ImetelChat

GERN stated in its recent announcement:

“Janssen has conducted an initial internal review of efficacy, safety and pharmacokinetic data from a subset of patients from Part 1 of IMergeTM and this review indicated that emerging safety and efficacy in IMergeTM is consistent with data reported from the pilot study conducted at Mayo Clinic in MDS patients. IMergeTM will continue unmodified at this time.”

I find that quite encouraging -- and yet judging by the price action this week the market appears to be assigning zero value to this positive news. My question is: why? The market for effective MDS therapies is fairly large, and growing, and has a high unmet need.

The below report is a bit dated; nonetheless it contains projections for the MDS out to 2017.

The report observes: “GlobalData estimates that the global myelodysplastic syndrome (MDS) market was valued at $652.6m in 2010 and forecasts it to grow at a Compound Annual Growth Rate (CAGR) of 12.2% to reach $1.5 billion by 2017. This growth forecast is primarily attributed to the currently approved drugs reaching their peak sales during the forecast period and secondarily due to a strong pipeline. The existing market is strong although with high unmet need.”

http://www.businesswire.com/news/home/2 ... Assessment

The below report is more recent and is dated January 2016. It essentially contains the same conclusions as the above-referenced report with regard to the MDS market:

http://www.technavio.com/report/myelody ... ome-market

Thoughts?

This is what I don’t understand:

Sep 2, 2016

Incyte’s 2Q16 revenues

“As we’ve already seen, Incyte (INCY) reported revenues of $246.3 million in its 2Q16 results. This converts to a 51% revenue growth in 2Q16 compared to $163 million in 2Q15.
There’s increasing demand for Incyte’s Jakafi, the only FDA-approved drug for the treatment of myelofibrosis and polycythemia vera, rare types of blood cancer, in the United States. Analysts estimate that revenues for Jakafi will increase to $834 million for 2016 and that overall revenues for Incyte will increase more than 38% to $1.1 billion in 2016.”

http://marketrealist.com/2016/09/unders ... ream-2q16/

The IMerge trial is going well. The safety and efficacy of this trial according to GERN is consistent with the data reported from the Mayo Clinic pilot study. It seems to me; therefore, Imetelstat has an excellent chance of capturing a significant portion of the above revenue streams of Jakafi -- and especially since Imetelstat treats the underlying causes of the disease and Jakafi does not.

Expressed differently: GERN can become a successful company and Imetelstat a successful drug even if it does not produce a miracle cure for the sickest of the sick in the IMbark trial. That is my basic assumption as an investor. Is this assumption wrong?

I realize all of the above is pretty basic and contains no new information. But when I don’t understand something – like the market action in GERN this week – I find simplicity useful.

So what am I missing? What don’t I get?

Hi Sargasso, these are impressive figuers, including the MDS market growth rate of 10-12%. For some reason there always has been a kind of focus on MF, maybe because cleaning the bone marrow is very scpetacular. But in fact we don't discuss MDS a lot. That IMerge is still meeting expectations is very encouraging indeed. Imetelstat could be successfull on MDS alone. So the latest enormous sell off to my opinion is not related to the potential of imetelstat. I don't believe Jakafi is currently commercially active in the MDS market.

Hoosier made an assessment on the value of the MDS market for Geron in his article "What to expect from imetelstat now" (12 January 2016). Her the part about MDS:

Myelodysplastic Syndrome
- Low & Int-1 risk MDS represents a $3.7B net sales opportunity.

- As illustrated in the table below, an Imetelstat approval for Low and Intermediate-1 risk MDS patients represents a $3.7B net sales opportunity for Janssen. At this level of net sales, Geron would yield $632M per year of free cash flow that would be available for corporate investment and/or return to shareholders. Based on 158M outstanding common shares, Geron would realize ~$4.00 per share of earnings (before income taxes).

