Investors who have followed Geron Corp. (NASDAQ: GERN) for any length of time know that the biotechnology company has experienced plenty of highs and lows for the more than two decades they have been in business. It’s hard to believe that a company that once traded as high as 70.00 and routinely saw shares moving in the 30.00 range could fall as low as 1.25 like they did in June 2012 but that’s the story of GERN. While it’s unlikely that the company will ever see those elevated highs again, they have been seeing a resurgence of sorts and on Thursday they hit a three-month high of 2.10 backed by heavy trading volume.
Again, the history of GERN is crazy as they remain in the developmental stage having never brought a product to market yet here they sit with six Phase II trials in the works, four involving their telomerase inhibitor Imetelstat that targets four different cancers, with both solid tumors and hematologic malignancies under investigation along with two trials studying GRN1005 which is being tested for brain tumors that develop from breast and lung cancer.
It goes without saying GERN, which reported to have $122.3 million in cash and investments at the end of the second quarter 2012, can’t carry all six of these trials into Phase III studies without a partner. That being said, GERN is no lock for a partnership agreement as there are still a number of questions that need to be answered from their existing studies before any company would be willing to step forward and share the financial burden of a Phase III trial.
This places even more pressure on GERN to target the right trial and with all four of GERN’s studies involving Imetelstat expected to deliver results over the next 12 months their future could get a little clearer. Over this period investors should learn whether GERN opts to go after solid tumors that focus on breast cancer and NSCLC (non-small cell lung cancer), or hematologic malignancies that focus on multiple myeloma and essential thrombocythemia.
Without question Imetelstat offers promise in its application to treating cancer as there has been plenty of data showing positive results in its novel approach to inhibiting the telomerase enzyme, an enzyme that essentially strengths tumors and keeps them resistant from most treatments. GERN is now trying to show that Imetelstat is capable of stopping and/or inhibiting the growth of tumors and if successful they could easily become the talk of the oncology field.
As for GRN1005, the LRP-directed peptide drug conjugate targets brain tumors that develop from breast and lung cancer. Brain cancers are among the most difficult to treat given body’s natural defense mechanism that blocks most compounds from interacting with the brain. What GRN1005 does to bypass this defense and deliver the cancer drug to the brain is use the LRP-1 transport mechanism, a protein found in the plasma of cells that are involved in receptor-mediated endocytosis.
Given the long history of companies who have failed to produce a viable approach to treating brain cancers GRN1005 could actually be the homerun for GERN. While GERN is in a pair of Phase II trials with GRN1005 there are plenty of potential roadblocks that could keep this from Phase III advancements.
At present GERN is an anomaly, they defy normality in almost every way and it’s a mystery how they have survived this long as a company given their financial situation. They spent hundreds of millions on stem cell research only to abandon the market last year and while they have stated their plan is to recoup some of those losses by divesting their stem-cell assets they haven’t delivered any news on this front for some time.
While many investors may see GERN as a risk worth taking the fact that they’ve been around for so long without delivering anything to market is a serious concern. If they can’t produce positive results from any of the four Phase II trials involving Imetelstat then investors would be wise to keep their distance.
