Geron hangs on, just, after weak PhII blood cancer data

Small cap Geron was down by nearly 20% at the end of Monday after releasing new data with partner Janssen ($JNJ) that showed a low-dose arm of its experimental med imetelstat flopped, with the higher dose arm also coming up short.

The IMbark study was assessing patients with myelofibrosis (MF) taking a high- and low-dose form of its treatment who have relapsed after or are refractory to prior treatment with a marketed JAK inhibitor.

Its low-dose formulation (4.7 mg/kg) missed the mark, with Geron ($GERN) saying that arm now does “not warrant further investigation” and will be closed off.

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Patients using the low dose can be moved over to the higher dose (9.4 mg/kg) should they want to, although data released for this arm was also poor, as “an insufficient number of patients met the protocol defined interim criteria,” according to the biotech’s statement.

However, it plans to push on with this part of the trial as it saw “encouraging trends in the efficacy data.”

Janssen, which did not post a direct comment in the release and left the publication of the bad news to its partner, posted these data from an interim review at the early 12-week point of the study that looked at safety and efficacy from 20 patients from each dosing arm. So far, 90 patients have been enrolled across the study.

Geron said that new enrollment in the higher dose arm will be suspended while the trial continues in order to obtain “additional and more mature data,” which includes a longer follow-up of patients at 6 months.

After looking at the longer-term data, Geron said its Big Pharma partner would then decide whether to restart enrollment, add in a new dosing arm, or stop the test entirely.

A second Phase II/III trial, known as IMerge, was looking at imetelstat in patients with low/intermediate risk myelodysplastic syndromes who have relapsed or failed to respond to an erythropoiesis-stimulating agent. This will go on unmodified, Geron said.

The drug, a telomerase inhibitor, has had a long and rocky path to this point, dogged by safety issues and clinical failures that have repeatedly forced Geron to pause development. But in November 2014 the FDA finally removed a long-standing clinical hold on imetelstat, and this is when Janssen stepped in with a licensing deal worth as much as $935 million, with the two splitting R&D costs 50-50.

Janney’s Roy Buchanan, who maintained a Buy rating with a $5 fair value estimate (down from $6.50), said: “Geron announced a set of changes to the ongoing Phase II study of imetelstat in Jakafi-relapsed/refractory myelofibrosis (MF) (IMbark study), some not too surprising like dropping the 4.7 mg/kg dose. The companies’ (including partner Janssen--not covered) halting enrollment in IMbark to evaluate the 24-week data at 9.4 mg/kg in 2Q17 is being interpreted as a sign of caution, we think. That’s a reasonable interpretation, and we’re lowering our probabilities of success in MF from ~60% to ~40%, and increasing our discount rate to 20%, resulting in a new fair value of $5 from $6.50. The lack of changes to IMerge is encouraging and apparently overlooked by the market at this point.”

Geron was down 19.5% at close yesterday to $2.30 and fell by 0.4% afterhours. It currently has a market cap of $343 million.

It all looked so different nearly a year ago when in two small Phase II studies published in The New England Journal of Medicine, Geron's intravenous imetelstat charted a disease-modifying effect on MF and essential thrombocythemia.

In the 33-patient MF study, the California biotech’s drug led to a 21% rate of complete or partial remissions, and response to the treatment was particularly high among patients with certain genetic mutations.

The pair of studies sent Geron's shares up about 13%, as investors grew more optimistic about imetelstat's odds of success in some ongoing and future clinical trials.

There is a sense of déjà vu with its latest problem as, after more than two decades in drug development, Geron has never found its way to the finish line in R&D.

The company backed away from its ambitions in stem cells in 2011 and rebranded itself as a cancer-focused outfit, but a slew of clinical setbacks has reduced its pipeline to imetelstat alone and pared down that drug's potential indications in the process.

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