ktsimage
Investment Overview
Geron Corporation (NASDAQ:GERN) is a Foster City, California-based biotech primarily focused on securing commercial approval in the U.S. for its direct candidate, imetelstat.
Geron has submitted its New Drug Application (“NDA”) to the Food and Drug Agency (“FDA”) for imetelstat in the indication of transfusion-dependent anemia in adult patients, with low-to-intermediate-1 risk myelodysplastic syndromes (“MDS”) who have failed to reply, or have lost response to, or are ineligible for erythropoiesis-stimulating agents (“ESAs”).
The NDA was submitted based on positive results from a Phase 3 investigate of imetelstat, named iMerge, which, according to Geron’s Q3 quarterly report / 10Q submission:
met its primary endpoint of 8-week transfusion independence rate and a key secondary endpoint of 24-week transfusion independence rate, demonstrating highly statistically significant (i.e., P<0.001 for both) and clinically meaningful benefits in imetelstat versus placebo.
The FDA has accepted Geron’s NDA, and ascribed a Prescription Drug User Fee Act (“PDUFA”) date of June 16th, 2024, when the agency will regulate on whether to enable the drug for commercial use in the indication, or issue a Complete Response Letter (“CRL”) detailing its reasons for rejecting the application.
Before that date arrives, however, the FDA has advised it will convene an Advisory Committee (“AdComm”), in which a panel of experts will converse the suitability of imetelstat, and possibly vote on whether an approval should be granted. It’s important to note that the FDA is not obliged to follow the recommendation of its AdComm, although it is more likely to than not.
Today’s News – Lancet Publishes iMerge Phase 3 data – Geron Stock Bounces, Then Falls
In June this year, Geron stock hit its 5-year high value of ~$3.6 per share, after the company shared data at the European Hematology Association annual meeting, showing that 18% of patients in the iMerge investigate had achieved one-year transfusion independence, versus <2% of patients on placebo, and followed up by submitting its NDA. It should be noted also that the European Medicines Association has also accepted Geron’s marketing application for imetelstat, and is likely to make a decision on approval sometime next year.
In August, however, Geron’s stock price began to slide, likely in response to the FDA’s acceptance of the NDA, and the decision to convene an AdComm, implying it is uncertain about the risk to benefit profile of imetelstat and is seeking expert opinion on the matter. By mid-October, Geron stock had slipped to ~$1.75 per share, a loss of >50%.
As such, today’s news release from Geron management – that the results from iMerge have been published in the well regarded, peer-reviewed scientific publication The Lancet – might have been calculated to give the stock price a lift, by showing that the investigate data is rigorous enough for publication in a widely respected journal, and supports approval of imetelstat, allaying investor’s fears.
If that was the strategize, it does not seem to have worked. Despite a slight bump in the share price early in the day’s trading, shares are down ~5% at the time of writing (after the market has been open several hours). Let’s quickly review what has been published on the Lancet site today. First of all, the trial is discussed as follows:
In phase 3 of IMerge, a double-blind, placebo-controlled trial conducted in 118 sites including university hospitals, cancer centres, and outpatient clinics in 17 countries, patients (aged ≥18 years) with ESA-relapsed, ESA-refractory, or ESA-ineligible LR-MDS (low or intermediate-1 risk disease as per International Prognostic Scoring System [IPSS] criteria) were randomly assigned via a computer-generated arrange (2:1) to acquire imetelstat 7·5 mg/kg or placebo, administered as a 2-h intravenous infusion, every 4 weeks until disease progression, unacceptable toxic effects, or withdrawal of consent.
The findings were summarized as follows:
Between Sept 11, 2019, and Oct 13, 2021, 178 patients were enrolled and randomly assigned (118 to imetelstat and 60 to placebo). 111 (62%) were male and 67 (38%) were female. 91 (77%) of 118 patients had discontinued treatment by data cutoff in the imetelstat group versus 45 (75%) in the placebo group; a advocate one patient in the placebo group did not acquire treatment.
Median follow-up was 19·5 months (IQR 12·0–23·4) in the imetelstat group and 17·5 months (12·1–22·7) in the placebo group. In the imetelstat group, 47 (40% [95% CI 30·9–49·3]) patients had an RBC-TI of at least 8 weeks versus nine (15% [7·1–26·6]) in the placebo group (rate difference 25% [9·9 to 36·9]; p=0·0008).
