Geron Corporation (NASDAQ:GERN) made a number of announcements this week that triggered a selloff in its stock. Did the market overreact to the reports regarding the company’s most advanced candidate or is there a valid reason to be worried about the future of Geron?
Imetelstat is Geron Corporation (NASDAQ:GERN)’s most advanced drug candidate and it is being tested for a number of indications including blood cancer myelofibrosis and myelodysplastic syndromes (bone marrow disorders).
Geron is partnering with Johnson & Johnson (NYSE:JNJ) subsidiary called Janssen in the development of imetelstat.
Geron Corporation (NASDAQ:GERN) report that results from an internal review of imetelstat for myelofibrosis indication showed that a certain dose of the compound didn’t fare well in study patients. The lower dose of imetelstat (4.7 mg/kg) didn’t generate statistically significant clinical activity to support continued study. As such, Janssen recommended closing of new patient enrollment to the 4.7 mg/kg dose arm.
Attention shifts to higher dosage
Instead, Geron and Janssen will focus their attention and resources on further investigating a higher dose of imetelstat (9.4 mg/kg) in myelofibrosis patients. Internal review has revealed that imetelstat is showing positive efficacy trends in myelofibrosis subjects.
The other update that Geron Corporation (NASDAQ:GERN) provided concerned the outcomes from trial of imetelstat in myelodysplastic syndromes patients. Internal review of the study showed that imetelstat achieved encouraging safety and efficacy results that were consistent with those from a pilot study at the Mayo Clinic.
What’s wrong with the updates?
While the updates were generally positive, the market clearly didn’t like the part that talks about ending investigation of the lower dosage of imetelstat in myelofibrosis. They see that move as having increased the risk profile of imetelstat, yet the candidate is critical to the future of Geron. That explains the recent selloff in the stock. Shares of Geron are down almost 56% YTD and 39% over the last one year.
For some, though, the dip in Geron Corporation (NASDAQ:GERN) share price could provide a lower entry point into the stock.