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), 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) 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) 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.
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.