ImetelChat

It’s interesting to compare GERN (Imetelstat) to Incyte (Jakafi). I realize this comparison is way premature, problematic and inexact. Nonetheless this comparison may give us some idea of what the potential market is for Imetelstat. That is the only reason I make this comparison; to obtain some idea of what GERN may be worth assuming Imetelstat performs well and is approved. Let me put what I’m trying to say another way: if Imetelstat is approved it seems to me one of the biggest mistakes a present GERN investor (may) make is to sell the stock too soon. Make sense? Or am I totally off track? If anyone has further thoughts about this I’d love to hear them. All I'm trying to do is to obtain some idea of what GERN may potentially be worth. Here are two recent articles concerning the present market for Jakafi and the revenues it’s generating:

http://marketrealist.com/2016/04/incyte ... are-peers/
http://www.fool.com/investing/general/2 ... ce=yahoo-2

On Seeking Alpha Hoosier has once published a very nice article on the valuation of Geron titled 'What to expect from imetelstat now' (12 Jan 2016). He processed quite some variables and assumptions and created a basis for something that makes sense. Some quotes from that article:

Summary
- Second-line myelofibrosis represents a $1.1B net sales opportunity.
- Low & Int-1 risk MDS represents a $3.7B net sales opportunity.
- AML, multiple myeloma, and solid tumors are future opportunities.
- A forthcoming patent will extend patent protection through 2032.

../..

Conclusions
Geron's current share price is undervalued based on Imetelstat's probability of gaining regulatory approvals, patent protection, and the financial projections associated with future hematologic and lymphoid treatment opportunities

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In order to come to his conclusions Hoosier analyzed the markets for MF, MDS,AML, MM and solid tumors, and atributed estimations for market share and imetelstat pricing. He also briefly addressed Geron's patent situation, about which he stated the following:

"Geron had the foresight to file a patent application (US20140163090) in Dec '12 just prior to the start of Dr. Tefferi's myelofibrosis pilot study. Following a detailed examination, the USPTO issued a formal Notice of Allowance on 10/2/2015 for the claims specific to MF, MDS, and CMML. The patent was nearing issuance with an expiration date of December 7, 2032, but Geron recently (12/28/2015) filed a request for continued examination (RCE). A post-allowance RCE is typically made in hopes of being awarded a patent term adjustment (extension) based on a lengthy (>3 years) USPTO examination period. The issuance date and final expiration date of the patent are now uncertain, but, at a minimum, it appears Geron will secure patent protection involving the use of a telomerase inhibitor to treat MF, MDS, and CMML through December 7, 2032. The extension of Imetelstat's patent protection by 7+ years (2025 to 2032) will serve to protect Imetelstat from competition in the primary MF and MDS indications, and, following regulatory approval, the new patent will extend the stream of net sales royalty income due from Janssen and significantly increase Geron's discounted cash flow (DCF) and/or aquisition valuation."

Link to the full article: http://seekingalpha.com/article/3804846 ... elstat-now

btw sargasso: I agree that making a direct comparison between Geron and Incyte is problematic and inexact. So better not try. However, we can learn about the market for MF by looking at the revenues that Incyte created in that market. Hoosier used that information to base his estimations on, as I mentiond in my earlier reply regarding the article he published on SA on 12 January 2016.

Fisher,

Thanks. That's the kind of rough estimates I was looking for. From the first article I previously linked:

"Jakafi revenues increased to $601 million in 2015 as compared to $355 million in 2014 due to the increase in volume as well as the price of Jakafi in the US. Jakafi revenues are further estimated to increase to $818 million in 2016 and cross $1 billion in revenues for 2017 in US markets."

The business of treating people with rare diseases has turned into a big business.

Nice, those Jakafi figures. But how do they relate to Geron? For sure Geron will take over Jakafi revenues, but how much and when? What is your opinion about that?

Sargasso, I think your question is very interesting, but difficult to answer. The two companies are very different, although they seem to serve the same market. Incyte is diversifying on the JAK-inhibitors into Rheumatoid Arthritis (Baricitinib, Phase3 CT), which is a large market and not targeted by Geron. That means from a valuation point of view that the two companies have different outlooks and development paths.

In order to have any discussion on valuation, it always starts with revenues and sales. Currently Geron only has revenues from milestone payments, no real imet sales yet. So it would be interesting to learn from the Jakafi sales prognosis for 2016/2017 in the MF market, and atribute that to Geron's potential of becoming a competitor in that market. But even that would not be so simple, because the response profiles of the two drugs are different. People may respond to Jakafi, but not to imetelstat vice versa. The median durability of Jakafi responses is 3 years. We don't know that yet for imetelstat, although so far the experts call for imetelstat having durable responses (for as long you take the drug). Again I would like to refer to Hoosier's article. Maybe we could see if that article is still accurate regarding the MF market. One thing seems to be sure: once imet is approved, it will take over a portion of the Jakafi sales.