BTIG starts Geron at buy; PT $4

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BTIG launched coverage of Geron (NASDAQ:GERN) with a “buy” rating and $4 price target. The stock closed at $1.31 on Feb. 12.

Geron is focused on development of imetelstat, a telomerase inhibitor active in the treatment of highly transfusion-dependent myelodysplastic syndromes (MDS) and relapsed/refractory myelofibrosis (MF).

The drug was partnered with J&J for several years but eventually returned to Geron despite clear indications of efficacy, which were updated at the 2018 ASH conference. Geron plans to take over development with pivotal trials starting in 2019.

“Imetelstat’s efficacy looks similar to luspatercept’s (in much more severe patients), suggesting Geron is likely to attract investor interest as corroborative pivotal readouts approach,” writes analyst Thomas Shrader.

He said imetelstat data in higher risk MDS “suggest about a 37% transfusion response rate in patients with high transfusional burden. These results are probably unique in these sicker patients that are unlikely to benefit from EPO or luspatercept,” he added.

Mr. Shrader also said development of imetelstat in MF is promising based on early trials that “suggested up to 20% of patients experienced complete responses (CR), including bone marrow normalization, something rarely observed,” and were peer-reviewed in the New England Journal of Medicine.

“Subsequent trials have suggested lower CR rates but a 2X overall survival (OS) benefit, again rarely seen in MF,” he said. The company is working to devise a pivotal trial that targets OS, rather than current spleen reduction endpoints, and expects to announce plans in the third quarter of 2019.

Stephen Kilmer