This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Geron's Game-Changing Myelofibrosis Drug Story Has a Familiar Feel

A small company with a checkered past presents early data on an experimental drug for myelofibrosis which appears to have never-before-seen benefits for patients. The surprisingly positive data come from a small study conducted by an outspoken and controversial myelofibrosis expert at the Mayo Clinic. A bull-bear debate ensues on Wall Street, with some investors believing the small company's drug candidate has the potential to be a game-changing, blockbuster in myelofibrois, while others remain skeptical.

The company I'm referring to is YM BioSciences, of course. In 2011, the company's experimental drug CYT387 caused quite a stir with data showing it could reverse anemia in myelofibrosis patients -- something the already approved competitor, Jakafi from Incyte (INCY - Get Report), could not do.

Investors debated the pros and cons of CYT387 for months with no resolution. YM BioSciences stock price remained stagnant. Finally, in December 2012, Gilead Sciences (GILD - Get Report) acquired YM Bio for $510 million in cash, or an 81% premium on a per-share basis.

This situation is playing out almost exactly the same way today with Geron (GERN - Get Report) and its experimental myelofibrosis drug imetelstat. The similarities to YM Bio and CYT387 are uncanny.

What's not known yet is how the Geron story plays out in the end, but you certainly can't dismiss the possibility the company and its very interesting myelofibrosis drug are acquired just like YM Bio was one year ago.

Must Read: The Numbers Backing Gilead's Best and Fastest Drug Launch in History

The buzz around imetelstat centers on early phase I study data showing the drug reverses bone marrow fibrosis in myelofibrosis patients. Myelofibrosisis is a cancer-like disease in which abnormal bone marrow stem cells produce scar tissue. This scar tissue, or fibrosis, crowds out and replaces healthy marrow.

No myelofibrosis drug has ever before demonstrated an ability to clear bone marrow fibrosis i.e. reverse the underlying cause of myelofibrosis.

Imetelstat might be the first.

On Monday night, Geron and Dr. Ayalew Tefferi of the Mayo Clinic presented data at the American Society of Hematology annual meeting showing 5 of 22 patients had a complete or partial remission following imetelstat treatment.

This means the patients had a response in their bone marrow and resolution of clinical symptoms like reductions in the size of their spleens. [Jakafi was approved based on significant spleen-size reduction.]

The five complete and partial remissions were disclosed in November but what was new Monday were more details and confirmation of the patients' overall response, including most importantly, the clinical (symptomatic) benefits.

[You can download Geron's slide deck on the imetelstat data from last night's investor event.]

If imetelstat has the ability to slow or stop the underlying cause of myelofibrosis -- something Jakafi or Gilead's CYT387 (now known as momelotinib) cannot do -- why isn't Geron's stock price soaring Tuesday? As I write this story, Geron shares are down 4% to $5.30.

Investors are cautious on Geron, just like they were with YM Bio. Here's why:

1. The imetelstat data generated by the Mayo Clinic's Tefferi come from a small study with relatively short follow up. Investors want to see these complete and partial remissions replicated in a larger, longer and more independent study.

2. Geron plans to conduct a larger study of imetelstat in myelofibrosis but needs to raise money to do so. An equity offering is anticipated.

3. Imtelestat's benefit does not come risk free. The drug causes relatively high rates of thrombocytopenia, or low platelet counts, and neutropenia, or low white blood cell counts. One patient in the Mayo Clinic study died from complications related to imetelstat.

4. Geron has a checkered past. The company has never developed a drug successfully. In fact, Geron has one of the longest streaks of drug-development futility in the biotech sector. While the imetelstat data in myelofibrosis are certainly interesting, the drug has already flopped in some solid tumor studies.

4. The mechanism of action of imtelestat -- telomerase inhibition -- is unproven and controversial. 

So, Geron today stands where YM Bio stood three years ago. There's no denying that imetelstat is an interesting and potentially game-changing myelofibrosis drug, but the verdict won't be decided without more clinical data.

The YM Bio story ended well for shareholders but it took a walk in the biotech wilderness to get there.

Geron's walk just started.

-- Reported by Adam Feuerstein in Boston.

Follow Adam Feuerstein on Twitter.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GILD $85.14 0.00%
GERN $2.86 0.00%
INCY $71.00 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs