Geron Corporation (NASDAQ:GERN) shares are taking a beating today after the company gave a more in-depth presentation on the IMbark data series and the potential for moving to phase 3 testing.

For long time fans of imetelstat, it was a reinforcing experience because the data clearly suggest that imetelstat has tremendous value as a drug technology for oncology and blood cancers. However, the stock’s failure to rise on the new information, at the same time, provides further confirmation for bears sitting short the stock and looking for financial oblivion in GERN. So, what’s really going on here?

Geron Corporation (NASDAQ:GERN) has a “rock and hard place” kind of situation at present. But, from a very dispassionate position (we have no interest in the stock, financially, nor any relationship, official or otherwise, of that nature), we would assume this leads at some point to some sort of asset sale or takeout offer simply because the data suggests remaining promise for a very differentiated drug technology and the company has strong IP protection in place.

However, we would suggest that company management handled today’s event in a less-than-inspired manner by not directly addressing the elephant in the room: what happened with the JNJ deal? That’s the elephant and everyone knows it. There’s simply no way to just march forward and suggest that there are no issues with the IMbark data, and at the same time suggest that new partners or deals are possible, without, at least to some extent, directly addressing the lack of continuation for the JNJ CLA.

Shares are breaking down out of a technical basing pattern as a result, suggesting that some of the heat hitting shares today is a run of stop-loss orders under the 3-month range lows.

We would suspect that this is speculative money from folks who came into the picture after the JNJ CLA break-up to get involved on the possibility that the company would eventually reveal data worthy of a clear new partnership deal.

At this point, the company is likely going to have to dilute shareholders to raise enough cash to make a new case, even though the technology does appear to be worthy of some big interest at some point.

In our experience, bigger players in the space would prefer to pick up assets on the cheap if possible. And the likelihood of such an outcome here may be relatively high as we move forward.

For newer investors in the name, shares right now offer something like an options play, with about $1.38 in premium. It may be worth many times that down the line, but it would be best to forget about it in between and make your peace with any potential outcome here.

The technology is very good, management has not delivered particularly well, and patience is a virtue – but so is a lack of trading leverage and a diversified mindset.

 

Skycam

Geron Corporation (NASDAQ:GERN) operates as a biopharmaceutical company. The company supports the clinical stage development of imetelstat, a telomerase inhibitor for the treatment of hematologic myeloid malignancies.

It has a sunsetting collaboration and license agreement with Janssen Biotech, Inc. to develop and commercialize imetelstat worldwide for indications in oncology, including hematologic myeloid malignancies and other human therapeutic uses. Janssen is a subsidiary of Johnson & Johnson (NYSE:JNJ). That collaboration and licensing agreement was terminated late last month, as noted above.

GERN, founded in 1990 and based in Menlo Park, California, has been running two key studies.

IMerge is a two-part clinical trial evaluating imetelstat in transfusion-dependent patients with Low or Intermediate-1 risk myelodysplastic syndromes (MDS) who have relapsed after or are refractory to prior treatment with an erythropoiesis stimulating agent, or ESA. The primary efficacy endpoint is the rate of red blood cell transfusion independence lasting at least 8 weeks. Part 1 is a Phase 2, open-label, single-arm trial of imetelstat, and Part 2 is designed to be a Phase 3, randomized, controlled trial. Part 2 has not yet begun.

IMbark is a Phase 2 trial in patients with Intermediate-2 or High-Risk myelofibrosis (MF) who have relapsed after or are refractory to prior treatment with a JAK inhibitor. This was the primary focus for the GERN/JNJ collaboration.

Geron Corporation (NASDAQ:GERN) managed to rope in revenues totaling $165K in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 1.2%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($166.6M against $4.5M).

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