeteistat development in 2013 and beyond ........................................................................................................................................................

Li Data from myelofibrosis 1ST expected at ASH in

December 2013

upcoming Li If positive data from myelofibro5is 1ST, expect to

events initiate Gerori-sponsored multi-center clinical trial

in 1H14

U Pilot studies expected in other hematologic

myeloid malignancies, such as MDS

104. While giving the presentation, defendant Scarlett stated in relevant part:

It is quite potent. It has quite a long half-life in bone marrow, spleen and liver , as well as some tumor types, which is quite important. . . .

100% hematologic response rate, everybody responded. One patient didn’t quite get their platelets into the normal range, so they were a PR. Everybody else got their platelets into the normal range, so they were complete responses.

It was rapid. The median time to CR was six weeks. It’s been very durable. . . .

The molecular response rate was quite impressive, and it was very durable, and I think that that's really probably the most important quality in that it certainly suggested that that the underlying malignant clone was really being suppressed by the drug. . . .

So this is ----- that and the safety profile is what encouraged us to move forward into MF . So the safety profile ---- the toxicity of this drug is primarily hematologic . Three patients in this study had Grade 4 neutropenia. There were no thromboembolic or bleeding events associated with thrombocythemia. All these patients respond to a hold of the drug or in some cases a dose reduction. And the non-hematologic adverse events are quite unimpressive, a little bit of GI, mild to moderate, usually Grade 1 to 2, and we have no non-hematologic drug-related Grade 4 AEs. So it's been actually very well tolerated . . . .

Well, ET, we, first of all, decided not to do as a commercial product. When you look at it, you kind of come to the conclusion it’s pretty expensive to take it

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forward. We have to have very long, very large studies. The unmet medical need is pretty modest. Frankly, you can treat patients quite well -- the majority of patients get treated well with hydroxyurea and so forth.

* * * So we did not want and we did not ever want to screw up Ayalew Tefferi’s opportunity to tell his side of the story, if you will, or his results at a major meeting. And that’s a good way to do it is in an ISP to start blabbing about it. So that’s the reason we are playing coy. Of course, we know what’s going on, and of course, we are being very attentive to what's going on.



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following:

a)

b)

c)

d)

106.




chronic DILI;






Confirming the misleading nature of Defendants’ statements pertaining to

development of imetelstat, equity analysts continued to report positive outlook for the future of

the drug. For example, a November 1, 2013 Piper Jaffray analyst report stated:

We recently hosted Geron for meetings with investors and as a result of this and other diligence we have enhanced conviction on the underlying rationale and emerging data supporting broad imetelstat potential in multiple myeloproliferative neoplasms (MPNs) such as myelofibrosis (MF) and potentially AML. . . .

We are encouraged by the recent developments for imetelstat in MF, leading to our August upgrade, and some of this potential has been priced in, we think. That said, we believe the imetelstat risk/reward remains positive based on our conversations with investors and other diligence. The most compelling evidence, in our view, besides the continuation and expansion of the IST in MF itself, is the prior data in ET. We believe that a number of patients remain on imetelstat


28 45

27


for over 3 years from this study, despite occasion dose reductions/holidays, which suggests to us ongoing activity and tolerability .

107. On November 7, 2013, ASH published the abstract featuring preliminary data

from the Myelofibrosis Trial of imetelstat in advance of the annual meeting in December. In

regard to toxicity of imetelstat, the abstract stated the following:

At a median f/u of 3.2 months, 16 (89%) patients remain on treatment; the two discontinuations were from unrelated death and disease progression. In cohort A, there were no grade-4 treatment-related adverse events; grade-3 events were limited to thrombocytopenia in 27% and anemia in 9%. In cohort B, two (29%) patients experienced grade-4 thrombocytopenia; grade-3 events were limited to thrombocytopenia, neutropenia and anemia in one patient each. Dose reduction was necessary in only two (11%) patients because of grade 3 or 4 myelosuppression.

108. In regard to the efficacy of imetelstat, the abstract stated in relevant part:

Overall response rate was 44%. This included five (28%) patients who met the BM and peripheral blood morphologic criteria for CR ( n=4) or PR (n=1) and 3 patients with clinical improvement, pending validation of response duration and resolution of drug-induced grade-1 thrombocytopenia. The four (22%) CR patients experienced reversal of BM fibrosis and recovery of normal megakaryocyte morphology. Two CR patients were transfusion-dependent at baseline and became transfusion-independent. Complete molecular responses were documented in 2 CR patients: one had U2AF1 Q157P and 10% JAK2V617F and the other SF3B1 K666E and 50% JAK2 V617F. A third CR patient had a >50% reduction in U2AF1 469_insAGTATG mutation. Among 13 patients with leukocytosis, 10 (77%) normalized their count or had >50% reduction. Eleven (61%) patients had complete or partial resolution of leukoerythroblastosis.

109. On the same day, Geron issued a press release entitled, “Geron Corporation

Reports Third Quarter 2013 Financial Results,” which stated in relevant part:

John A. Scarlett, M.D., Geron’s Chief Executive Officer commented, “Pending additional input from regulators, investigators and other experts, as well as further potential insights from the ongoing IST, we expect to initiate a Geron sponsored, multi-center trial of imetelstat in MF in the first half of 2014 .”

110. Defendants’ statements in ¶¶ 106 & 109 were materially false and misleading

when made because Defendants knew and/or recklessly disregarded and failed to disclose the

following:



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1 b)

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3 c)

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chronic DILI;




d)



111. Also on November 7, 2013, Geron filed its Form 10-Q for the quarter ending

September 30, 2013 (the “3Q 2013 Form 10-Q”), signed by defendant Bloom; defendant Scarlett

elected to not sign the 3Q 2013 Form 10-Q. The 2Q 2013 Form 10-Q contained a SOX

certification signed by defendants Bloom and Scarlett, as well as a separate certification

containing the same form and content as the 2012 Form 10-K, set forth in ¶ 86, preceding, except

for the period of the report. In regard to the safety of imetelstat, the 3Q 2012 Form 10-Q stated,

in relevant part:

Any future Geron-sponsored clinical trial in patients with MF will take into consideration the available safety and efficacy results from the Myelofibrosis IST, as well as any previous or current Geron-sponsored clinical trials and other investigator-sponsored trials of imetelstat, and will be necessary for future clinical development of imetelstat in MF. Although observed toxicities and other safety issues have not resulted to date in an unacceptable benefit-risk profile in our Phase 2 clinical trials of imetelstat in ET or multiple myeloma, or in the Myelofibrosis IST, if there are safety results that cause the benefit-risk profile to become unacceptable with respect to patients enrolled in clinical trials of imetelstat conducted now or in the future by us or any independent investigator, including the Myelofibrosis IST, we would likely be delayed or prevented from advancing imetelstat into further clinical development .






chronic DILI;

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1 c)

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3

4 d)






113. On November 7, 2013, Geron also hosted a conference call to discuss its financial

results for the third quarter of 2013. In regard to the safety and development of imetelstat,

Defendants stated, in relevant part:

[Scarlett]: We plan to move forward with further development of imetelstat in MF. Pending additional input from regulators, investigator and other experts, as well as further insights from the additional and updated safety and efficacy data that we presented at ASH, we expect to initiate a Geron-sponsored multi-center trial with imetelstat in the first half of 2014 .

In the first quarter of next year, we expect to give guidance regarding the key endpoints, scope, design and timing for this Geron-sponsored study in MF, as well as further elaboration on the development and registration plan for imetelstat in this indication .

* * * [Bloom]: Well, because there are many details and many variations within a particular trial design and scope, it would be difficult for me to even probably give you a range without being potentially inaccurate. So, I would want to just refrain until we have that design and scope as Chip identified, which will be in the first quarter of next year .

* * * [Analyst]: Okay. And in terms of prior reporting of the data, we had seen some elevations of liver function, that’s alkaline phosphatase low-grade. There was no mention of any of these in the abstract. Is this something that was not seen or is this something that we just have to wait for the presentation in order to find that?

[Scarlett]: I think I invite you to come to the ASH abstract presentation. I don’t know if that will be part of it or not, but we certainly can’t comment today.





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1 b)


2

chronic DILI;

3 c)


4



d)



115. In response to this news, the price of Geron stock skyrocketed $1.52, or more than

44%, to close at $4.92 on November 7, 2013.

116. On December 4, 2013, Geron presented at the 25th Annual Piper Jaffray

Healthcare Conference. In regard to imetelstat, defendant Scarlett stated:

And so we elected first before I ever got to the company to study a wide disease that is capable of transforming into myelofibrosis which is essential thrombocytopenia ET. The results there were quite stunning, not only that we have a very high degree of complete hematologic remissions, meaning the platelet counts came down for many million and in some cases to normal, but even more impressive, we saw that the allelic burden of the JAK2 V617F mutation was reduced substantially in most patients in human could be measured. . . .

