Geron Corporation (NASDAQ: GERN) has been a hot topic among biotechnology investors for some time now, and for good reason. Recently, investors have been paying attention to the overall survival rate data that was released from the IMbark clinical trial, which is admittedly impressive. This has led to a dramatic run that the stock remains on today. In fact our partners at Trade Ideas sent out yet another alert surrounding the stock this morning as it continues to climb. Currently (11:57), GERN is trading at $4.59 per share after a gain of $0.36 per share or 8.51% thus far today. However, there are some real risks to consider here. Today, we’ll talk about:
- What GERN does;
- recent data surrounding the IMbark trial;
- why this data may be misleading;
- the company’s pipeline;
- risks associated with investing in Geron Corporation;
- and what to watch for ahead.
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What Does GERN Do?
Geron is a clinical stage biotechnology company. This means that while the company has no approved medications on the market today, it does have a treatment candidate that is currently in the midst of clinical studies. In particular, the company is focused in the oncology space with its flagship product candidate known as Imetelstat.
Imetelstat is a first in class treatment known as a telomerase inhibitor. It is also the company’s sole product candidate. The treatment was designed to combat hematologic myeloid malignancies and is currently the topic of two clinical trials. Both clinical trials surrounding the flagship product at GERN are being conducted by Janssen (NYSE: JNJ) as a result of an exclusive worldwide collaboration and license agreement.
These two clinical trials are known as IMbark and IMerge. IMbark is assessing Imetelstat as a treatment for the myelofibrosis indication and IMerge is assessing the treatment for the myelodysplastic sydnromes indication. IMbark is currently in Phase 2 while IMerge is in Phase 2/3 clinical studies.
Recent Data From IMbark Excites Investors
Recent data released by GERN from the IMbark clinical trial proved to be overwhelmingly positive. In fact, overall survival rate proved to be a big cause of excitement. In recent data, the company announced median follow up data of 19 months. At the time of the data cut, January 2018, GERN said that median overall suvival had not been reached in either dosing arm and that with a greater than 19 month overall survival rate, the data looks promising.
Digging deeper, the data definitely does look promising. At the end of the day, published clinical and real-world results estimate a lower overall survival rate after discounting JAK inhibition therapy. In this case, median overall survival rate is estimated to be between 14 and 16 months. Not to mention, some analysts are already calling for some seriously positive numbers with analysts at Stifel saying that the data suggests that the median overall survival in patients on the imetelstat treatment could come in around 22 to 24 months. If this is the case, Geron is sitting on a pretty serious breakthrough.
Why This Data May Be Misleading
While it doesn’t look like GERN intentionally meant to mislead investors here, it does look like investors are indeed being misled by omitting attention that should be given to the quality of this data. When we look at patient populations associated with trials mentioned, a big issue starts to arise. The issue was first brought up by Alpha Exposure on Seeking Alpha in this article.
Essentially, the data looks positive. However, when we look at inclusion and exclusion criteria for the IMbark trial, we see that it is ultimately a trial with a healthier population than others, meaning that a longer overall survival rate is to be expected anyway. In the criteria for the GERN trial, only ECOG 0-2 patients can be enrolled. The same criteria calls for the exclusion of patients with a peripheral blood blast count of >=10%. Ultimately, none of the patients with this condition are healthy, but the patients that are most unhealthy have peripheral blood blast counts of >= 10%. The trial also excluded ECOG 3 patients. These patients are the most sick with this condition, generally confined to a bed or chair for more than 50% of waking hours and are only capable of limited self care.
At the end of the day, considering the patient population in the IMbark trial, and patient populations in other trials that did include patients that were a bit more unhealthy, the comparison is tainted. The reality is that the positive data isn’t quite as positive when you look at how the data set was compiled.