Overall, 107 (91%) of 118 patients receiving imetelstat and 28 (47%) of 59 patients receiving placebo had grade 3–4 treatment-emergent adverse events. The most common treatment-emergent grade 3–4 adverse events in patients taking imetelstat were neutropenia (80 [68%] patients who received imetelstat vs two [3%] who received placebo) and thrombocytopenia (73 [62%] vs five [8%]). No treatment-related deaths were reported.
Firstly, we can clearly see the benefit of imetelstat – 40% of patients taking the drug achieved 8-week transfusion independence (“TI”) versus 15% on placebo – a statistically significant result. In its Q3 earnings presentation, Geron shares an analysis of U.S. health insurance claims database of >5.5k lower risk MDS patients, showing patients who accomplish TI are associated with improved overall survival (“OS”).
The median OS was 23.4m, with TI responders achieving OS of 37.9m, versus 9.3m amongst non-responders. Again, this seems to make a persuasive case for approval of imetelstat, and supports the efficacy of the drug, and its unique mechanism of action, defined as follows by Geron:
Imetelstat binds to telomerase and inhibits its activity, selectively killing the malignant stem and progenitor cells in the bone marrow that are the source of disease in blood cancers
From a safety perspective, we can also see clearly that imetelstat has some unwanted side-effects – 68% of all patients suffered with neutropenia – a weakening of the immune system caused by a low white blood cell count, making patients vulnerable to infections such as Sepsis, and 62% with thrombocytopenia – characterized by a low platelet count, which can bring about internal bleeding in extreme cases.
With that said, apparently most of these side-effects were resolved with dose reductions, and less than 15% of patients discontinued therapy due to treatment resistant adverse events (“TRAEs”). The investigate was also in heavily pre-treated patients, so adverse safety events were always likely to be common.
To summarize, based on its work and data to date, my suspicion is that Geron need not necessarily fear an FDA AdComm, although the company will need to prepare well for the expert panel’s questions. That appears to be the case, as Geron’s Chief Medical Officer (“CMO”) told analysts on the Q3 earnings call:
As in best practice in our industry, we are working with a consultancy group who has expertise in advisory committees to complement our deep in-house regulatory go through, and we expect to be highly prepared. We believe we have an important medicine in imetelstat and we look forward to the opportunity to converse it with experts.
Additionally, Geron’s Chairman, President and Chief Executive Officer (since 2011) suggested that an AdComm was not necessarily guaranteed telling analysts:
There’s historical information about other products in which ODAC (oncologic drugs advisory committee) had been planned. They’ve actually been scheduled and they’ve been cancelled last minute.
The CEO added that if an ODAC is convened, it would likely be “four to six weeks before the PDUFA date something appreciate that.” The fact of the timing may continue to weigh on Geron’s share price, but I would nevertheless be optimistic of a positive outcome, even despite the other major threat to imetelstat approval, which is the approval granted to Bristol-Myers Squibb’s (BMY) Reblozyl as a first-line treatment for anemia in adults with lower-risk MDS.
Reblozyl versus Imetelstat – A Key Obstacle For Geron To Overcome?
Another important reason for the reject of Geron’s stock price since August is the approval Bristol-Myers Squibb secured for its blood cancer therapy Reblozyl, in first-line treatment for anemia in adults with lower-risk MDS at the end of August.
The approval was secured based on data from BMY’s COMMANDS investigate – according to a BMY press release:
In the Phase 3 COMMANDS trial, results showed 58.5% (n=86) of patients treated with Reblozyl vs. 31.2% (n=48) of patients treated with epoetin alfa achieved the primary endpoint of RBC-TI of at least 12 weeks with a mean Hb boost of at least 1.5 g/dL within the first 24 weeks (p<0.0001).
Epoetin alfa is a standard of care erythropoiesis stimulating agent (“ESA”), which is the current first-line therapy for the MDS population. With this data, however, Reblozyl – already approved to treat anemia in adults with lower risk MDS as a second line therapy – may now be used as a first line therapy.
Arguably, the approval of Reblozyl reduces the approval chances of imetelstat as physicians have no insight into how imetelstat may work in patients formerly treated with Reblozyl, as opposed to ESAs – naturally, given it was not approved in first line at that time, Geron’s trial did not include any such patients. With Reblozyl effective at treating anemia also, what purpose would imetelstat serve?