We took that data to [Dr. Tefferi] and said what you think, you said I think this is exactly the kind of drug that I would like to study. We have a lot of confidence in him as a clinician. We felt like we needed to take it very slow it first because again as the potential for myelosuppression. And so we started the study, it was done as an ISP, but nevertheless we were obviously in very close communication with Dr. Tefferi throughout the course of the study and continue to be.

* * * And we chose a single site study and the reason we chose that was again the concerns around the need to seal [sic] our way into the treatment of this disease with a drug that was obviously very potent and have the potential in a patient with a compromised marrow for causing significant depression. So one of our goals was to feel our way into that and to not have five investigators enrolling patients all at the same time . . .

[Analyst]: So it sounds like it was really driven by some consideration as to being an unknown paradigm and potential toxicities ....

[Scarlett]: Right .




CA NO. 3:14-CV-01224 (CRB)

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1

a) A patient in the ET/PV Trial of imetelstat had cirrhosis and was discharged from

2

the trial after developing hepatic encephalopathy;

3

b) Data from the ET/PV Trial of imetelstat indicated that imetelstat caused persistent

4


5

c) Data from the ET/PV Trial of imetelstat demonstrated that patients faced a risk of

6

chronic DILI;

7

d) Geron only followed up with patients experiencing LFT abnormalities who

8


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e) Geron lacked evidence to determine whether the hepatotoxicity caused by

11


12

118. The following day, on December 5, 2013, the price of Geron stock reached a

13

Class Period high, closing at $5.55 per share.

14

119. On December 9, 2013, Geron presented the preliminary results from the

15

Myelofibrosis Trial at the 55th Annual Meeting of ASH. In regard to the safety of imetelstat the

16

presentation slides stated:

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All grade 3/4 extramedullary adverse events not related to myelosuppression

(includes II events regardless of attribution)

Fatigue 3(9%)

1 (5%) 2(14%)

A-fib 2(6%)

2(11%)

ALP 2(6%

1(5%) 1 (7%)

Heart failure 1(3%)

1(5%)

Honatremia 1(3%)

1 (5%)

GI bleed 1(3%)

Hyperkalenila 1(3%)

1(7%)

Pruritus 10%)

1(7%)

Intestinal obstruction 1(3%)

1(7%)

Teffri A, et al. 203 ASH Abstract 9662 -41-

Treatment-related toxicity of imetaistat among 33 patients with highllnt-2 risk my&oflbross

Extramedullary not related to myclasuppmsslon Grade-i nausea 5(15%)

Grade-I vomiting 1(3%)

Grade-112fague 4(12%)

Grade-2 lyperbilinibineniE 2(6%)

Grade.2AP1T increase 1(3%)

Gmde.3/4neutmpensa 721%) 2(11%) 5(36%)

Grade-3K thrombocytopenia 10(30%) 5(26%) 5(36%)

Grade-3/4 anemia 4(12%) 1(5%) (21%)

3iade4neirtropenia 4(12%) 1(5%) 321%)

Grade-4 Ihrombccytopenia 4(15%) 0 4(29%)

Grade-5 CNS bleed and febinle netJtropiia 1(3%) 0 1(7%11

TeffertA, et al. 2013 ASH Abstract 4662 -

120. During the presentation, defendant Scarlett stated in relevant part:

We’ve seen as any of you who saw Dr. Tefferi’s presentation, we saw unprecedented remissions, both CRs and PRs by IWG criteria. This was in 5 out of 22 patients. We saw a clinical improvement by the IWG criteria observed in another 4 out of 22 patients and the overall response rate was 40.9%, representing 9 out of 22 patients. And as we will comment on a numerous occasions,


CA NO. 3:14-CV-01224 (CRB)

I31Ofl

geian


myelosuppression is the principal dose-limiting toxicity of this product. It is believed to be or certainly the hypothesis is that it’s an on-target toxicity due to effects on progenitor cells and specifically hematopoietic progenitor cells. And we believe that this is manageable through those hold rules and dose modifications.

* * * You heard Dr. Tefferi say that this was a very potent drug and we completely agree with this. And I do think that we have used this opportunity -- unfortunate opportunity to learn about the drug and also to change a lot of the ways or some of the ways that we treat patients.

* * * One, we have said that we do plan to develop the drug obviously and myelofibrosis and that we expect to begin a clinical studies sometime in the first half of 2014. We’ve also said that we will come forth to the investment community and others in the first quarter and discuss all of those point [sic] , and I don’t think we’re quite in a position to do that so we’re refraining from commentary today about that.





b) Data from the ET/PV Trial of imetelstat indicated that imetelstat caused persistent


c) Data from the ET/PV Trial of imetelstat demonstrated that patients faced a risk of

chronic DILI;






122. On January 15, 2014, Geron presented at the 32nd Annual JP Morgan Healthcare

Conference. In regard to the safety and development of imetelstat, the presentation slides stated:


CA NO. 3:14-CV-01224 (CRB)

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1 go ion

2 advancing clinical development of imeteistat in

3 hematologic myeloIdma!ign s

4 o Imetelstat: differentiated and proprietary oncology product

- first telcmeiase inhibitor in clinical development

5 - discovered and developed by Geron; I through 2025 with patent extension expected beyond

- may selectively inhibit telomerase-driven proliferation of malignant cells in bone marrow, targeting the

6

underlying disease

o Development plan for myerofibrosis and other hematologic myeloid malignancies with unmet needs

7 - initiate multi-center Phase 2 trial in mvelofibrosis in 1H 2014

identify dosing regimen to optimize benefit-risk profile and define and validate components of

8

composite remission endpoint for randomized Phase 3 trial to support potential full approval

- sponsor potential pilot studies in myeIodysplstic syndromes and acute myelogenous leukemia

9 o Data from two clinical trials that show disease-modifying activity

- myelofibrosis: remissions (CR+PR) observed in 5 out of the first 22 patients included in the preliminary

10

data from the Mayo Clinic investigator-sponsored trial (1ST) as presented at ASH 2013

• overall response (CR+PR+Cl) rate of 409% (9/22 patients)

11 • no patients with CR, PR or Cl have lost their response to date per investigator

- essential thrombøcythemia durable hematologic and molecular responses in Phase 2 trial presented at

12 ASH 2012 and updated at EHA 2013 provided proof-of-concept

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28 53



W - ro-n

preliminary safety data in MF non-hematologic adverse events not dose-limiting

Treatment-related nori-hematologic toxicity of imetelstat among the first 33 patients

enrolled with high or intermediate-2 risk myelofibrosis

Grade 1 nausea

5(15%)

Grade I vomiting

1(3%)

Grade 1/2 fatigue

4(12%)

Grade 2 hyperbilirubinemia

2(6%)

Grade 2 APTI increase

1(3%)

o SimUar and generally mild to moderate non-hematologic adverse events have also been observed in prior company-sponsored studies of imeteistat, including:

- GI events - fatigue - liver function test abnormalities

- 1 lIiñFcIST.piinted atthe 2013 AS" Annual MeatInji Abstract (662 (Teffe, A et al.) 24

gion

preliminary safety data in MF myelosuppression is dose-limiting toxicity

Treatment-related hematologic toxicity of imetelstat among the first 33 patients

enrolled with high or intemediate-2 risk myeofibrosis

Grade 3/4 neutropenia

7(21%)

2 (11)

5(36%)

Grade 3/4 thrombocytopenia

10(30%1

5(269/o)

5(36%)

Grade 3/4 anemia

4(12%)

1(5%)

3(21%)

Grade 4 neutropenia

4(12%)

1(5%)

3(21%)

Grade 4 thromboqrtopeni

4(1%)

0

4(29%)

Grade 5 (death) CNS bleed and febrile neutropenla

1(3%)

0

• Arm A schedule adequately managed through dose hold rules and dose modifications

• Arm B schedule not sufficiently tolerable for further development

• A focus for Geron's planned Phase 2 study will be to evaluate alternative dosing regimens with a goal to further reduce myelozuppression without diminishing efficacy

In the Wyo ClinicISTprentd atthe2D13 ASHArrn MIT, frt2 (Tffri A, et I.)


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go ion

potential clinical milestones

Legend: 'To be informed, in partbthe - - -

Mayo Clinic 1ST in MF, ncluding Is Data update (per rwesttordecion)

cohorts with certain MDSsub- Finalize study design

populations and blast-phase MF W r ni ye p cthd/projected

Initiate study IFPI) P Primary analysis expected/projected

13

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123. During the presentation Scarlett also stated in relevant part:

16

There was 100% hematologic response rate. The patients on average CR’d in about six weeks. This has been extremely durable effects. The median time on

17

therapy as of the midpoint of last year, which was the last time that we actually reported data, was 14 months. And we now have patients as of today, who have

18 gone just past the three-year mark on drug.

