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Geron Corporation: A High-Risk Deal With A Good
Chance Of Success
May 23, 2024 5:49 PM ET | Geron Corporation (GERN) Stock | GERNW
Michele Pagliaro
Geron Corporation's unique product, Imetelstat, could potentially bring real benefits to
hematological diseases with a Total Addressable Market value of $7 billion by 2031.
Clinical studies have shown statistical evidence supporting the effectiveness of Imetelstat in
inhibiting telomerase and treating diseases.
The FDA Oncologic Drugs Advisory Committee voted in favor of Imetelstat (12 to 2) for
patients with MDS.
Despite the high risk associated with a single-product business, there is a good chance of
positive evolution and the potential for a significant return on investment.
Technological Background and Business Overview
koto_feja/E+ via Getty Images
Geron Corporation (NASDAQ:GERN) could reach a turning point on June 16, 2024, after 34
years of its foundation. This date could represent the new company's commercial transformation.
It could bring its unique product Imetelstat to new life on the real market and this drug could be
able to bring real benefits to serious and highly disabling hematological diseases (MDS and MF).
If we analyze the results of the IMerge Phase 3 clinical study we can see how there is statistical
evidence to support the possibility that Imetelstat acts effectively on telomerase and can lead to a
positive treatment of the disease.
Market analyses also lead us to think that there is a large segment of the population that can
benefit from Imetelstat which, according to Geron, could reach $7B in 2031. Assuming that Geron
can realistically conquer 20% of this market share, my estimates indicate a possible 3-digit return
on investment in the coming years.
The investment is highly risky because it involves betting on the success of a single-product
business. In other words, there is only one parachute for a single launch. Given this high risk, in
my opinion, there is a good chance that the business can evolve in positive terms and therefore
my rate is Buy.
Geron Corporation is a late-stage biopharmaceutical company developing therapies focused on
the treatment of hematological diseases.
Buy Investment Thesis
Geron's studies are based on important Nobel Prize-winning scientific discoveries in the field of
Telomeres and aging (Blackburn, Szostak, Greider - Nobel prize 2009): awarded for their
discoveries on telomerase, an enzyme that maintains telomeres, the ends of chromosomes that
shorten with each cell division.
Trying to summarize the technological background that underlies the business, we could say that
the human body grows and develops through the cell's division. But cells can divide only a limited
number of times, and this is caused by the length of the telomeres.
Every time a cell divides, telomeres shorten. When telomeres become too short, the cell dies.
Nobel Prize winners discovered the importance of telomerase (a natural enzyme) which can
inhibit the shortening of telomeres when the cell divides.
In tumor cells, telomerase allows the uncontrolled proliferation of diseased cells, which allows the
tumor to develop. The inhibition of telomerase therefore represents an element of particular
interest for the entire scientific community because of its ability to limit the proliferation of
malignant cells.
Imetelstat, the product studied and created by Geron, is the first telomerase inhibitor to advance
in clinical development and potentially enter commercialization in the coming months.
Imetelstat has as its main indication the treatment of low-risk MDS (Myelodysplastic Syndrome).
In low-risk MDS, bone marrow cells (hematopoietic stem cells) are diseased and produce
immature cells that do not function properly.
In August 2023, the FDA accepted Geron's NDA (for the treatment of transfusion-dependent
anemia in adult patients with low-risk MDS) and set a Prescription Drug User Fee Act (PDUFA) for
June 16th, 2024. However, a meeting of the advisory committee was scheduled for March 24th,
2024, as part of the review of the NDA and the commission expressed itself positively with 12
votes in favor against 2.
Suppose Imetelstat is approved for marketing by the FDA. In that case, it is presumable that the
launch of the product could take place in the same period (Q3 - 24) in the USA, while as regards
the European market, Geron presented an MAA (Marketing Authorization Application) in
September 2023. It is expected that the European Commission may review the request in 2025,
with a possible launch in the EU in the same year.
IMerge Phase 3 clinical trial
My investment thesis is based on the consistency of the clinical studies carried out, on the
possible market demand, on the evaluation of a future share price, and on how the edge funds
specialized in biotechnology are moving. Let's see every single aspect in detail.
The applications (NDA and EMA) submitted to the competent authorities are based on the IMerge
Phase 3 clinical study.
Study data demonstrated a transfusion independence rate (60% transfusion reduction) for ≥ 8
weeks (primary endpoint) and a transfusion independence rate at 24 weeks (secondary endpoint).
Both results are considered statistically highly significant (p<0.001). The response rate (40% for ≥
8 weeks) was also highly significant compared to the placebo (15%). This is a very significant
difference that should have a positive impact on the evaluation by the FDA.
Another important aspect is the presence of a broad response on several key subtypes (positive
RS - negative RS - patients with high baseline transfusion load and patients classified as low risk
according to the IPSS) which represents another positive element in the treatment of high-risk
MDS wide range and not limited to just one subtype.
These data represent, at the moment, solid foundations that provide statistical evidence that
Imetelstat effectively acts on telomerase and inhibits the proliferation of malignant cells, allowing a
recovery of good cells in the blood, and this suggests a probable positive treatment of the
disease.
These studies and this evidence led the committee to vote favorably on the development of
Imetelstat on March 24th and should lead, in my opinion, to a possible positive evolution also on
June 16th.
In addition to the positive aspects, side effects should also be noted, which were
thrombocytopenia (low number of platelets in the blood) and neutropenia (number of neutrophils -
white blood cells in the blood). These effects appear to have been short-lived and easily
managed.
Potential market demand and income statement template
Geron Corporate Presentation - May 2024
In addition to IMerge, it should be noted that Geron is carrying out a Phase 3 clinical trial called
IMpactMF in patients with intermediate or high-risk MF with the primary endpoint being the overall
survival (OS) rate. It is expected that this study can define a provisional analysis of 2025 and a
final analysis in the first half of 2026.