2023-07-18 15:56:06 ET
Summary
- Geron is seeking FDA approval of imetelstat, a promising telomerase inhibitor for hematologic malignancies.
- Imetelstat, a pioneering telomerase inhibitor, could capture 10-15% of the $2.4 billion global MDS treatment market, potentially generating up to $360 million in peak annual revenues.
- Despite promising results, potential investors are advised to proceed with caution due to potential risks associated with imetelstat and the competitive market, maintaining a "Hold".
Introduction
Geron ( GERN ) is a late-stage biopharmaceutical company specializing in therapies for hematologic malignancies. Their key innovation, imetelstat, is a pioneering telomerase inhibitor that could revolutionize treatment. After positive Phase 3 trial results, they plan to seek FDA approval later this year, potentially enabling a commercial launch by 2024. Imetelstat's potential disease-modifying abilities make it unique in myeloid hematologic malignancies. In addition to lower-risk myelodysplastic syndromes, imetelstat is being developed to treat multiple myeloid malignancies through ongoing clinical trials.
In my past analysis , I recognized Geron's imetelstat as a significant breakthrough in lower-risk MDS treatment, underscored by promising results from the IMerge Phase 3 trial. Despite some side effects, the drug showed broad effectiveness across various MDS subtypes and did not lead to severe clinical consequences. I anticipated Geron's 2023 FDA submission could lead to a 2024 launch in the US and Europe, carving a niche for the company in the MDS market. Imetelstat could capture 10-15% of the $2.4 billion global MDS treatment market, potentially generating up to $360 million in peak annual revenues. Geron ended 2022 in a strong financial position, further bolstered in 2023, paving the way for commercialization. However, considering potential risks associated with imetelstat and the competitive market, I maintained a "Hold" rating for Geron, advising potential investors to proceed with caution.
Recent developments: Geron's stock rose after announcing the New Drug Application [NDA] submission of imetelstat for the treatment of "transfusion-dependent anemia in adult patients with low- to intermediate-1 risk myelodysplastic syndromes who have failed to respond, or have lost response to, or are ineligible for erythropoiesis-stimulating agents."
The following article reviews Geron in the context of the recent NDA submission.
Q1 2023 Earnings
Before we begin, let's first review financials. In Q1 2023, Geron reported a net loss of $38.1 million, higher than the $30.1 million loss in Q1 2022. Revenues dropped to $21,000 from $123,000 year-on-year, mostly from royalty revenues from divested stem cell assets. Operating expenses rose to $40.1 million due to higher clinical trial costs and increased personnel. Interest income surged to $3.9 million from $112,000 in Q1 2022, reflecting higher yields on marketable securities and a larger investment portfolio. Interest expenses increased to $1.9 million, reflecting higher interest rates. Geron reaffirmed its 2023 financial guidance, expecting total expenses between $210-$220 million, reflecting costs to support regulatory submissions, clinical trials, manufacturing commercial inventory, and potential commercial launch preparations for imetelstat.
Analyzing MDS Data and Market Opportunity
The IMerge Phase 3 trial of Geron's imetelstat enrolled lower-risk MDS patients and reported significantly positive results. Primary and secondary endpoints of 8-week and 24-week transfusion independence were achieved with high statistical significance in imetelstat-treated patients compared to placebo. Patients treated with imetelstat also saw a significant increase in hemoglobin levels and a reduction in RBC transfusion units. The safety profile was consistent with prior experiences, with most adverse events being manageable and reversible. These findings are particularly promising given the substantial unmet need in treating lower-risk MDS patients with symptomatic anemia. As less than half of such patients respond to frontline ESA therapy and most lose the response in less than two years, imetelstat could represent a novel option for patients, especially for those with high transfusion burden and without ring sideroblasts.
Analyzing the market opportunity, the significant improvements offered by imetelstat, such as high response rate, durability of response, and preliminary evidence of disease modification, indicate a potential to capture a significant share in the MDS treatment market. This is especially true given the drug's manageable safety profile. However, competition could come from other emerging treatments or existing therapies. It would be crucial to monitor the progression of other clinical trials in the same space and any changes in treatment guidelines or practices.
My Analysis & Recommendation
In conclusion, Geron's imetelstat shows significant promise, particularly for lower-risk MDS patients for whom existing treatments have been ineffective. The remarkable results from the IMerge Phase 3 trial, coupled with the manageable safety profile, offer optimism about its market prospects, potentially reshaping the landscape of hematologic malignancies treatment. Investors should pay close attention to the FDA's decision on Geron's application in mid-2023, a critical milestone that could pave the way for a commercial launch as early as 2024.
Compared to existing therapies, imetelstat has demonstrated superior performance, offering benefits like a high response rate, increased hemoglobin levels, and reduction in transfusion units. This potential disease-modifying treatment could provide a valuable alternative for patients who fail to respond to frontline ESA therapy, addressing a significant unmet medical need.
However, it is crucial not to overlook the competitive environment and the potential obstacles ahead. It is important to closely monitor the emergence of other treatments, changes in treatment guidelines, and market trends that could affect Geron's position. Taking these factors into account along with the recent financial performance, I recommend maintaining a "Hold" rating for Geron. Investors need to weigh the potential rewards of imetelstat's success against the inherent risks associated with drug development and regulatory approval processes. As we move forward, gaining more clarity on imetelstat's regulatory status and the evolving competitive landscape will provide a clearer understanding of Geron's long-term potential. Additionally, it would be prudent to assess where imetelstat fits in once it receives FDA approval before considering a potential re-rating.
For further details see:
Geron: Awaiting Marketing Approval And Role Clarity Of Imetelstat Before Investing