19

The more important element was that there was a very deep molecular response rate. Half of the patients in this disorder carry the JAK2 V617F mutation.

20 * * *

21

I have to say this was a red-letter day in my personal career as a drug developer of over 30 years, when Ayalew called our hematologist/oncologist and said, we have

22

a CR, a bona fide CR. And I will have to tell you, that was a very emotional day for all of us. Not because of what it meant so much for the Company as for what

23

it meant for these patients. It was the first time this had ever really been seen, except for very rare and very anecdotal results. Obviously, that has been followed

24 up.

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We also showed clinical improvements, so there were an additional four patients who had clinical improvements, spleen response, liver response, anemia response

26

for an overall response rate of approximately 41%.

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* * *

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Current focus

Mayo Clinic 1ST in MF (ongoing)

Phase 2 study In MF (pInned)

Broader opportunities

Potential pilot study in MDS*

Potential pilot study In AML

2014 2015 1016

HI H2 Hi H2 HI I H2

______

--------o _


we had one on-study death that was related to a patient who received very intensive dosing of the drug and became aplastic, developed febrile neutropenia and died.

If you look across all of the patients in this study, we see similar general mild to moderate nonhematologic adverse events, including GI events and fatigue and some liver function test abnormalities, but none of these are really dispositive. The most important abnormality are the neutropenias and thrombocytopenias. And if you see on the right-hand side of this slide, that the patients in the more intensive dosing arm had a substantially higher incidence of grade 4 neutropenia and thrombocytopenia. We no longer use the drug this way, and we are now focusing our planned Phase II study on evaluating alternative dosing regimens with a goal to further reduce myelosuppression without diminishing efficacy.

* * * We would anticipate at very least an update on the Mayo Clinic IST at the end of this year . ASH is an obvious place to see that. The Phase II study, which we just described very briefly, is planned for an initiation, first patient in approximately the end of the first quarter. We hope to have meaningful data sometime in the middle of 2015 since this is not a registrational study . We are able to look at it pretty much as much as we wish, and then you can see the potential pilot studies there.



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following:

a)

b)

c)

d)

e)

A patient in the ET/PV Trial of imetelstat had cirrhosis and was discharged from





chronic DILI;







28 56

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125. On January 27, 2014, Geron filed a Regulation FD Disclosure on Form 8-K with

the SEC announcing that the Myelofibrosis Trial has been closed to new patient enrollment and

further stating:

Based on this preliminary efficacy and safety data, the Company plans to initiate a Geron-sponsored, multi-center, Phase 2 clinical trial of imetelstat in patients with myelofibrosis in the first half of 2014 . The Company also believes that the total accrued patients in the Myelofibrosis IST will be adequate for gathering additional and updated safety and efficacy data to support the imetelstat development program.








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chronic DILI;

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127. On January 30, 2014, Geron issued a press release announcing the pricing of a

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public offering of 22,500,000 shares of its common stock at $4.00 per share. The press release

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disclosed that Geron “intends to use the net proceeds from this public offering to fund research

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and development, including the company’s planned Phase 2 clinical trial of imetelstat in

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I myelofibrosis,”

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128. The prospectus supplement for the offering, filed on Form 424B5 with the SEC

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the same day, stated in part:

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In the Phase 2 ET trial, long-term administration of imetelstat was generally well tolerated . One patient discontinued the trial due to drug-related Grade 1 and 2 constitutional adverse events and Grade 1 gastrointestinal adverse events . . . . Currently, 11 patients remain on-study in the Phase 2 ET trial, with the longest duration on-study being three years. These data suggest that imetelstat inhibits the progenitor cells of the malignant clone believed to be responsible for the underlying disease in a relatively selective manner. . . .

At least one abnormal liver function test, or LFT, was observed in laboratory findings in all patients . The majority were Grade 1 elevations in alanine aminotransferase, or ALT, and aspartate aminotransferase, or AST; two Grade 3 increases in ALT/AST were reversible on dose reduction. With longer dosing, Grade 1 increases in alkaline phosphatase were observed, associated with mostly Grade 1 to some Grade 2 unconjugated hyperbilirubinemia. LFT abnormalities do not appear to progressively worsen over time.

Although the Phase 2 ET trial is no longer enrolling patients, we are continuing to treat and follow the remaining patients on study.

* * * At the ASH annual meeting in December 2013, the investigator presented updated preliminary safety results from the first 33 patients treated in Cohorts A and B in the Myelofibrosis IST. In the presentation, the investigator noted that 24 of 33 patients remained on imetelstat treatment as of December 2013, and the nine patients who discontinued treatment were due to lack of response (n=6), transformation to CMML (n=1), death unrelated to imetelstat treatment (n=1) and death possibly related to imetelstat treatment (n=1).

Non-hematologic adverse events in these patients as reported by the investigator were generally mild to moderate and not dose-limiting. Non-hematologic treatment-related toxicities of imetelstat reported by the investigator were:

All patients Non-Hematolugic Adverse Event. not ldftted to mielosuppression

(n33)

Grade-1 nausea

5 (15°o) Grade-1 vomiting

1 (3°o) Grade-1/2 fatigue

4 (12°o) Grade-2 hvprbi1irubinemia

2 (6°o) Grade 2 APTT increase

1 (3°o)

In addition, the investigator reported all grade 3/4 extramedullary adverse events not related to myelosuppression, regardless of attribution:

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c)


Non-Heinto1ogIc Adverse event, Cohort A

Cohort B

All patients

regardless of HtWbutlon

(n19)

(n-14)

(II33)

Fatigue

1 (5%)

2 (14%)

3 (9°o) Atrial fibrillation

2 11°Q)

2 (6°o) Alkaline phosphatase 1 (5%)

1 (7%)

2 (6°a) Heart failure

1 (5%) Hyponatremia

1 (5C..)

Gastrointestinal bleed

1 (5%) I (3a o )

Hvperkalemia

1(7%) 1 (3a o )

Pruritus

1 (7%)

I (3°o) Intestinal obstruction

1 (7°)

I (3°o)

Non-hematologic adverse events in these patients as reported by the investigator were generally mild to moderate and not dose-limiting. . . . We believe myelosuppression was the principal dose-limiting toxicity, consistent with our observations in previous Geron-sponsored imetelstat studies.

* * * The next step we plan to undertake in this development process is to initiate a planned Geron-sponsored multi-center, Phase 2 clinical trial of imetelstat in patients with MF. The planned Geron-sponsored Phase 2 clinical trial will be conducted across multiple treating centers and across multiple geographic regions, and is being designed to evaluate whether the results observed in the Myelofibrosis IST are reproducible and not limited to a single treating center. . . . We expect to initiate the planned Geron-sponsored Phase 2 clinical trial in MF in the first half of 2014, with preliminary data expected to be available in mid-2015

129. On this news, the price of Geron common stock rose $0.93 per share, or over

19%, to close at $5.06 on January 30, 2014.


I because Defendants knew and/or recklessly disregarded, and/or failed to disclose the following:

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A patient in the ET/PV Trial of imetelstat had cirrhosis and was discharged from





chronic DILI;


CA NO. 3:14-CV-01224 (CRB)


1 d)

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POST CLASS PERIOD EVENTS

131. On March 12, 2014, Geron issued a press release entitled “Geron Announces IND

Clinical Hold Affecting Clinical Trials of Imetelstat in Essential Thrombocythemia and Multiple

Myeloma.” Therein, the Company stated, in relevant part:

[T]he company has received verbal notice from the U.S. Food and Drug Administration (FDA) that its Investigational New Drug (IND) application for imetelstat has been placed on full clinical hold, affecting all ongoing company-sponsored clinical trials.

The clinical hold affects the remaining eight patients in the company’s Phase 2 study in essential thrombocythemia (ET) or polycythemia vera (PV) and the remaining two patients in the company’s Phase 2 study in multiple myeloma. In addition, the company’s planned Phase 2 clinical trial in myelofibrosis will likely be delayed due to the clinical hold. It is possible that other studies using imetelstat, such as ongoing investigator-sponsored trials, may also be placed on clinical hold by the FDA.

Geron has not yet received written notice of its clinical hold from the FDA, but based on the verbal communication yesterday afternoon, the FDA indicated that the clinical hold is due to the occurrence of persistent low-grade liver function test (LFT) abnormalities observed in the Phase 2 study of imetelstat in ET/PV patients and the potential risk of chronic liver injury following long-term exposure to imetelstat. The FDA expressed concern about whether these LFT abnormalities are reversible .

