Geron's (GERN) Imetelstat Progressing Well, Setbacks Concern

We issued an updated research report on Menlo Park, CA-based Geron Corporation (NASDAQ:GERN) on Aug 11.

Geron is developing anti-cancer therapies based on telomerase inhibitors. The company currently has one candidate in its pipeline, imetelstat. It is being developed for the treatment of hematologic myeloid malignancies like myelofibrosis (MF) and myelodysplastic syndromes (MDS). Geron has a collaboration with Johnson & Johnson’s (JNJ) subsidiary Janssen for imetelstat.

Geron has no approved product in its portfolio and its top line solely comprises license fees and royalties.

Imetelstat is being evaluated for myelofibrosis (MF) in a phase II IMbark study and for myelodysplastic syndromes (MDS) in a phase II/III IMerge study.

Geron announced in Apr 2017 that Janssen has completed the second internal data review of the two studies. Janssen said that the benefit/risk profile of imetelstat in the treated patients supports continued development in lower risk MDS indication. Owing to the favorable update, both trials are continuing unmodified.

If Janssen decides to proceed to Part 2 of IMerge (a larger, 170 patient, phase III study), patient enrollment is expected to begin in the fourth quarter of this year. Moreover, Geron announced in July that Part 1 of IMerge will be expanded to enroll additional patients in a refined MDS population to confirm the clinical benefit and safety observed from the current result.

Meanwhile, the results from IMbark study suggested that the clinical benefit and a potential overall survival benefit observed supports continuation of the trial without modifications. Janssen is expected to evaluate maturing data from the IMbark study next year, including an assessment of overall survival.

Geron’s shares have underperformed the industry so far this year. Shares of Geron rose 0.5% during the period compared with the industry’s gain of 6.2%.

However, we are concerned about Geron’s dependence on a single pipeline candidate. Geron has faced setbacks as imetelstat was placed under clinical hold in 2014. It also faced unfavorable findings in internal reviews of initial data from IMbark and IMerge studies. Any further setback may have significant negative impact on the company’s stock.

Geron Corporation Price and Consensus

Geron Corporation Price and Consensus | Geron Corporation Quote

Zacks Rank & Stocks to Consider

Geron carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the pharma sector include ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) , Aduro Biotech, Inc. (NASDAQ:ADRO) and Enzo Biochem, Inc. (NYSE:ENZ) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ACADIA Pharma’s loss estimates narrowed from $2.82 to $2.69 for 2017 and $2.07 to $1.99 for 2018 over the last 30 days. The company came up with a positive earnings surprise in two of the four trailing quarters with an average beat of 3.25%. The stock is up 8.2% so far this year.

Aduro Biotech’s loss per share estimates narrowed from $1.46 to $1.36 for 2017 and $1.54 to $1.26 for 2018 over the last 30 days. The company delivered a positive surprise in two of the four trailing quarters with an average beat of 2.53%.

Enzo Biochem’s loss estimates narrowed from 12 cents to 7 cents for 2017 and 11 cents to 3 cents for 2018 over the last 60 days. The company came up with a positive earnings surprise in the four trailing quarters with an average beat of 55.83%. The stock is up 59.3% so far this year.

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