Geron: TLR Is 10 Months Away

May 03, 2022 3:52 PM ETGeron Corporation (GERN)WDNA, BBC, SBIO, XBI, LABU, BIB, IWM, IWN, IBB, VTI66 Comments5 Likes

Summary

  • Top line results or TLR from the IMerge phase 3 trial will be out by January 2023.
  • This is a confirmatory trial that may lead to an NDA, if successful.
  • The CEO says he can't wait. Guess what, neither can we.
  • Looking for more investing ideas like this one? Get them exclusively at The Total Pharma Tracker. Learn More »

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Since my last coverage of Geron Corporation (NASDAQ:GERN), the stock is up 40%. It was on a rising streak that became stagnant, probably because of the stock offering it did at the end of March. Besides that, there were earnings, which haven't yet been covered here. So, let me take a look at what's been happening at Geron.

To quickly recap what I said in my previous article, Geron's major upcoming catalyst is topline data from the confirmatory phase 3 IMerge trial. This trial is fully enrolled. You can expect data readout by January 2023. Low risk myelodysplastic syndrome or LR-MDS is the lead indication. Across the U.S. and EU, there's a $1.2bn market for the indication.

In my previous report, I mentioned that KOLs think that imetelstat may address LR-MDS patients who are ringed sideroblast negative. Now, this is a subtype of MDS patients where diagnosis is challenging because without ring sideroblasts, it may look like myeloproliferative disorder (MPD) even though it is MDS. As presented at ASCO 2 years ago:

Imetelstat produced meaningful and durable transfusion independence (TI) in heavily transfusion-dependent patients with erythropoiesis stimulating agent-relapsed/refractory non-del(5q) LR MDS. Eight- and 24-week TI and hematologic improvement-erythroid were achieved in different subsets of LR MDS, irrespective of the presence of ring sideroblasts.

Of the more than 100,000 LR-MDS patients in the U.S./EU5, a large fraction become ESA (erythropoietin stimulating agents) relapsed or refractory. 75% of these patients are ring sideroblast negative. This adds up to 33,000 patients, or $1.2bn in potential peak revenue for imetelstat.

About the trial catalyst, John A. Scarlett, M.D., Chairman and Chief Executive Officer, said:

With completion of enrollment in IMerge Phase 3 last October, we look forward to top-line results from that trial in early January 2023. If those results confirm similar safety, as well as the depth, breadth and durability of transfusion independence that was observed in our Phase 2 trial, then upon approval of an NDA, we expect our U.S. commercial launch of imetelstat in lower risk MDS to occur as early as the first half of 2024.

The Russian invasion of Ukraine has produced a small glitch in the plans here. A total of 4 patients are involved - 2 in each country. The CEO said in the earnings call:

Given current global events, I would like to make a few comments on the impact of the ongoing conflict in Ukraine and Russia on this trial. We only have two patients at one site in Ukraine. We know that this site is currently close to patient visits and we do not know whether these two patients will be lost to a follow-up. In Russia, we have two patients at two sites and these sites are currently open to patient visits. At this time, we do not expect an impact to the timing of the TLR due to this conflict. Like all of you, we're closely monitoring this evolving situation.

As for the IMpactMF Phase 3 trial in refractory MF, this will produce interim data in 2024. So, if the plan works out, there will be a number of catalysts within a close compacted period of time. However, about MF, there's a scheduling detail we should note:

The final analysis for OS is planned to be conducted after more than 50% of the patients enrolled in the trial have died. An interim analysis of OS is planned to be conducted after approximately 70% of the total projected number of events for the final analysis have occurred. If the pre-specified, statistically significant difference in OS between the two treatment arms is met at the interim analysis, it is possible that data from the interim analysis could support a registration filing. Both the planned interim and final analyses are event-driven and could occur on different timelines than currently expected.

This is 3 years away, but I am guessing there may be delays in 2025 if the drug actually works (i.e., fewer patients have died because imet helped them stay alive longer). If this happens, the market may not figure it out and react negatively.

Financials

GERN now has a market cap of $531mn, a short interest of 6%, and a cash balance of $212mn at the end of 2021. They did a $75mn offering in late March, which closed in April. I am guessing this fund balance does not account for the money from the offering. The company said the $212mn balance was enough for Q1 2023. So the extra funds should give them another two quarters of lifeline.

Research and development expenses for the three and twelve months ended December 31, 2021, were $24.2 million and $85.7 million, respectively, while G&A was $7.9 million and $29.7 million, respectively. This gives us another idea of their cash runway. Clearly, $75mn is simply too little for them to last more than two quarters at best, given their trial programs.

Bottom Line

For long term Geron shareholders, it has been a long ride. We are 10 months away from when management and the trial both have to give us a definite statement on the future of imetelstat. There can be no obfuscation, no double meanings of the trial data. Investors need to be very decisive about what they will do with their shares once TLR (topline results) are announced.

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