132. On a special conference call held later that day in response to the FDA’s clinical

hold, CEO Scarlett stated in part:

We were surprised by these actions as we reported publicly in March 2013, we observed persistent LFT. We have observed persistent LFT abnormalities in the ET trial. At least one abnormal LFT has been observed in all of the patients in this trial. The majority were Grade 1 or Grade 2 elevations in ALT or AST. Reversible Grade 2 to Grade 3 elevations in ALT with Grade 1 to Grade 2 elevations in AST were observed within a few weeks of starting Imetelstat in some patients.

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However, with longer dosing Grade 1 increases in alkaline phosphatase were observed associated with mostly Grade 1 and in some cases with Grade 2 unconjugated hyperbilirubinemia. Since then we engaged an expert panel of liver experts who, along with our internal safety staff have periodically reviewed the data in all possible liver related SAE's. Our and their conclusions were that the benefit risk profile with Imetelstat was favorable. These conclusions remained consistent as the ET trial progressed. FDA have now asked us to provide data regarding the reversibility of these LFT abnormalities after patients have discontinued from Imetelstat in our own IND trials, and to provide information regarding the incidence of and if relevant the reversibility of such abnormalities from other non-Geron sponsored studies including the Mayo Clinic IST.

* * * [Analyst]: If you can put any context around the term persistency. How long do these effects continue for and what’s the longest you’ve seen this go out at this point?

[Scarlett]: We’ve seen these Grade 1 increases in alkaline phosphatase, and some of the hyperbilirubinemia persist as long as patients have been on the study. So, in a couple of cases, these have gone upwards of 20 plus months . . . .

[Analyst]: When they’re reversible, do they just go to a lower Grade and stay there or reversible means that those particular patients, they were resolved out completely?

[Scarlett]: Yeah. The reversible Grade 2 to Grade 3 elevations in the ALT which were sometimes associated with Grade 1 to Grade 2 elevations in AST resolved with dose holds and dose reductions and did not recur. So, the focus today is on the persistent low-Grade LFT abnormalities, not those acute changes.

* * * [Analyst]: Have any patients failed to resolve to zero on their LFTs with dose withdrawal?

[Scarlett]: So, what we reported previously as far as I know is the case was that the patients with the acute elevations of AST and ALT when dose reduced, did have resolution and have not recurred. I do not have insight into every single patient, so I really have to qualify that as a general statement. However, there are certainly many patients and this is really the source of this whole discussion, there’re many patients who have had dose reductions or dose modifications for a variety of reasons who’ve had these persistent low-Grade LFTs.

So, we don’t – the question at hand that we don’t have the complete information and data on today is what happens when patients dose reduce if you will to zero, meaning that they come off of the drug. That’s one of the things that we are in the process of evaluating and finding out. That's really the reversibility question. So we don’t really have an answer to that question today and that’s what we need to go do more work on .

[Analyst]: How difficult do you think it will be to acquire those data as far as, hey, the patient’s off the trial, how do we – how are you going to go about finding out what their LFTs are?

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[Scarlett]: So that’s obviously a very relevant comment. And it is – it can be quite difficult to go back and obtain such data, we will make every effort to do that. In some cases, it may require re-consenting patients to look at their data that has occurred over the usual space of time, that is covered by most protocols which is [which is about 30 days after they] come off of drug. The original, the original plan was to provide information in that regard. So, it will certainly be challenging.

133. On this news, the price of Geron stock declined $2.56 per share, or over 61%, to

close on March 12, 2014 at $1.60 per share, on unusually heavy volume.

134. On March 17, 2014, Geron filed its annual report on Form 10-K for the fiscal year

2013 (“2013 Form 10-K”), signed by defendant Bloom and certified by defendants Scarlett and

Bloom. The 2013 Form 10-K provided further details regarding the clinical hold and its

implications for future development of imetelstat:

In their notice to us, the FDA cited the following safety issues as the basis for the clinical hold: lack of evidence of reversibility of hepatotoxicity, risk for chronic liver injury and lack of adequate follow-up in patients who experienced hepatotoxicity. To address the clinical hold, we are required to: provide clinical follow-up information in patients who experienced liver function test, or LFT, abnormalities until LFT abnormalities have resolved to normal or baseline; and provide information regarding the reversibility of the liver toxicity after chronic drug administration in animals. . . . we intend to compile and submit to the FDA preclinical and clinical data and information from our own studies, as well as data and information available to us from other imetelstat studies, such as the Myelofibrosis IST, regarding LFT abnormalities and the incidence and reversibility of hepatotoxicity.

Until the FDA lifts the full clinical hold, we are unable to submit any new clinical trial protocols to the FDA under our IND for imetelstat and are unable to initiate any new clinical trials for imetelstat in the United States. Therefore, the initiation of our previously-announced planned Geron-sponsored Phase 2 clinical trial of imetelstat in patients with MF will be delayed indefinitely and may not occur at all. If the FDA does not lift the full clinical hold, we will likely be unable to pursue the development of imetelstat.

135. On March 20, 2014, Geron issued a press release announcing that the FDA has

I placed a partial clinical hold on the Myelofibrosis Trial, pursuant to which “no new patients may

I be enrolled into the Myelofibrosis IST, and patients currently enrolled must demonstrate that

they are deriving clinical benefit in order to continue taking imetelstat.” Geron explained that:

[T]he FDA cited the reason for the partial clinical hold was that a safety signal of hepatotoxicity had been identified in clinical trials of imetelstat, and that it is not known if this hepatotoxicity is reversible . In order to resolve the partial

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clinical hold on the Myelofibrosis IST, the investigator is required to provide to the FDA follow-up information regarding reversibility of hepatotoxicity for all patients who received imetelstat in the Myelofibrosis IST.

136. On April 8, 2014, Geron presented at the 13th Annual Needham Healthcare

Conference. In regard to the clinical hold of imetelstat, the presentation slides stated:

Ir goron

forward-looking statements Except for statementso1historical fact, this presentation contains forward-Iooing st.atemEnt5 made pursuant to the

"safe harbor' provisions of the Private Securities Litigation Reform At of 195. including without limitation, statements regarding: anticipated timelines for data reporting, respondingto the full and partial clinical holds and planned clinical trial initiation; imteIstats clinical activity In the bone marrow, its potential to be disease modifying and other statements regarding its potential therapeutic benefit; the ability of the Company and the Mayo Clinic to fulfill the FDA's requirements 10 IifttheclinkaI holds; the abilityto manage myeIouppion o r other adverse events, or Iv( function test çLFT) abnormalities, through dose hold rules, dose modifications or other changes to clinical procedure the development plans for itnetqIMt and potential milestones and costs related thereto and the timing thereof; the number and types of indicationcwe may pursue; and other statements that are not historical facts. These 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 limitation, risks and uncertaintiesregarding: the uncertainty that LFT abnormalities may have consequences that are clinically s1gnIflcM, long-term or Irreversible: aderse safety everts

causecould the benefit-risk profile for inktt to became unacceptable, including without Iin,ithn, as a result of the Inability to manage mydosuppression or oilier adverse events, or ITT abnotmalities, through dose hold rules, dose modifications or otherhanges to clinical procedures, including whether the Company's nonclinical animal data will be sufficient to cause the FDA o release the full clinical hold whether the FDA releases the clinical hold o our IND or the ND of Dr. Tefferi for theinvestigator-sponsored till of lmetelstt in myelofibross at Mayo Clinic MyeIofrbroi lsT)

whether we oc Er. TfferL of Mayo Clinic may be able to provide adequate information or data to respond to the clinical holds; or reliance on the conduct of and data from investigator-sponsored trials of inetelstat and or ability to advance imet&tat to subsequent Geron-sponsored clinical trials; the fact that preliminary efficacy and safety date that we have reported from the Myeloflbrosis 1ST may he materially different from the final data generated in the trial, and that one or more of the efficacy and safety outcomes in the MyelofIbro5i5 1ST may materially change as additional patients were enrolled and treatment continues and additional and updated patient data becomes available; numerous risks and uncertainties with regard to manufacturing imetelstat and those other risks and uncertainties inherent in the development of potential therapeutic products such as successful company-porored clinical trial rults, technical, scientific and regulatory challenges, sufficient capital resources, limitations on our freedom to operate arising from intellectual property of others, and challenges or enforcement of Geron's intellectual property rights. More detailed additional information and factors that could cause actual results to differ materially from those In the forward-looking statements Is contained in Geron's periodic reports filed with the Securities & Exchange Commission primarily under the hding Risk Factors,' including in 6ero.s annual report on Form 10-K for the yarendd December 31, 2013. Undue reliance should not be placed onGemn's forward-looking statements, and Geron dsclains any obligation to update the forward-Ioking 5tatements to rI1ect future information, events or circumstances.

