Geron (GERN) Stock: Expect Topline MDS Data In Early January

Since my May article on Geron (NASDAQ:GERN) when we saw that topline results from the IMerge phase 3 trial of imetelstat in low risk myelodysplastic syndrome patients was to be read out in January 2023, GERN stock has been on a roll, and is currently up 60%. The company also has the single agent myelofibrosis phase 3 trial running, but that is a couple of years away from interim data. If a certain number of OS events have occurred at interim, that may be enough data for an application.

Before I proceed any further, let me note here the results of an investor lawsuit filed against Geron. The lawsuit alleged that Geron falsified IMbark trial data for its myelofibrosis trial, after a 2018 report by Adam Feuerstein which asked Geron to “disclose the baseline disease characteristics of the 100 myelofibrosis patients enrolled in their Phase 2 study” and “to explain why they’ve delayed by almost one year the disclosure of primary endpoint results from the Phase 2 study that would show, definitively, if myelofibrosis patients respond to treatment with imetelstat.” Although Geron did not accept any wrongdoing, it settled the lawsuit for $24mn.

To provide some brief background on Geron: Geron has a molecule called imetelstat, which is a telomerase inhibitor. A telomere is like a cap that sits at the end of a chromosome, protecting it from damage as well as fusion. Telomerase is an enzyme that repairs telomeres as it shortens during division. When a telomere is able to maintain its length through the activity of telomerase, the cell becomes biologically immortal; i.e., it can divide indefinitely. This is called crossing the so-called Hayflick limit, which says how many times a cell can divide. Cancer cells are biologically immortal because of their telomerase activation.

The science behind telomeres was discovered by 3 scientists, Jack Szostak at Harvard, Carol Greider at Johns Hopkins and Elizabeth Blackburn, UC Berkeley, for which they won the 2009 Nobel Prize in Medicine or Physiology. These scientists were early collaborators at Geron, but parted ways. An old article on Baltimore Sun caught my attention, where it says:

At telomere meetings, it’s “common for people to sit around and tell Geron horror stories,” says Elizabeth Blackburn, professor of biochemistry and biophysics at the University of California, San Francisco School of Medicine.

You should read it for some background.

Geron has been working on imetelstat through clinical trials for years, and as a longtime but somewhat aloof follower of the Geron story, I know investors have been waiting for years to see imetelstat come to the market.

There has been no news causing the recent spike, except the spike itself. Nothing much of import has happened except a change of guard with a new CMO at Geron. In other news, Geron announced, in August, that the first patient has been dosed in the IMproveMF Phase 1 trial in frontline myelofibrosis.

In the third quarter earnings release, however, Geron had some announcements to make. This was the confirmation that topline results from IMerge Phase 3 in lower risk myelodysplastic syndromes (‘MDS’) were still expected in early January. The company said this would be followed by an NDA in the US in the first half of 2023, an MAA in Europe in the second half, and approval and commercial launch in the US in early 2024.

So IMerge is the big thing, and it is a phase 3 trial, so we want to look at the phase 2 trial of the same molecule in the same indication. This is the methodology I standardly use. So this year, the company announced it was planning to present additional data from the phase 2 trial. Here’s what it said, the key points:

• Updated imetelstat data from IMerge Phase 2 describe significant continuous durable transfusion independence, meaningful reduction in mutational burden and progression-free survival, which indicate disease-modifying activity

• Ongoing Phase 3 IMerge clinical trial of imetelstat designed to confirm Phase 2 data; topline results expected in early January 2023

• Additional ASH abstracts support the broad potential of imetelstat in hematologic malignancies

The data showed greater than one-year continuous transfusion independence in approximately one-third of the 38 lower risk MDS patients in the study. This data is competitive, but not exactly superior to Luspatercept data, which saw “nearly 50% of transfusion independence in LR MDS.” However, that would not be a proper analysis of the importance of imet, because, among other things, it is also being tested in Luspatercept refractory patients. Lenalidomide is the approved treatment for patients with lower-risk MDS with del(5q) and transfusion-dependent anemia. In the first line setting for non-del(5q) patients, Erythropoiesis-stimulating agents (ESAs) are the treatments of choice. However, many patients are refractory to ESAs, or relapse in their anemia progression. As I noted earlier, Geron presented data at ASCO 2 years ago that showed the following:

Imetelstat produced meaningful and durable transfusion independence (TI) in heavily transfusion-dependent patients with erythropoiesis stimulating agent-relapsed/refractory non-del(5q) LR MDS. Eight- and 24-week TI and hematologic improvement-erythroid were achieved in different subsets of LR MDS, irrespective of the presence of ring sideroblasts.

Ring sideroblast is another aspect of MDS. In myeloproliferative disorder (MPD), ring sideroblasts are absent. In MDS, when they are present, it is easy to distinguish between the two diseases. But in a certain subtype, ring sideroblasts are absent; here, diagnosis becomes challenging. One good thing about imetelstat is that even in this challenging setting, the molecule showed drug activity. This adds 33,000 patients, or roughly $1.2bn to imet’s total addressable market.

The following sums up imetelstat’s situation in LR-MDS nicely:

Imetelstat, a telomerase inhibitor that is administered intravenously every 4 weeks, induced TI in 42% of treated LR MDS that were refractory/resistant to ESAs and were not pre-treated with lenalidomide or hypomethylating agents [35]. This activity of imetelstat is accompanied by an on-target effect, which is a >50% reduction in hTERT expression [36] and by the decrease of mutational burden in patients responding to treatment (i.e., SF3B1 mutants). Response duration may be >1 year, as shown in around 30% of cases, and as long as 2.8 years [35]. A phase III randomized clinical study comparing imetelstat to placebo has just been completed, and the results are awaited.

Financials

GERN has a market cap of $864mn and a cash and marketable securities balance of $195mn. The company expects to have another $121mn from the potential exercise of the currently outstanding warrants and up to $50 million from the current debt facility with Hercules Capital.

Research and development expenses for the three months ended September 30, 2022, were $24.6mn, and SG&A were $15.6mn. The company had negligible revenues but around $2mn of interest income. At this rate, it has cash for around 7-8 quarters, or through 2024. If all goes to plan, not only will imet be approved in LR-MDS by that time, but IMpactMF Phase 3 trial in refractory MF will also produce interim data.

Bottomline

Geron’s science has always been great in theory, but the way I see it, its obsession with keeping such cutting edge technology absolutely under its control has led to lack of broad research. So when an issue crops up, obfuscation as alleged by STAT’s Adam Feuerstein may be the result. As such, the upcoming LR-MDS trial data may well be excellent, but there’s a confidence gap with the company that makes it very difficult to invest in it.

On the other hand, the stock is really striving to break through as confirmatory data is approaching, so a prudent step would be to take an active interest in the company stock, hold it for a month or two, and see if it works out. Like all things emerging biotech, be aware of the risks.