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Summary

  • The lift of the Mayo Clinic myelofibrosis partial clinical hold practically guarantees hold will be lifted off Geron sponsored myelofibrosis Phase II trial initiation.
  • Geron’s Imetelstat provides biotech investors a unique opportunity to invest in a drug in which disease modifying activity is already established and there is no competition in sight.
  • Several upcoming catalysts set to send stock higher including initiation of Geron myelofibrosis trial, expanded disease indications and partnership.

In March and May, I wrote articles detailing why I believed the FDA clinical hold on Geron's (NASDAQ:GERN) revolutionary myelofibrosis drug Imetelstat would be temporary and urged investors to purchase shares for a quick double. As expected, on June 12th, the FDA announced the release of the partial clinical hold on the Mayo Clinic sponsored study of Imetelstat in myelofibrosis sending the shares up to $3.5, roughly double from the price of my last article in May. With shares settling back to ~$3 and the risk of the clinical hold removed, I think the stock is set to explode higher with significant catalysts on the horizon.

Mayo Clinic Myelofibrosis Trials Resume

As most investors know, in March the FDA placed a full clinical hold on Geron's essential thrombocythemia (ET), polycythemia vera (PV) and multiple myeloma trials due to persistent low grade liver functionality test (LFT) abnormalities observed with chronic Imetelstat exposure. In addition, the FDA placed a partial clinical hold on the Mayo sponsored myelofibrosis Imetelstat study, allowing those receiving benefit to remain on the drug but preventing other patients from enrolling. The FDA required Geron and the Mayo Clinic to provide follow-up data on patients after drug removal and evidence that LFTs were reversible or not problematic. Also requested was data on liver toxicity after chronic drug administration in animals. I argued in my previous articles that the benefits of the drug greatly outweighed any hepatotoxicity risk as it is the only drug ever developed that has resulted in complete or partial remission of late stage myelofibrosis. Furthermore, patients in the ET trial had been on the drug up to 3 years with no progression of LFT abnormalities. Importantly, this is close to the median survival of patients with intermediate 2 or high risk myelofibrosis in which no effective treatment options currently exist. The data compiled and presented to the FDA by world-renowned myelofibrosis expert Dr. Ayalew Tefferi of the Mayo Clinic appears to have addressed the concerns of the FDA regarding LFTs in myelofibrosis patients, lifting the partial hold and allowing Dr. Tefferi to continue enrolling new trials studying the drug.

Geron's Phase II Myelofibrosis Trial Back on Track

The FDA's full clinical hold on Geron's Phase II ET/PV trials was warranted as these patients are already treated sufficiently and the disease does not drastically affect survival. Geron has stated repeatedly that this was a proof of principle study and Geron has no intention of using Imetelstat for ET treatment. Their focus is on myelofibrosis and other high unmet medical need disorders such as acute myelogenous leukemia. Although there remains a full clinical hold on Geron sponsored trials, it is just a matter of time before the company will be allowed to begin their myelofibrosis Phase II trial. Since Geron did not have any company sponsored myelofibrosis studies going, they will rely on the patient data submitted to the FDA by Dr. Tefferi. In addition, Geron has analyzed data in mice and monkeys following Imetelstat treatment and could not find any evidence of liver damage or elevated LFTs. The animal data coupled with Dr. Tefferi's data, for which the FDA has already given the nod, will likely enable Geron to start their myelofibrosis Phase II trials in the beginning of 2015.

Upcoming Catalysts

There are several upcoming catalysts, which could cause the stock to move up significantly.

  • The complete or partial FDA lift of the clinical hold on Geron sponsored clinical trials, enabling them to begin enrolling myelofibrosis patients in Phase II trials. In my opinion, this one is practically guaranteed. With the FDA giving Mayo Clinic the green light to continue all myelofibrosis related Imetelstat studies, it only makes sense that Geron sponsored myelofibrosis trials will receive the same go ahead.
  • Data showing clinical efficacy in additional myeloproliferative disorders with high unmet clinical need. Mayo Clinic has enrolled patients with refractory anemia with ringed sideroblasts, or RARS, and patients with myelofibrosis that has transformed into acute myelogenous leukemia, known as blast-phase myelofibrosis. This data is expected to be released at the American Society of Hematology (ASH) Annual Meeting in December.
  • Partnership announcement with large pharmaceutical or biotech to facilitate comprehensive development of Imetelstat and clinical trial progression. CEO Dr. Scarlett has stated that this is something they would explore, especially if the clinical indications for Imetelstat are expanded with positive data in other myeloproliferative disorders. Possible suitors with current interest in myelofibrosis are Gilead Sciences (NASDAQ:GILD), Incyte (NASDAQ:INCY), Novartis (NYSE:NVS), Eli Lilly (NYSE:LLY), Celgene (NASDAQ:CELG), Sanofi (NYSE:SNY) and Roche. These companies are all working on drugs, which treat the symptoms of myelofibrosis but do not have disease modifying activity like Imetelstat.

Conclusion

The lift of the Mayo Clinic myelofibrosis partial clinical hold should enable Geron to initiate its own Phase II myelofibrosis trials soon. As Geron stock approached $6/share before the hold was put in place, I believe the stock remains significantly undervalued at $3/share. Geron's Imetelstat provides biotech investors a unique opportunity to invest in a drug in which disease modifying activity is already established and there is no competition in sight with a drug that can offer complete or partial remissions in myelofibrosis. Geron's market cap currently sits at $460 million. For comparison, Incyte's drug Jakafi, a JAK2 inhibitor, is for myelofibrosis treatment and the company's only drug on the market and they currently demand a $9.5 billion market cap. With numerous catalysts on the horizon with high probability of success and over $150 million in cash, Geron provides investors another chance to double or triple their money. I continue to accumulate shares at these levels.

Source: Geron Set To Explode As FDA Releases Partial Clinical Hold On Imetelstat Myelofibrosis Trial