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giin

recent history re mete . ..sa ...l

.abnormalities

0 Background - LET abnormalities observed in all patients in Phase 2 clinical trial in El!

- majority were Grade 1 elevations in ALT/AST; occasional Grade 2-3 elevations in ALT or AST

observed, reversible on decreasing dose

- some patients experiencing persistent low-grade LET abnormalities with longer dosing

• Grade 1 increases in alkaline phosphatase associated with mostly Grade 1 t some Grade 2

uncon]ugted hyperbilirubinemia

• clinical significance, long-term consequences and reversibility - currently undetermined

o Hepatic experts engaged as consultants in early 2013:

- evaluated initial LFT data set from Phase 2 ET trial, as well as hepatobiliary SAEs from all

imeteistat clinical trials, and subsequent LFT data on an ongoing basis

- recommended no changes to the use or administration of imeteistat in Phase 2 El or MM trials

o Summary of liver findings from nonclinical toxicity studies of chronic imeteistat administration:

- conducted in mice and cynomorgus monkeys

- no clinical or anatomical pathology changes indicative of hepatocellular injury observed

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137. While giving the presentation, defendant Scarlett stated in relevant part:

Now the critical side effect profile for this product has been at least heretofore myelosuppression. As a consequence of the drug’s activity on progenitor cells and progenitor cell clones, it has clearly the dose-limiting toxicity has been myelosuppression and, in particular, neutropenia and thrombocytopenia. We have been approaching this, I think, quite successfully and adequately managing this with dosage adjustments and so forth. And I would have said until the FDA put us on clinical hold, I would have said that this was the primary dose-limiting toxicity certainly of the product . . . .

So beginning back in the beginning of 2013, we actually reported publicly that there were LFT abnormalities observed in patients in the Phase 2 clinical trial, in particular in essential thrombocythemia. The majority of these where Grade 1 elevations in ALT and AST. We did have a few patients who had occasional Grade 2 to 3 elevations in AST or ALT. However, those were reversible on decreasing or holding the dose, and they are not really the subject of at least our deeper level of concern .

What we also observed in the ET study was that some patients experienced persistent low-grade LFT abnormalities. And these were mostly associated with Grade 1 increasess in alkaline phosphatase and associated with Grade 2 and -- Grade 1 and some Grade 2 unconjugated hyperbilirubinemia. And as the slide says, the clinical significance and long-term consequences and reversibility of this are currently undetermined . . . .

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I think it is very important to recognize that Dr. Tefferi's myelofibrosis IST was put on partial clinical hold. And when they cited the issues for him being put on clinical hold, they said that a safety signal of hepatotoxicity was identified in clinical trials of imetelstat. And the question was whether this was reversible.

138. On May 15, 2014, Geron presented at the Bank of America Merrill Lynch 2014

Health Care Conference. In regard to the clinical hold of imetelstat, the presentation slides

I stated:

oron

recent history regarding imetelstat LFT abnormalities

o Background - LIT abnormalities observed in all patients in Phase 2 clinical trial in El: - majority were Grade 1 elevations in ALT/AST; occasional Grade 2-3 elevations in ALT or AST

observed reversible on decreasing dose - some patients experiencing persistent low-grade LFT abnormalities with longer dosing

• Grade 1 increases in alkaline phosphatase associated with mostly Grade I to some Grade 2 unconjugated hyperbilirubinemia

• clinical significance, long-term consequences and reversibility - currently undetermined

o Hepatic experts engaged as consultants in early 2013: - evaluated initial LFT data set from Phase 2 El trial, as well as hepatobiliary SAEs from all

inletelsidt clinical trials, and subsequent LFT data on an ongoing basis - recommended no changes to the use or administration of inietelstat in Phase 2 ET or MM trials

o Summary of liver findings from nonclinical toxicity studies of chronic imeteistat administration: - conducted in mice and cynomolgus monkeys - no clinical or anatomical pathology changes indicative of hepatocellular injury observed - no deer signal of biochemical LFT abnormalities identified

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o Ion

addressingth.clinica.holds Information required by the FDA: Activities:

0 follow-up LFT information for au patients in the Myelofibrosis 1ST

- if LFTs normal ! follow-up I— information for 30 days

- if LFTs abnormal follow-up until resolved to normal or baseline

o compile and analyze LFT data

a amend clinical protocols, seek IRB approvals

0 clinical follow-up in patients who and obtain patient informed consent to

experienced LFT abnormalities until allow for longer follow-up after imeteistat

o resolved to normal or baseline was discontinued to collect LET and other

o information regarding reversibility relevant information

of the liver toxicity after chronic 0 compile and analyze LFT data from all trials

drug administration in animals 0 conduct expert assessment of liver findings in nonclinical chronic toxicity studies

21

139. On June 4, 2014, Geron presented at the Jeffries 2014 Healthcare Conference. In

regard to the safety and clinical hold of imetelstat, the presentation slides stated in relevant part:


CA NO. 3:14-CV-01224 (CRB)

4(20%)

1(5%)

2(10%)

1 5%)

10(50%)

2(10%)

3(15%)

2(10%)"'

0

0

4(20%)

19(95%)

17(85%)

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13(65%)

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1 go ran

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3 most frequently reported adverse events

4 20 patients (18 El & 2 PV were enrolled in the study

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Infections

20(100%)

GI Events 19(95%)

(NauseIDiarthea/ConstppationNmiting)

Fatigue 18(90%)

MuscuoskIetaI Disorders (Pin) 16(80%)

Cytcpenias 14(70%)

HepatobiIiaii (laboratory abnormalities 14 '7Q%

and clinical events arid compIicatns)

Headache 14(70%)

Bleeding Events 14(70%)

Dizziness 12(60%)

Pyrxia 10(50%)

§ Related = at et possiby attributed to imetektat by investigator * Influenza

** 2 patients: I pt, with reversible Grade 3 ALT & AST 1 pt. with Grade 3 hepatic cirrhosis and enepaloathy who died of bleeding esophageal varice (Grade 51

2 patients: 1 pt. with Grade 3 post-operative hemorrhagic anemia 1 Pt. with Grade 3 cpstai

AST aspgrtate trl5amIra

go ion

essential thrombocythemia data laboratory a bnormalities

20 patients (18 [1 & 2 PV) were €'rroi&d in the study

Alan me trarisan-iiriase (ALT) 18(90%) 2(10%)" 0

Aspartate transanilnase (AST) 18(90%) 1(5%)-- 0

Alkaline phosphatase (ALP) 16(75%) 0 0

Biirubin, total 8(40%) 0 0

Neutropsnia 16(80%) 8(40%) 3(15%)

Anemia 20(100%) 3(15%) 0

Thrombocytopni 11(55%) 1(6%) 0

Shift horn birp any abnorina lily rôrded No cases of febrile neutropnia were reported

0 Hepatic enzyme abnormalities observed In all patients

- majority were Grade 1 elevations in ALT/AST

- two patients (**) with Grade 3 increases in ALT/AST reversed on dose reduction

- serial Grade 1 ALP increase in four patients, with primarily unconjugatd Grade 1 hyperbilirubinemIa

o Hepatic experts engaged as consultants since early 2013;

- evaluated initial LFldata set from Phase 2 El trial, as well as hepatobiliary SAEs from all imeteistat

clinical trials, and subsequent LFT data on an ongoing basis

- have not recommended any changes to the use or administration of imeteIsat in Phase 2 ET or MM trials

LFf = ILvt fu ndiontet; SAEs = Nerlausadvese events


CA NO. 3:14-CV-01224 (CRB)

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recent FDA action related to Geron's imeteistat IND

...........................................................................................................................................................

0 Geron's IND for imet&stat placed on full clinical hold:

- patients in Phase 2 ET and MM trials cannot receive any further treatment with imeteistat

- eron cannot initiate a new clinical trial under its IND until hold is lifted or partially lifted

o Safety issues cited by 10A as basis for full clinical hold on GeroWs lND

- lack of evidence of reversibility of hepatotoxicity

- lack of adequate follow-up in patients who experienced hepatotoxicity

- risk for chronic liver injury

o Information required by the FDA:

- clinical follow-up in patients who experienced LFT abnormalities until resolved to normal or

baseline

- information regarding reversibility of the liver toxicity after chronic drug administration in animals

go ion

addressing the clinical hold related to Geron's imeteistat IND

.............................................................................................................................................................

