Two takeaways from the recent news

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phil
Posts: 16
Joined: Wed Dec 09, 2015 2:53 pm

Two takeaways from the recent news

Post by phil » Wed Apr 25, 2018 12:27 pm

First, It seems JNJ has finally updated their clinical trial site. It was said this was done to coincide with JNJ's call or Geron's shareholder meeting, and that possibly may be true, but more likely it seems, as Geron said it would happen in the 2nd quarter, the trial has finally hit the pre-specified number of deaths - whatever that number is. It seems very positive that the OS details are moved up in significance to "key secondary endpoint" and that the trial moved from suspended to "active". I'm just not sure JNJ will be able to fully evaluate the data of the trial in time for Geron's shareholder meeting, and certainly not in time for their own call.

Second, the drop in shorts concerns me. My background is running a trading desk and managing money. Seeing the run-up in shorts to 44 million, then back down 9 million tells me two things. First, word got out that Geron was going to execute their shelf offering (hence the pop in shorts anticipating shares to hit market), then second, they did indeed sell shares in the market (bought back by shorts), probably their $50MM shelf, and the short number dropped back in alignment near the 34MM mark. I'm not sure it's true, but an educated guess. If it is true, that was a crappy execution and Geron should find a different investment banker that doesn't let the word out to shorts in advance. If the shelf was indeed done, it's a positive that the overhang is behind us. It is also possible 10MM shorts added to their positions on the pop from $3.50 to $6.50 and covered perfectly on the drop. Though, 10MM times $4 comes pretty close to the shelf amount. Time (shareholder meeting?) will tell if I'm right, maybe I'm not.

I have told people it looked 65-80% in my eyes that JNJ would continue and affirm their partnership, but if I am right, why would Geron execute their shelf? Probably because the share price popped recently and it looked like a decent time to raise capital ($50MM), however, if they felt JNJ was continuing, why in the world would they execute their shelf at lower levels (assuming a soon-to-be JNJ agreement boosts the stock)??? That makes no sense to me and tells me Geron isn't sure that JNJ is indeed a done deal. If JNJ doesn't continue, Geron would need the money to cover the MDS P3 trial. The confirmation bias side in me says they raised the money because they do in fact think JNJ continues with their deal and Geron wants to also opt in on their side and will need some additional capital on top of another $65MM for multiple clinical trials (which they share costs) and a sales team. Wishful thinking...

I still believe JNJ does want the drug and the deal, but interesting times...
P
Last edited by phil on Wed Apr 25, 2018 10:26 pm, edited 1 time in total.

biopearl
Posts: 367
Joined: Wed Dec 09, 2015 12:12 am

Re: Two takeaways from the recent news

Post by biopearl » Wed Apr 25, 2018 3:36 pm

Phil, it would be nuts as far as I am concerned, to raise money before release of important information which all indicators suggest will have a positive impact on the stock price and strongly so. If Scarlett wanted to raise cash he would wait until the market absorbed the impact of the impending news. You have market experience so I appreciate your take here but to me it just doesn't make sense. Regards, bp

biopearl
Posts: 367
Joined: Wed Dec 09, 2015 12:12 am

Re: Two takeaways from the recent news

Post by biopearl » Wed Apr 25, 2018 4:46 pm

Phil, a few further observations. 1. When you say J and J may not "opt in", I think you are referring to the continuation agreement which J and J can elect to continue their relationship with Geron or not. The actual "opt in" or "opt out" agreement actually pertains to Geron and is Geron's choice to make after the continuation agreement is decided upon. 2. I agree that the coincidental dates of the study conclusion and and J and J meeting will not allow for data to be released, however J and J may use this meeting to further confirm ongoing an cooperative relationship with Geron. We might get some idea of future studies, especially re AML from the abstract release for ASCO later today but clearly the major data release will be at ASH. 3. I confess to knowing nothing about how "short" sellers manipulate the market but clearly they may have done so with carefully timed short sales, the more light you can shed on this for us the better to recognize the true long term picture. 4. Changes in the clinical trials site are important as you and others suggest (I just happened to be on the site coincidentally yesterday when the changes were posted so was able to get the news out fast). These chances include an important emphasis on survival as a key secondary end point as well as the anticipated extension of the study for patients who continue to receive benefit. What we continue to not know are the effects on CR/PR/CI anemia, progression to AML and the host of as yet unanswered questions we all have. This data will likely wait until ASH but I have little doubt will be addressed then. Also the sub rosa ongoing MDS trial will likely give us more info by then too. The likely hood from all appearances of J and J choosing to not exercise the continuation agreement seems low especially since Imetelstat continues to appear on every list of J and J anticipated filings for NMEs between 2018 and 2021. I think this is important since I think the most likely filing this year would be for Imetelstat, especially with the conclusion of the high risk study. Because of J and J's continued confidence in Imetelstat and confirmation as recently as a few weeks ago as a NME of high interest I must continue to challenge your idea that Geron chose now to raise cash. We will know soon. Thank you for posting. bp

biopearl
Posts: 367
Joined: Wed Dec 09, 2015 12:12 am

Re: Phil

Post by biopearl » Fri May 11, 2018 12:09 am

Phil, hats off and kudos for a very accurate call. My response to you was perhaps naive and loaded with confirmation bias. For Scarlett to do this in such proximity to the annual meeting suggests he might actually have something up his sleeve. If he doesn't, I'd like to know before the meeting so I can change my vote. He has some splaining to do that's for sure. bp

scottmayhew
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Joined: Wed Dec 09, 2015 10:26 pm

Re: Two takeaways from the recent news

Post by scottmayhew » Fri May 11, 2018 1:26 am

does a shelf registration need to be dealt with prior to a sale to another company?

scottmayhew
Posts: 47
Joined: Wed Dec 09, 2015 10:26 pm

Re: Two takeaways from the recent news

Post by scottmayhew » Fri May 11, 2018 2:12 am

everyone should read _sdrawkcabeman_ (https://twitter.com/_sdrawkcabeman_) on Twitter...a heartening response.

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