2023-04-27 11:11:48 ET
Summary
- Geron is planning to submit a New Drug Application (NDA) for imetelstat, a treatment for low to intermediate-1 risk myelodysplastic syndromes (MDS), in 2023 after favorable Phase 3 trial results.
- Despite a net loss of $141.9 million in 2022, Geron maintains a strong financial position, having raised $273.1 million in 2023 via a public offering and the exercise of warrants.
- The IMerge Phase 3 trial for imetelstat showed significant improvements over placebo in achieving transfusion independence, with positive effects across various MDS subtypes and transfusion burdens.
- Imetelstat did exhibit a higher rate of hematologic toxicities and liver function abnormalities, but these did not lead to a significant increase in severe clinical consequences.
- A "Hold" rating is recommended for Geron's stock, acknowledging the potential of imetelstat for MDS, but advising caution due to potential risks and competition in the MDS treatment landscape.
Introduction
Geron (GERN) is a late-stage biopharmaceutical company that focuses on the development of potential therapies for hematologic malignancies. The company's primary drug candidate, imetelstat, is a novel telomerase inhibitor. Imetelstat is primarily aimed at addressing Low or Intermediate-1 risk myelodysplastic syndromes ((MDS)). Geron is also conducting ongoing trials, such as IMpactMF, IMproveMF, and IMpress, to explore imetelstat's potential for other myeloid hematologic malignancies.
Recent events: Following positive outcomes from its IMerge Phase 3 and previous Phase 2 clinical trials in January 2023, Geron aims to submit a New Drug Application (NDA) to the FDA in the U.S. and a marketing authorization application [MAA] in Europe in 2023. According to Geron, if approved, the commercial launch of imetelstat could occur in the U.S. in 2024 and in Europe by the end of 2024.
In this article, we will examine the potential of imetelstat in lower-risk MDS and its possible impact on Geron's shareholders.
Financials
In 2022, Geron reported a net loss of $141.9 million, an increase from $116.1 million in 2021. This was attributed to a decrease in revenues due to a reduction in royalties from sales of cell-based research products from divested stem cell assets. Operating expenses also rose in 2022, driven by increased research and development expenses due to a higher headcount and consulting costs, and higher general and administrative expenses related to additional headcount, commercial preparatory activities, and lawsuit settlement costs. However, Geron closed 2022 with a robust financial position, having $173.1 million in cash and marketable securities. In the initial months of 2023, Geron further strengthened its financial position through a public offering, which fetched $213.3 million in net cash proceeds, and an additional $59.8 million from the cash exercise of outstanding warrants. As of the fourth quarter of 2022, Geron reported a net loss of $42.6 million, compared to $32.0 million in the corresponding period of 2021. The company currently has a principal debt of $50.0 million outstanding.
Understanding Myelodysplastic Syndromes
MDS is a heterogeneous disease that necessitates personalized treatment. The treatment course is influenced by several factors such as the severity of symptoms, MDS classification, the patient's overall health, and personal preferences. In lower-risk MDS, treatment depends on the severity of symptoms and cytopenias (abnormal blood cell levels). Asymptomatic patients are typically monitored, while symptomatic patients may receive lower-intensity therapies like growth factors, lenalidomide, and targeted agents. Some might opt for intensive treatments or choose supportive care alone.
Treatment for higher-risk MDS is dependent on the patient's medical fitness and pathological features. Medically-fit patients may select between intensive treatments like chemotherapy and transplantation, and lower-intensity therapies. Medically-unfit, but not frail patients, often receive lower-intensity therapies or supportive care alone. Frail patients are more likely to receive only supportive care.
Imetelstat and its Clinical Implications
In January 2023, the IMerge Phase 3 clinical trial for imetelstat was successful . The study included 178 patients, with 118 taking imetelstat and 60 taking a placebo. Imetelstat displayed significant results compared to the placebo, meeting primary and key secondary endpoints.
Patients took the medication for approximately 7.8 months on average for the imetelstat group and 6.5 months for the placebo group. The median time on the study was 19.5 months for imetelstat and 17.5 months for the placebo.
The trial demonstrated a significant number of patients achieved transfusion independence (TI) at eight weeks (39.8% on imetelstat vs 15.0% on placebo) and 24 weeks (28.0% on imetelstat vs 3.3% on placebo). Durable transfusion independence was observed with imetelstat, with a median duration nearing one year. Furthermore, a significant increase in hemoglobin levels and a decrease in the number of red blood cell units transfused was observed in the imetelstat group.
The trial also demonstrated positive outcomes across different subtypes of MDS and different transfusion burdens. While results were not statistically significant when using the International Working Group (IWG) 2006 criteria to measure erythroid hematologic improvement (HI-E), the revised 2018 IWG criteria showed a highly significant HI-E rate with imetelstat versus placebo, which placed more emphasis on the durability of response.