0 Clinical activities:

- amend Geron-sponsored clinical protocols, seek IRB approvals and obtain patient informed

consent to allow for longer follow-up after imeteistat was discontinued to collect LIFT and other

relevant information

- compile and analyze LFT data from trials

O Noncliriicai activities:

- nonclinical toxicity studies of chronic imetelstat administration were previously conducted in mice and cynomolgus monkeys

• no clinical or anatomical pathology changes indicative of hepatocellular injury observed

• no clear signal of biochemical LFT abnormalities identified

- conduct further expert assessment of liver findings in prior nonclinical chronic toxicity studies

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140. During the presentation, defendant Scarlett disclosed that a participant in the

ET/PV Trial died possibly as a result of imetelstat and further discussed the FDA’s clinical hold:

We also had a patient who died of an esophageal variceal bleed and I will just tell you a little bit more about this patient. . . .

And in the beginning of November of last year he presented with findings consistent with hepatic encephalopathy. And the investigator assessed that that hepatic encephalopathy was not related to imetelstat. On investigation it was found that he had cirrhosis. The patient was discharged and imetelstat treatment was discontinued.

Now we had put together a panel of liver experts back at the beginning of 2013 when we first saw some of the LFT abnormalities coming and we will talk more about this in the next slide.

At the end of January the patient developed the variceal bleed that was the cause of his death and in February the investigator assessed that imetelstat could not be conclusively excluded as a possible cause of the variceal bleed.

Our independent panel of consulting herpetologists [sic] concluded that while imetelstat could not be ruled out as a possible contributor to the chronic liver injury observed , that this did not substantially increase their liver safety concern regarding imetelstat and therefore the ET clinical trial could continue without modification.

* * * So in early March, approximately a week before we were notified of the clinical hold, so this all happened rather quickly, the FDA requested information related to the reversibility of persistent LFT abnormalities, specifically following discontinuation of imetelstat. That week we submitted the information available to us to the FDA but our information on reversibility was limited. It was limited due to the standard 30-day follow-up period allowed by our clinical protocol after a patient actually discontinues imetelstat.

So a few days after our submission the FDA notified us of the full clinical hold and the safety issues that were cited in the FDA’s letter as the basis for that full clinical hold are described on this slide in the second large bullet point: a lack of evidence of reversibility of hepatotoxicity; a lack of adequate follow-up in patients who experienced hepatotoxicity; and a risk for chronic liver injury.

So the information that they need in order to evaluate going forward is clinical follow-up on patients who experienced LFT abnormalities until they have resolved to normal or baseline , and the information regarding – they asked for information regarding reversibility of the liver toxicity seen after chronic drug administration in animals.

So let’s talk about what we are doing about that and what we know today. So we are in the process of amending all of our Geron-sponsored clinical protocols, of getting IRB approvals, and obtaining patient informed consent to allow for a longer follow-up after imetelstat was discontinued to collect LFT and other relevant information . And we are obviously compiling and analyzing those data and LFT data from trials.

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* * * I would note that some of these persistent LFT abnormalities, Ryan, actually take quite a long time to become manifest. And so, it may take a long time to get full reversibility, if reversibility occurs. So if it took six or nine months for it to come on it may take six or nine months for it to go away, just a general principle .

141. On June 12, 2014 Geron issued a press release announcing that the FDA had

lifted the clinical hold on the Myelofibrosis Trial because Dr. Tefferi provided sufficient

I information to address the FDA’s concerns.

ADDITIONAL SCIENTER ALLEGATIONS

142. As alleged herein, Defendants acted with scienter because at the time that they

issued public documents and made other public statements in Geron’s name, they knew or

recklessly disregarded the fact that such statements were materially false and misleading and/or

omitted material facts concerning the risks imposed by the abnormal LFTs experienced by

patients in the ET/PV Trial, Geron’s failure to adequately follow up with patients in the ET/PV

Trial, and Geron’s failure to determine whether the liver abnormalities were reversible.

Defendants (1) knew that such documents and statements would be issued or disseminated to the

investing public, (2) knew that persons were likely to rely upon those misrepresentations and

omissions, and (3) knowingly and/or recklessly participated in the issuance and/or dissemination

of such statements and/or documents as primary violators of the federal securities laws.

Defendants’ materially false and misleading statements and omissions of material fact artificially

inflated Geron’s stock price during the Class Period.

143. Because the fraud alleged herein relates to the core business of Geron, knowledge

of the facts underlying the fraudulent scheme may be imputed to the Individual Defendants.

Indeed, Geron acknowledged in its 2012 Form 10-K that the Company was “solely dependent on

the success of one early-stage product candidate, imetelstat” and therefore the Individual

Defendants, as senior level executives and/or directors, were in such positions at the Company to

access all material, non-public information concerning the safety of imetelstat on a real-time

basis and the concerns expressed by the FDA. Thus, the Individual Defendants were well aware

that the positive statements detailed above about the safety and prospects for imetelstat, made

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1

I contemporaneously with knowledge of contradictory information, were materially false and/or

2

I misleading when made.

3

144. The Individual Defendants clearly had access to the Company’s trial protocols,

4

the data from the ET/PV Trial and the Myelofibrosis Trial because they discussed the relevant

5

data in detail throughout the Class Period. In addition, the Individual Defendants repeatedly

6

confirmed that they were monitoring the safety data for the ET/PV Trial and were in close

7

communication with Dr. Tefferi concerning the data from the Myelofibrosis Trial. Even prior to

8

the completion of the ET/PV Trial, the Individual Defendants would have had access to the

9

ongoing results given that Geron sponsored the ET/PV Trial and six Geron employees were

10

named on the trial abstract. The Individual Defendants were also aware that investigators were

11

not following up on patients until abnormal liver levels were reversed because the Company

12

drafted the protocol that only provided for a 30-day follow-up period and were otherwise aware

13

of and had access to Geron’s imetelstat study protocols.

14

145. Moreover, each of the Individual Defendants were highly educated, trained, and

15

experienced in drug development and clinical trials. For example, defendant Scarlett received

16

his M.D. from the University of Chicago, Pritzker School of Medicine and has since held senior

17

positions in pharmaceutical companies for the past twenty three years. From 1991 to 1993,

18

Scarlett headed the North American Clinical Development Center and served as Senior Vice

19

President of Medical and Scientific Affairs at Novo Nordisk Pharmaceuticals, Inc. From 1993 to

20

2001, he served as President and CEO of Sensus Drug Development Corporation which he led

21

through the acquisition, development, and approval of a novel endocrine product. During that

22

time, in 1995, he co-founded Covance Biotechnology Services, Inc. and served as a member of

23

the board of directors from inception to 2000. In 2002, Scarlett moved to Tercica, Inc., an

24

endocrinology-oriented biopharmaceutical company, where he served as CEO and director.

25

Under Scarlett’s direction, Tercica obtained approval and commercialization of two novel

26

endocrine products and entered into key partnerships with Genentech and Ipsen S.A. When

27

Tercica was acquired by Ipsen, S.A. in October 2008, Scarlett became the CEO and a member of

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1

the board of Proteolix, Inc., a biopharmaceutical company developing proteasome inhibitors for

2

I oncology and immunology applications.

3

146. Defendant Kelsey received his B.S. in Pharmacology, M.B., Ch.B., and M.D.

4

from the University of Birmingham in the United Kingdom. He has gone on to build a career as

5

a successful product development executive focusing on oncology drugs. Specifically, from July

6

1993 to June 2000, Kelsey served as a senior lecturer in hematology/oncology at St.

7

Bartholomews and the Royal London School of Medicine and Dentistry and visiting fellow at

8

Vancouver General Hospital and Terry Fox Laboratories. He then served as the director of

9

clinical affairs and the director of global clinical development (oncology) at Pharmacia

10

Corporation (SUGEN, Inc.) until June 2002. During that time, Kelsey was the lead clinician for

11

both SU6668 and SU011248, which is now marketed as Sutent by Pfizer. From June 2002 until

12

April 2009, Kelsey held various positions at Genentech, Inc., a leading biotechnology company,

13

where he was responsible for the oncology late stage development portfolio including Rituxan,

14

Herceptin, Tarceva, Perjeta, Kadcyla, Erivedge and five additional development products in solid

15

tumors and hematologic malignancies. When Kelsey left Geron in May 2013 he became the

16

Senior Vice President of New Projects at Medivation, Inc., a biopharmaceutical company

17

focusing on the development of novel oncology drugs.

18

147. Defendant Bloom has been employed at Geron since 1994 as Senior Financial

19

I Anaylst, and later as Controller and Chief Accounting Officer until she was appointed as CFO in

20

December 2012. During this time, Geron conducted dozens of clinical trials and engaged in

21

numerous drug development collaborations with other pharmaceutical companies.

