Geron (GERN) Gains After FDA Green Lights Imetelstat Trial Resumption

Remy Merritt  |

representing a 26 percent gap up from the previous day’s close of $2.56. This marks a more-than 200 percent gain from a 52-week low of $1.07 and a significant turnaround from a painful drop on March 12, 2014 following the FDA’s full clinical hold of Geron’s cancer therapy, imetelstat.

The jump at the opening bell is a direct result of the FDA’s announcement that it has removed a partial hold on clinical trials of the drug’s efficacy in treating myelofibrosis. This release follows promising data submitted to the FDA regarding reversibility of chronic liver toxicity (hepatotoxicity) in patients receiving imetelstat.

Geron Bouncing Back from Bad Press

Imetelstat is a first-in-class cancer therapy drug for myelofibrosis and blood cell malignancies. It is one of the few drugs currently undergoing testing for its ability to inhibit telomerase activity, which is often high in cancer patients. The only drug currently approved by the FDA for use in myelofibrosis patients is Jakafi, manufactured by Incyte Corporation (INCY) . Following Geron’s gains, Incyte is down 0.89 percent.

A small-scale investigator-sponsored Phase 2 trial for imetelstat began in November 2012 by Dr. Avalew Tefferi of Mayo Clinic, with positive results reported June 2013. However, on March 11, 2014 the FDA announced a full clinical hold on Geron’s application for imetelstat’s approval as an investigational new drug (IND) in widespread public clinical trials.

This hold resulted in a more-than 60 percent drop in the stock, and analysts at MLV & Co. made a painful downgrade, cutting the price target from $9 to $2.

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Geron on the Upswing: Imetelstat Remains Strong Candidate in Cancer Therapy

Geron has since disclosed both negative and positive results in clinical trials, maintaining that many of the negative side effects reported are common in similar therapies. Dr. Tefferi’s results on hepatotoxicity reversibility mark a significant gain for the prospect of imetelstat and Geron’s potential as a leader in myelofibrosis treatment.

The corporation is now allowed to resume tests specific to myelofibrosis, but the full clinical hold on its IND application remains in place. Until this application is approved, Geron will not be allowed to submit imetelstat for large-scale public clinical trials. Imetelstat currently represents Geron’s entire pipeline of potential future products.

If results from the Myelofibrosis IST are positive and the hold on Geron’s IND application is removed, Geron will begin clinical trials for the drug in other cancers. Geron researchers remain hopeful that imetelstat has the potential to treat multiple blood and bone marrow cancers, which would significantly expand the drug’s market and push Geron to the forefront of ground-breaking oncology therapies.

A Small-Cap Star to Watch

Geron is among’s Small-Cap Stars. The release of the FDA’s hold appears to have Geron’s stock on the mend and returning to its former good health. has compiled data on dozens of fundamental metrics across hundreds of stocks to find those small-cap companies that are in the best position to succeed moving forward based on the factors previously successful small-cap companies had in common. Geron performs particularly well on two of these factors: enterprise value and value line beta.

Enterprise value is a measure of a company’s value in a potential buyout once debt has been subtracted from its market cap. Geron has low outstanding debt and would thus be a valuable to investors in the event of acquisition by a larger company.

Value line beta measures a company’s volatility relative to market movement; a beta of more than 1 suggests a company reports yields in positive sector movement above a one-to-one ratio. Companies such as Geron require some trading action before they pick up, at which point they tend to gain strength and take off.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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