Overall, imetelstat's reported rates of transfusion independence seem promising, particularly given the durable response observed in the trial. When compared to other treatments, imetelstat's efficacy appears competitive, even though the effectiveness of treatments can vary depending on the specific treatment being compared. For example, erythropoiesis-stimulating agents (ESAs) have varying response rates (~50%), and lenalidomide's effectiveness is limited to patients with a specific genetic abnormality.
Safety Assessment of Imetelstat
The safety profile of imetelstat revealed that a higher percentage of patients treated with the drug experienced all grades of abnormalities in Alanine Aminotransferase ((ALT)), Alkaline Phosphatase (ALP), Aspartate Aminotransferase ((AST)), and Bilirubin compared to the placebo group. However, the differences were less pronounced for severe (Grade 3) abnormalities, suggesting that while imetelstat may be associated with a higher overall rate of Liver Function Test (LFT) abnormalities, these are generally not severe.
Hematologic toxicities such as thrombocytopenia, neutropenia, and anemia were significantly more common in the imetelstat group compared to the placebo group, both in terms of all grades and severe (Grade 3/4) events. Despite the higher rates of hematologic toxicities, the rates of severe clinical consequences, such as Grade >3 bleeding events and infections, were not significantly different between the imetelstat and placebo groups.
My Analysis & Recommendation
Geron's imetelstat has shown significant promise in the treatment of lower-risk MDS, as evidenced by the results of the IMerge Phase 3 clinical trial. This first-of-its-kind telomerase inhibitor demonstrated a statistically significant and clinically relevant improvement over the placebo, particularly in achieving transfusion independence, with a durable response nearing one year. Furthermore, the drug exhibited broad-spectrum efficacy across various MDS subtypes and transfusion burdens.
However, imetelstat did present a higher instance of hematologic toxicities and liver function abnormalities. Despite these potential side effects, they did not result in a significantly increased rate of severe clinical consequences.
Geron is gearing up to submit an NDA to the FDA in 2023, and if approved, a potential commercial launch of imetelstat in both the U.S. and Europe is projected for 2024. This could establish imetelstat as a novel treatment paradigm for lower-risk MDS patients and potentially allow Geron to secure a niche in the MDS market.
Imetelstat, with a projected market capture estimate of 10-15% in the global MDS treatment market valued at $2.4 billion , has the potential to generate peak annual revenues between $240 million and $360 million. However, considering the competitive market for treatment-resistant lower-risk MDS, the upper-bound estimate of $360 million appears to represent a best-case scenario for Geron.
By the end of 2022, Geron maintained a robust financial position, with $173.1 million in cash and marketable securities. This was further bolstered by $213.3 million from a public offering and $59.8 million from the cash exercise of outstanding warrants in early 2023. This suggests that Geron is well-positioned to navigate the path to commercialization.
Even with the promising results from the Phase 3 clinical trial and the potential revenue from imetelstat, my investment rating for Geron is currently a "Hold." The company's market capitalization stands at $1.23 billion, which seems reasonable considering imetelstat's potential. However, the prospective benefits of the drug must be weighed against the potential risks, including its safety profile and the competitive landscape. Therefore, a cautious approach is recommended for potential investors.
Risks to Thesis
When the facts change, I change my mind.
Here are a few of the most-relevant risks to consider regarding my "Hold" recommendation:
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Regulatory Risks: While Geron has had promising results with imetelstat, the drug still needs to gain regulatory approval from authorities such as the FDA and the EMA. The approval process is rigorous and uncertain; any unexpected issues or setbacks could significantly impact the drug's prospects.
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Clinical Risks: Although imetelstat showed promising results in the IMerge Phase 3 trial, it did present higher instances of hematologic toxicities and liver function abnormalities. These safety concerns could affect its prospects for regulatory approval and market acceptance.
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Market Acceptance: Even if imetelstat gains regulatory approval, its commercial success is not guaranteed. The drug will need to gain acceptance from physicians, patients, and payers. This will largely depend on imetelstat's demonstrated benefits outweighing its risks, especially given the availability of other treatment options.
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Financial Risks: Geron's financial position will depend on the successful commercialization of imetelstat, given its increasing net loss and operating expenses. Any setbacks in the drug's development or commercialization could significantly impact Geron's financial status.
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Competition: The market for MDS treatments is competitive, with several established players and new entrants. Geron will need to compete effectively in terms of efficacy, safety, cost, and other factors to capture and maintain market share.
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Dependence on a Single Drug Candidate: Geron's prospects largely depend on the success of imetelstat. If the drug fails or underperforms, Geron doesn't currently have other drug candidates that could offset the loss.
For further details see:
Geron's Imetelstat Could Find Its Place In MDS Treatment, Yet Prudence Is Advised