22

148. In addition, in light of Geron’s accumulated deficit of $892.8 million as of

23 I December 31, 2013, the Individual Defendants were motivated to conceal Geron’s troubling

24

safety data and failure to follow up on the reversibility of liver abnormalities because the

25

Company was reliant upon the January 2014 stock offering to the capital markets to implement

26

its business strategy and planned product development efforts. The January 2014 offering would

27

have been negatively impacted if the truth about the Company’s clinical trials had been

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1

disclosed. Therefore, maintaining an inflated stock price at the time of the offering was essential

2

to Geron’s ability to maximize the ability to raise the capital it needed to fund its development

3

efforts, commercialization, and marketing activities for imetelstat.

4

LOSS CAUSATION

5

149. During the Class Period, as detailed herein, Defendants engaged in a scheme to

6

deceive the market and a course of conduct that artificially inflated Geron’s stock price and

7

operated as a fraud or deceit on Class Period purchasers of Geron stock by misrepresenting the

8

Company’s business and prospects. During the Class Period, Defendants misrepresented and

9

concealed the risks imposed by the abnormal LFTs experienced by patients in the ET/PV Trial,

10

Geron’s failure to adequately follow up with patients in the ET/PV Trial, and Geron’s failure to

11

determine whether the liver abnormalities were reversible. As a result of his purchases of Geron

12

stock during the Class Period at artificially inflated prices, Plaintiff and other Class Members

13

suffered damages as the truth regarding Geron’s fraud was revealed.

14

150. Defendants’ wrongful conduct, as alleged herein, directly and proximately caused

15

the damages suffered by Plaintiff and the Class.

16

151. Defendants’ false and misleading statements and omissions in their SEC filings

17

and other public statements during the Class Period directly caused losses to Plaintiff and the

18

Class. On the strength of these false statements, the Company’s stock price was artificially

19

inflated to a Class Period high of $5.55 per share on December 5, 2013. Those

20

misrepresentations and omissions that were not immediately followed by an upward movement

21

in the Company’s stock price served to maintain the share price at artificially inflated levels by

22

maintaining and supporting a false positive perception of Geron’s business, operations,

23

performance, and prospects.

24

152. As the truth began to emerge regarding the true nature of the ET/PV and

25

I Myelofibrosis trials, the price of Geron’s stock declined as the market processed each set of

26

I previously undisclosed facts. Each such disclosure removed a portion of the artificial inflation in

27

the price of Geron’s common stock and directly and proximately caused Plaintiff and other Class

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1

members to suffer damages. For example, on March 12, 2014, Geron shares closed at $1.60 per

2

share, a one day decline of over 61% on unusually heavy volume, following news of the FDA’s

3

I clinical hold on the imetelstat IND.

4

153. Until shortly before Plaintiff filed this Complaint, he was unaware of the facts

5

I alleged herein and could not have reasonably discovered Defendants’ misrepresentations and

6

omissions by the exercise of reasonable diligence.

7

CONTROL PERSON LIABILITY

8

154. The Individual Defendants are liable as direct participants with respect to the

9

wrongs complained of herein. In addition, the Individual Defendants, by reason of their status as

10

senior executive officers and/or directors, were “controlling persons” within the meaning of

11

Section 20(a) of the Exchange Act, and each had the power and influence to cause the Company

12

to engage in the unlawful conduct complained of herein. Because of their positions of control,

13

the Individual Defendants were able to and did, directly or indirectly, control the conduct of

14

Geron’s business.

15

155. Specifically, because of their positions within the Company, the Individual

16

Defendants possessed the power and authority to control the contents of Geron’s annual and

17

quarterly reports, press releases, and presentations to securities analysts, money and portfolio

18

managers and institutional investors, i.e. , the market, including those containing the materially

19

false and misleading statements and omissions of material fact alleged herein. Each of the

20

Individual Defendants, by reason of his/her respective management or board position, had the

21

ability and opportunity to review copies of the Company’s SEC filings, reports and press releases

22

alleged herein to be misleading, prior to, or shortly after their issuance or to cause them to be

23

corrected.

24

156. By virtue of their positions, the Individual Defendants had access to material non-

25

public information. Each of the Individual Defendants knew or recklessly disregarded the fact

26

that the adverse facts specified herein had not been disclosed and were being concealed from the

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1

public, and that the positive representations which were being made were then materially false

2

and misleading.

3

APPLICABILITY OF THE FRAUD ON THE MARKET DOCTRINE

4

157. The market for Geron’s common stock was an efficient market for the following

5

reasons, among others:

6

a) Geron’s common stock was listed and actively traded on the NASDAQ GS, a

7

highly efficient national market;

8

b) As a registered and regulated issuer of securities, Geron filed periodic reports

9

with the SEC, in addition to the frequent voluntary dissemination of information;

10

c) Geron regularly communicated with public investors through established market

11

communication mechanisms, including through regular dissemination of press

12

releases on the national circuits of major newswire services and through other

13

wide-ranging public disclosures such as communications with the financial press

14

and other similar reporting services;

15

d)

Geron was followed by multiple analysts, which followed Geron’s business and

16

wrote reports which were publicly available and affected the public marketplace;

17

e)

The material misrepresentations and omissions alleged herein would tend to

18

induce a reasonable investor to misjudge the value of Geron’s stock; and

19

f) Without knowledge of the misrepresented or omitted facts, Plaintiff and other

20

members of the Class purchased or otherwise acquired Geron stock between the

21

time the Defendants made the material misrepresentations and omissions and the

22

time that the truth was revealed, during which time the price of Geron stock was

23

artificially inflated by Defendants’ misrepresentations and omissions.

24

158. As a result of the above, the market for Geron securities promptly digested current

25

information with respect to the Company from all publicly available sources and reflected such

26

information in the security’s price. The historical daily trading prices and volumes of Geron

27

publicly traded stock are incorporated by reference herein. Under these circumstances, all

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I purchasers of Geron common stock during the Class Period suffered similar injuries through

2

their purchases of shares at prices which were artificially inflated by Defendants’

3

I misrepresentations and omissions. Thus, a presumption of reliance applies.

4

THE AFFILIATED UTE PRESUMPTION

5

159. At all relevant times, Plaintiff and the Class reasonably relied upon Defendants to

6

disclose material information as required by law and in the Company’s SEC filings. Plaintiff and

7

the Class would not have purchased or otherwise acquired Geron common stock at artificially

8

inflated prices if Defendants had disclosed all material information as required. Thus, to the

9

extent Defendants wrongfully failed to disclose material information concerning the risks

10

imposed by abnormal LFTs experienced by patients in the ET/PV Trial, Geron’s failure to

11

adequately follow up with patients in the ET/PV Trial, and Geron’s failure to determine whether

12

the liver abnormalities were reversible, inter alia, Plaintiff is presumed to rely on Defendants’

13

omissions as established by the Supreme Court in Affiliated Ute Citizens v. U.S. , 406 U.S. 128

14

(1972).

15

NO SAFE HARBOR

16

160. As alleged herein, Defendants acted with scienter because, at the time that they

17

issued public documents and other statements in Geron’s name, they knew or recklessly

18

disregarded the fact that such statements were materially false and misleading or omitted

19

material fact. Moreover, Defendants knew that such documents and statements would be issued

20

or disseminated to the investing public; knew that persons were likely to rely upon those

21

misrepresentations and omissions; and knowingly and/or recklessly participated in the issuance

22

and/or dissemination of such statements and/or documents as primary violators of the federal

23

securities laws.

24

161. As set forth in detail in the Complaint, the Individual Defendants, by virtue of

25

their control over, and/or receipt of Geron’s materially misleading statements and/or their

26

association with the Company which made them privy to confidential proprietary information

27

concerning Geron which was used to artificially inflate financial prospects and which Individual

28 76



Defendants caused or were informed of, participated in and knew of the fraudulent scheme

2

alleged herein. With respect to non-forward looking statements and/or omissions, the Individual

3

Defendants knew and/or recklessly disregarded the falsity and misleading nature of that

4

information, which they caused to be disseminated to the investing public.

5

162. The statutory safe harbor provided for forward-looking statements under certain

6

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

7

Many of the specific statements pleaded herein were not identified as “forward-looking

8

statements” when made and/or were statements of historical fact. Rather, the statements alleged

9

herein to be false and misleading all relate to facts and conditions existing at the time the

10

statements were made. Moreover, meaningful statements did not identify important factors that

11

could cause actual results to differ materially from those in any putative forward-looking

12

statement.