Key inputs into the financial analysis include:
· There are 60,000 and 116,000 existing patients in the US and EU, respectively.
· Low and Int-1 risk categories represent ~70% of total MDS patients.
· US Imetelstat pricing of $130,000 per year is based on Janssen's pricing of Imbruvica. This is a reasonable pricing estimate as Celgene's lenalidomide (Revlimid) US price is currently $16,240 for a 28-day cycle which equates to ~$195,000/year.
· EU Imetelstat pricing of $68,500/year equals Celgene's capped EU price for Revlimid.
· Imetelstat's projected response rate of 38% is based on 3 of 8 transfusion dependent patients achieving transfusion independence (T-I) within Dr. Tefferi's pilot study.
· The use of the 11% sales discount rate is based on a recent Credit Suisse report, in which they determined Janssen's sales discounts for Imbruvica totaled 11%.
· An average royalty rate of 17.5% was utilized because the royalty rate will range from the mid-teens to the low-20s if Geron "opts in" per their agreement with Janssen.

The MDS financial projections may be conservative as they do not include potential sales into Russia, Asia, Brazil, or Mexico. These projections were omitted due to insufficient information regarding MDS patient populations and oncology drug prices.

MDS Comparison (Imetelstat vs. Lenalidomide)
Imetelstat demonstrated a 38% T-I rate in Dr. Tefferi's pilot study while Celgene's lenalidomide (Revlimid) realized a 27% T-I rate in a Phase 3 trial (NCT01029262) of 160 MDS patients. While the response rates were similar, the mix of patients in the respective trials (low-risk vs. high-risk) was quite different as illustrated in the table below.

Janssen's Phase 2/3 trial (NCT02598661) will exclude high-risk MDS patients in the same manner as lenalidomide's Phase 3 trial. Thus, Janssen may realize an improved response rate in the current trial due to the inclusion of low-risk patients and the exclusion of high-risk patients.

With regard to toxicity, the two studies yielded very similar rates of Grade 3-4 adverse events. In the lenalidomide trial, Grade 3-4 neutropenia and Grade 3-4 thrombocytopenia occurred in 61.9% and 35.6% of the patients, respectively. In the Imetelstat trial, Grade 3-4 neutropenia and thrombocytopenia were seen in 66% and 33% of patients, respectively with none of Imetelstat Grade 3-4 toxicities lasting beyond 4 weeks. One (1) patient with pre-existing cardiovascular disease history died while participating in the Imetelstat trial while three (3) patients died while participating in the lenalidomide trial.

Imetelstat has a good opportunity to gain regulatory approval for MDS based on the preliminary comparison to lenalidomide which has been approved for 5q delete MDS patients and will most likely gain approval in 2016 for Low and Intermediate-1 MDS patients based on their 27% T-I response rate. The speed in which Janssen is moving forward and the FDA's allowance of the Phase 2/3 trial design imply the experts and authorities are likely of the same opinion.

link to the article: http://seekingalpha.com/article/3804846 ... elstat-now
(I can't get the table inserted, so for that you need to go to the original article. I would be very much interested if Hoosier could comment on this threat.)

Thanks Fisher! The information provided in your reply is very helpful.

So GERN has two shots on goal: one directed at high risk MF and the other MDS. It appears to me if Imet receives approval (and I still have no good reason to believe it will not) it may first be for MDS. But of course that is only a guess based on inadequate, but so far encouraging, information.

On a personal note this is also my first substantial small-cap biotech investment. It has been noted that investing in such stocks requires nerves of steel to which I reply: no kidding!

I would also greatly appreciate an update from Hoosier especially with regard to the MDS market.

Sargasso, I believe your inquires require an Occam's razor approach:

1. You are wrong.

2. Janssen is wrong.

3. The market is wrong.


Pick one.

bp

BP,

In fact, we’re all wrong. Imet is actually an extremely effective cure for Alzheimer’s disease but the market has yet to realize it since GERN is keeping it a secret.

Not sure if being right or wrong is a useful question. There is a very complex game going on. We know who was right or wrong afterwards. I also have always have wondered why IMerge doesn't seem to add value. But it is as it is. The market is always right, also if it is wrong. But as long as the trials are running as expected and 'encouraging trends' are officially reported, all the chances are still open.

Sargasso, I presume you're being sarcastic. But having no sense of humor, I'm going to point out that Fossel's recent book suggests that Alzheimer's is caused by glial cell aging and must be treated with telomerase activators, not inhibitors.