In reality it is more complex that that, and that is good news for Geron. Reblozyl is seemingly ineffective at treating ringed sideroblast (“RS”) negative patients, with the COMMANDS investigate showing little or no benefit in this patent subset, which in fact represents around two-thirds of the MDS population. Studies of Imetelstat, on the other hand, have shown it appears effective across all types of patient. As CEO Scarlett told analysts on the Q3 earnings call:
imetelstat’s been shown to be highly effective in several key patient subgroups, where today’s available treatments did not satisfactorily address the needs of patients with this disease. These include RS negative patients, patients with high transfusion burdens, and patients with high serum equal levels. These key clinical attributes of imetelstat have been advocate reinforced by the ASH abstracts published this morning.
Reblozyl’s approval in second line low-risk MDS is in fact in RS-positive patients only, therefore it may not be unreasonable to consider imetelstat to emerge as the standard-of-care therapy in second line MDS, which Geron management believes is a $3.5bn market opportunity, as we can see in the slide (from the Q3 earnings presentation) below:
imetelstat market opportunity (Geron Q3 earnings presentation)
Analysts at evaluate pharma have suggested that imeltelstat can accomplish ~$850m of revenues by 2028, if approved. Considering Reblozyl’s list price is somewhere in the region of $150k per annum, a 24% share of the second line RS- market of 24k patients alone for imetelstat, priced similarly to reblozyl, would maintain a peak revenue figure of $850m, and if Geron was able to accomplish that figure, provided it was also able to show a clear path to profitability over time, then clearly, we would expect the company’s market cap – presently hovering around the ~$1bn mark – to grow significantly.
Some Risks To The Geron Bull Case To Consider – Concluding Thoughts
Of course, in the biotech field, no bull case is ever that straightforward, and there are multiple risks to consider in relation to buying Geron stock. Firstly, the company has no commercial stage assets at present, and a U.S. approval next June can by no means be guaranteed. This is doubly significant as Geron is not developing any other candidates of note – if imetelstat fails, the company and its share price will falter also.
Geron will potentially have to negotiate a tricky FDA AdComm, which may uncover heretofore undiscovered or unexamined risks in the iMerge data, and even if the outcome of the AdComm is positive, the FDA may still opt not to approve imetelstat given there are other feasible treatment options available in this indication.
Geron reported $355m of current assets as of Q3 2023, but the company also reported a net loss of $(45m), and a 9-month loss of $(132m), meaning the company’s funding runway may not extend beyond 2025. In order to maintain a full commercial launch of imetelstat, in the U.S. and potentially in Europe also, Geron will likely have to complete advocate fundraisings which will dilute shareholders positions and bring about the stock price to fall. In the commercial setting, Geron does not have comparable resources to rivals such as BMY, meaning it may be difficult to create awareness amongst physicians and the wider patient population.
Furthermore, the pharmaceutical industry is constantly innovating and there is no assure that, even if approved, imetelstat will remain a standard of care therapy for long. Other companies are active in the blood cancer / anemia space, including, for example, Munich, Germany based Morphosys AG (MOR), and GSK plc (GSK), the Pharma giant that acquired Sierra Oncology and its drug candidate mometlotinib, indicated for myelofibrosis patients with anemia.
Before making any investment in Geron an investor ought to consider these very tangible risks carefully. On the positive side, I would have some optimism that Geron can deliver shareholder value in the long term based on a few factors.
Firstly, the Phase 3 iMerge data shows that imetelstat can trigger lengthy transfusion independence in blood cancer patients, having met its primary endpoint (and secondary, and other key endpoints). Secondly, although the side-effects of the drug are unpleasant, they are also manageable and are not foreseen to be a barrier to approval at present.
Thirdly, the drug’s ability to be effective across the entire patient population, as opposed to certain patient subsets (as appears to be an issue with rival reblozyl) is a fact that I would expect the FDA AdComm and agency to consider significant. Fourthly, the evidence shows that there is a clear unmet need in the target patient population, which is large, and supports a potentially large market opportunity.
For all of these reasons, plus the fact that Geron is also studying imetelstat in a pioneering Phase 3 investigate that looks at overall survival, with data due in 2025, that hedges against the risk of an FDA rejection next June, or an EMA rejection next year, I believe the market may be undervaluing Geron stock at this time.
The market may be focusing on several clear and present risks, which is forgive-able, but the strength of the data – supported by today’s Lancet publication – pushes the investment case into bullish territory, in my view.
