Recent Pullback Buying Opportunity For Blood Cancer Firm Geron: Goldman Sachs

Goldman Sachs has upgraded Geron Corporation GERN to Buy from Neutral, with a price target of $4.

Recently, the FDA assigned a standard review and a Prescription Drug User Fee Act (PDUFA) action date of June 16, 2024, for Geron's New Drug Application (NDA) for imetelstat for transfusion-dependent anemia in patients with lower-risk myelodysplastic syndromes. 

In addition, the FDA informed that it plans to hold an advisory committee meeting.

The analyst says that imetelstat will likely be approved in this setting, with unadjusted peak sales of $1.5 billion (probability of success of 90%).

Further, the recent approval of Bristol-Myers Squibb & Co BMY Reblozyl (luspatercept) in frontline LR-MDS across a broad population (RS+/-) does not negate the blockbuster opportunity for imetelstat in the second-line setting.

Thus, the recent pullback in shares (-22.5% m/m) has presented a buying opportunity for the stock. 

Goldman analysts note that imetelstat has followed an extensive development journey marked by numerous clinical setbacks across various cancer types. 

Particularly noteworthy was a pilot study in myelofibrosis, which revealed both clinical effectiveness and significant adverse events, including hematological complications and liver-function irregularities. 

In anticipation of the upcoming AdCom meeting, these safety findings from the previous study are expected to be a key topic of discussion. 

However, it's worth noting that more recent data from GERN regarding imetelstat's use in LR-MDS presents a different safety profile compared to the earlier challenges. 

This divergence may be attributed to several factors, including GERN's adjustment of the dosing regimen for LR-MDS and extended dosing intervals. Additionally, differences in the patient population and the nature of the underlying disease could contribute to the distinct safety profile observed in LR-MDS.

Price Action: GERN shares are down 1.71% at $2.30 on the last check Tuesday.