Geron represents a compelling investment opportunity for growth-oriented investors with a tolerance for risk. Geron's share price has been trading close to the company's cash value following Janssen's decision to discontinue their Imetelstat development program. The myelofibrosis and MDS indications offer relatively small patient populations, and Janssen's discontinuation was most likely a function of the perceived opportunity cost of deploying their resources towards the smaller Imetelstat indications as compared to larger pharmaceutical opportunities within their reach.
NOTE: Janssen's execution of a massive $3.7B licensing agreement with Arrowhead Pharmaceuticals approximately one week after dropping their Geron collaboration is a good example of Janssen allocating their resources to larger revenue opportunities.
Imetelstat Patent Protection (Background)
By way of US7494982, Geron has broad patent protection on a telomerase inhibitors (including the specific imetelstat formulation) that currently extends into 2025 with further time extensions likely to be awarded (per Geron).
By way of US20180036336, Geron is likely to obtain patent protections on the combined use of a telomerase inhibitor with a BCL-2 inhibitor as a treatment for various hematologic and lymphoma cancers extending into 2036.
Janssen's 2018 MDS Patent Application
On 7/15/2018 and 7/28/2018, Janssen filed US non-provisional and PCT patent applications, respectively, for the use of a telomerase inhibitor as a treatment for MDS patients who are naïve to HMA and Lenalidomide treatments. These patent applications are based on the positive results achieved in the IMerge clinical trial that were the subject of oral presentations at the 2018 EHA and ASH conferences.
The US & PCT patent applications were first filed as a US provisional patent application in July 2017. If the above applications are granted, they will result in Geron having patent protections for the use of a telomerase inhibitor (e.g. Imetelstat) as a treatment for MDS patients naïve to HMA and Lenalidomide through July 2037. The PCT patent application number is WO2019023667A1. The corresponding US non-provisional patent application number is US20190030064A1.
It should be noted that Geron’s new Chief Medical Officer (Aleksandra Rizo) is listed as the lead inventor on these new MDS patent applications. Janssen’s Jacqueline Bussolari is the only other named inventor on the applications. Ms. Bussolari was involved with most of Janssen’s Imetelstat development efforts, and I hope to see her become a Geron employee in the near future.
Janssen's 2018 Manufacturing Patent Application
On 7/9/2018, Janssen filed a PCT patent application (WO2019011829A1) in pursuit of patent protection relating to an improved Imetelstat manufacturing process. All three of the named inventors were Janseen employees located in Belgium, and, per the application, the inventors discovered “imetelstat can be prepared using a 3-step cycle without an additional capping step with nearly identical yield and purity compared to the prior art 4-step cycle that uses a specific capping step. Eliminating the capping step from each cycle benefits the overall process by reducing the number of cycle steps by 22% (from 54 to 42 steps) and consequent reduction of process time.”
The PCT application was first filed as a European (EP) application on 7/10/2017. If the PCT application results in a granted patent, Geron will be afforded patent protection until July 2037. It should be noted that Janssen likely made a separate US non-provisional filing which (if filed) should publish in the near future.
The above referenced patent applications indicate Janssen’s development team continued to believe in and invest in the imetelstat development program up to Janssen’s business decision involving the Imetelstat development program. By way of their discontinuation decision, all of Janssen’s intellectual property developed during the collaboration now belongs to Geron. As a result, the legal assignment, prosecution, and expenses associated with these pending applications will transfer to Geron in the near future.
Geron represents a compelling investment opportunity for growth-oriented investors with a tolerance for risk. Regardless of Janssen's decision, the IMerge and IMbark abstracts presented at the 2018 ASH conference highlight Imetelstat's promise in both the MDS and the myelofibrosis indications. Furthermore, with the Phase 2 studies complete, Geron is now a late-stage oncology company with two promising Phase 3 registration trial opportunities. As a company, Geron is a small biotech company with 100% ownership of an active drug with proven efficacy in multiple hematological indications, promising preclinical data involving their drug in combination with other compounds, no debt, sufficient cash for the next 12-24 months, broad patent protections involving it's targeted oncology indications, and a newly appointed and highly-qualified Chief Medical Officer in Aleksandra Rizo who previously led Janssen's Imetelstat development program.
Many patent applications do not result in formal patent protections due to insufficient novelty over the prior art. Furthermore, Imetelstat patent protections should not be viewed as a guarantee of Geron's ability to achieve future regulatory approvals and/or commercial success.
Execution risk and equity dilution are significant risks as Geron assumes full control & financial responsibility for the upcoming Phase 3 registration trials in MDS and Myelofibrosis. Geron’s ability to survive will be dependent in part on the capabilities & execution of a third party CRO who will oversee the upcoming Phase 3 registration trial in MDS. Furthermore, Geron may need and/or choose to raise additional capital in support of their ongoing development programs.
Disclosure: I am/we are long GERN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.