13

163. Alternatively, to the extent that the statutory safe harbor does apply to any

14

forward-looking statements pleaded herein, Defendants are liable for those false forward-looking

15

statements because at the time each of those forward-looking statements was made, the particular

16

speaker knew that the particular forward-looking statement was false, and/or the forward-looking

17

statement was authorized and/or approved by an executive officer of Geron who knew that those

18

statements were false when made. None of the historic or present tense statements made by

19

Defendants were an assumption underlying or relating to any plan, projection, or statement of

20

future economic performance, as they were neither stated to be such an assumption underlying or

21

relating to any projection or statement of future economic performance when made nor were any

22

of the projections or forecasts made by Defendants expressly related to or stated to be dependent

23

on those historic or present tense statements when made.

24

CLASS ACTION ALLEGATIONS

25

164. Plaintiff brings this action pursuant to Rule 23(a) and 23(b)(3) of the Federal

26

Rules of Civil Procedure on behalf of themselves and a class (the “Class”) consisting of all

27

persons who purchased or otherwise acquired Geron common stock during the Class Period at

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1

artificially inflated prices during the Class Period, and who were damaged thereby. Excluded

2

from the Class are the Defendants named herein, members of their immediate families, any firm,

3

trust, partnership, corporation, officer, director or other individual or entity in which a Defendant

4

has a controlling interest or which is related to or affiliated with any of the Defendants, and the

5

legal representatives, heirs, successors-in-interest or assigns of such excluded persons.

6

COUNT I

7

For Violations of Section 10(b) of the Exchange Act

8 and Rule 10b-5 Against Geron and the Individual Defendants

9

165. Plaintiff realleges each allegation above as if fully set forth herein.

10

166. This claim is brought under Section 10(b) of the Exchange Act, 15 U.S.C.

11

§ 78j(b) and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5, against

12

Geron and the Individual Defendants. Defendants (1) employed devices, schemes and artifices

13

to defraud; (2) made untrue statements of material fact and/or omitted material facts necessary to

14

make the statements made not misleading; and (3) engaged in acts, practices and a course of

15

business which operated as a fraud and deceit upon Plaintiff and the Class, in violation of

16

Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.

17

167. Defendants, individually and in concert, directly and indirectly, by the use, means

18

or instrumentalities of interstate commerce and/or the mails, engaged and participated in a

19

continuous course of conduct to conceal non-public, adverse material information about the

20

Company’s financial condition as reflected in the misrepresentations and omissions set forth

21

above.

22

168. Defendants each had actual knowledge of the misrepresentations and omissions of

23 I material facts set forth herein, or acted with reckless disregard for the truth by failing to ascertain

24

and to disclose such facts even though such facts were available to them, or deliberately

25

refrained from taking steps necessary to discover whether the material facts were false or

26

misleading.

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1

169. As a result of Defendants’ dissemination of materially false and misleading

2

information and their failure to disclose material facts, Plaintiff and the Class were misled into

3

believing that the Company’s statements and other disclosures were true, accurate, and complete.

4

170. Geron is liable for the acts of the Individual Defendants and other Company

5

I personnel referenced herein under the doctrine of respondeat superior, as those persons were

6

acting as the officers, directors, and/or agents of Geron in taking the actions alleged herein.

7

171. Plaintiff and the Class purchased Geron common stock, without knowing that

8

Defendants had misstated or omitted material facts about the Company’s financial performance

9

or prospects. In so doing, Plaintiff and the Class relied directly or indirectly on false and

10

misleading statements made by Defendants, and/or an absence of material adverse information

11

that was known to Defendants or recklessly disregarded by them but not disclosed in

12

Defendants’ public statements. Plaintiff and the Class were damaged as a result of their reliance

13

on Defendants’ false statements and misrepresentations and omissions of material facts.

14

172. At the time of Defendants’ false statements, misrepresentations and omissions,

15

Plaintiff and the Class were unaware of their falsity and believed them to be true. Plaintiff and

16

the Class would not otherwise have purchased Geron common stock had they known the truth

17

I about the matters discussed above.

18

173. Plaintiff is filing this action within two years after discovery of the facts

19

constituting the violation, including facts establishing scienter and other elements of Plaintiff’s

20

claims, and within five years after the violations with respect to Plaintiff’s investments.

21

174. By virtue of the foregoing, Defendants have violated § 10(b) of the Exchange Act

22

and Rule 10b-5 promulgated thereunder.

23

175. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and

24

the Class have suffered damages in connection with their purchase of Geron common stock.

25

26

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1

COUNT II

2

For Violations of Section 20(a) of the Exchange Act

3 Against the Individual Defendants

4

176. Plaintiff realleges each allegation above as if fully set forth herein.

5

177. Each of the Individual Defendants, by reason of their status as senior executive

6

officers and/or directors of Geron, directly or indirectly, controlled the conduct of the

7

Company’s business and its representations to Plaintiff and the Class, within the meaning of

8

§20(a) of the Exchange Act. The Individual Defendants directly or indirectly controlled the

9

content of the Company’s SEC statements and press releases related to Plaintiff’s and the Class’

10

investments in Geron common stock within the meaning of §20(a) of the Exchange Act.

11

Therefore, the Individual Defendants are jointly and severally liable for the Company’s fraud, as

12

alleged herein.

13

178. The Individual Defendants controlled and had the authority to control the content

14

of the Company’s SEC statements and press releases. Because of their close involvement in the

15

everyday activities of the Company, and because of their wide-ranging supervisory authority, the

16

Individual Defendants reviewed or had the opportunity to review these documents prior to their

17

issuance, or could have prevented their issuance or caused them to be corrected.

18

179. The Individual Defendants knew or recklessly disregarded the fact that Geron’s

19

I representations were materially false and misleading and/or omitted material facts when made.

20

In so doing, the Individual Defendants did not act in good faith.

21

180. By virtue of their high-level positions and their participation in and awareness of

22 I Geron’s operations and public statements, the Individual Defendants were able to and did

23

influence and control Geron’s decision-making, including controlling the content and

24

dissemination of the documents that Plaintiff and the Class contend contained materially false

25

and misleading information and on which Plaintiff and the Class relied.

26

181. The Individual Defendants had the power to control or influence the statements

27

made giving rise to the securities violations alleged herein, and as set forth more fully above.

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1

182. As set forth above, Defendants each violated §10(b) of the Exchange Act and

2

Rule 10b-5, thereunder, by their acts and omissions as alleged herein. By virtue of their

3

positions as controlling persons, the Individual Defendants are also liable pursuant to §20(a) of

4

the Exchange Act.

5

183. As a direct and proximate result of the Individual Defendants’ wrongful conduct,

6

Plaintiff and the Class suffered damages in connection with their purchase of Geron common

7

I stock.

8

PRAYER FOR RELIEF

9

WHEREFORE, Plaintiff on behalf of himself and the Class, pray for relief and judgment

10

including:

11

A. Determining that Counts I and II of this action are a proper class action under

12

Federal Rules of Civil Procedure 23, certifying Plaintiff as Class representatives under Rule 23

13

of the Federal Rules of Civil Procedure, and certifying Plaintiff’s counsel as Class Counsel;

14

B. Awarding compensatory damages in favor of Plaintiff and the other Class

15

members against all Defendants, jointly and severally, for all damages sustained as a result of

16

Defendants’ wrongdoing, in an amount to be determined at trial, including pre-judgment and

17

post-judgment interest, as allowed by law;

18

C. Awarding rescissory damages in favor of Plaintiff and the other Class members

19

against all Defendants, jointly and severally, for all injuries sustained as a result of Defendants’

20

wrongdoing, in an amount to be determined at trial, including pre-judgment and post-judgment

21

interest, as allowed by law;

22

D. Awarding extraordinary, equitable, and/or injunctive relief as permitted by law

23

(including, but not limited to, rescission);

24

E. Awarding Plaintiff and the Class their costs and expenses incurred in this action,

25

including reasonable counsel fees and expert fees; and

26

F. Awarding such other and further relief as may be just and proper.

27

28 81



1 JURY TRIAL DEMAND

Plaintiff hereby demands a trial by jury on all triable claims.

September 19, 2014 FARUQI & FARUQI, LLP

By: /s/ Richard W. Gonnello __

David E. Bower SBN 119546 10866 Wilshire Boulevard, Suite 1470 Los Angeles, CA 90024 Telephone: 424-256-2884 Facsimile: 424-256-2885 Email: [email protected]

Richard W. Gonnello (pro hac vice) Megan M. Sullivan (pro hac vice) FARUQI & FARUQI, LLP 369 Lexington Avenue, 10th Floor New York, NY 10017 Telephone: 212-983-9330 Facsimile: 212-983-9331 Email: [email protected]

[email protected]

Attorneys for Plaintiff


CA NO. 3:14-CV-01224 (CRB)

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1 Consolidated Amended Class Action Complaint 09/19/2014

Documents

Transcript of 1 Consolidated Amended Class Action Complaint 09/19/2014