Geron Corporation (NASDAQ:GERN) is back in focus again after the company’s CEO just laid down the gauntlet at the Piper Jaffrey conference on Tuesday. This, of course, comes in front of the monumentally important company presentation set for the ASH conference in just a few days.

The company also announced an analyst and investor event on December 10. And, for some reason, that has become a focus for the media and investors. But the real event is in coming days at the ASH conference. The analyst and investor event on Dec 10 is likely going to feel like mopping up after the game by this time next week. Things will go one way or the other at ASH.

Geron Corporation (NASDAQ:GERN) has been an interesting story for us throughout the past 3 months because the build-up and fallout from the September Janssen “diss” was such a dramatic market event and yet so much still seems unresolved.

It’s about to get resolved.


A Tale of Two Stories

The partnership with Janssen (J&J biotech R&D subsidiary) was meant to support non-dilutive funding of the Geron’s primary asset, imetelstat, a telomerase inhibitor for the treatment of hematologic myeloid malignancies. Without Janssen, the market has assumed that the path forward would likely be far more dilutive for Geron investors.

In addition, so goes the assumption, JNJ likely backed out because it has already seen the data we will gain access to at ASH (the American Society of Hematology Annual Meeting and Exposition. December 1-4, 2018. San Diego, CA.).

However, as we have noted, there is a reasonable slice of the probability pie that contains the idea that Janssen pulled out of the arrangement as a relative judgment about imetelstat rather than an absolute one.

In a prior piece, we summarized this analytic quandary through two stories:

Story A: Janssen and JNJ ditched the CLA because the data for IMbark was clearly a non-starter for the drug. They saw there was no hope of bringing it to market as a blockbuster new direction for cancer therapy (which was always the point of the CLA involvement – that type of potential). And, so, upon seeing the trend in the data, the partnership was ditched.

Story B: Janssen and JNJ ditched the CLA because, while it was an extremely difficult decision, the management team saw slightly more risk to maintaining that partnership because of a portfolio construction concern and another major opportunity that it preferred. The data from IMbark, while showing some promise, did not demonstrate enough security in its potential conclusions to justify avoiding a new funding deal with another drug that it believed may ultimately have more promise.

As we get set to find out, the market is bracing itself once again. The drama here is very real for both shorts and longs. The company is truly a one-hit wonder. If Geron shows us Story A at ASH, then it’s really “all she wrote” for GERN after all these years.

However, if it turns out to be Story B, there is a big new chapter ahead that deals in how well the stock responds to pricing some kind of new offering.

One interesting point to throw into the mix – to circle back around to the beginning – is the company’s CEO’s remarks at this week’s Piper Jaffrey event:

“So, as many of you know, we, for the last number of years were partnered with Janssen. Janssen decided to give this drug back, that in the rearview mirror from us, from our perspective, we feel more confident than ever in the drug, we have two oral presentations at ASH [ph] that I think really confirm the exciting nature of the drug and our proliferative neoplasms and in particular, in lower risk MDS and ultimately, potentially in MF.”

In other words, Mr. Scarlett is touting Story B. We won’t have to wait much longer now to find out.

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