is testing some investors' patience.
The California-based biotechnology company failed to deliver blockbuster news on its novel GRN163L cancer treatment during this week's Pan Pacific Lymphoma Conference in Hawaii. Instead, the company simply reported that GRN163L has "demonstrated good pharmacokinetics and tolerability" in patients tested during phase I/II studies so far.
GRN163L seeks to targets an enzyme, known as telomerase, that enables cancer cells to multiply and survive. At the modest doses tested thus far, however, GRN163L has failed to significantly alter telomerase activity or shorten the chromosome ends -- called telomeres -- that are involved in the cancer-development process.
Some investors seemed to be banking on an outright miracle instead. After pushing Geron toward $10 a share last month in anticipation of big news, they pounded the stock down 8.3% to $8.01 on Tuesday's modest development.
"Candidly, people don't know what to expect with Geron; that's the problem," says WBB Securities analyst Stephen Brozak. "Certainly, day traders want instant news that they can easily interpret. But this is not that simple.
"These are unique strategies that are difficult to understand and deal with."
Brozak, for one, feels that Geron continues to make steady and important progress. He has personally researched Geron for more than a decade and now sees a viable company -- with real commercial potential -- in the making. But he admits that newcomers could fail to recognize the same.
Brozak blames a potential overload of complex information for the confusion.
"It isn't like there's a shortage of news; it's like there is too much news for most investors to understand," he says. "But in fairness to the company, it's not like they're piling on with a lot of extraneous stuff. Everything they talk about has significance."
Brozak likes what he hears. He has a strong buy recommendation on Geron's stock. His firm has no position in Geron itself and has provided no investment banking services to the company over the past two years.
Meanwhile, Geron did witness some positive developments during its recent GRN163L study. For starters, the company said that one GRN163L recipient is experiencing "stable disease" patterns following two rounds of cancer treatment. Moreover, the company said that a second patient has experienced a rapid destruction in malignant cells -- with the "absolute lymphocyte count" dropping by 48% -- during a posttreatment period that has persisted for two weeks.
Geron stopped short of crediting GRN163L for progress in that patient, however, due to "the lack of measured telomerase inhibition" observed. Indeed, Geron indicated that patients should probably be exposed to GRN163L for longer periods of time in order for the treatment's telomerase-inhibiting powers to take effect.
Brozak, at least, feels more than willing to wait.
"They're starting to get some preliminary indication of how things are going," he explains. "This is one of the necessary steps in the progress that Geron is making in going from a research enterprise to a full-blown commercial operation."