U.S. Markets close in 6 mins

Ahead of the Bell: Analyst rates Geron 'sell'

The Associated Press

The drugmaker Geron Corp.'s development plan for the potential blood disorder treatment imetelstat is "flawed and sluggish," according to a Stifel analyst who lowered his rating on the shares.

Dr. Brian Klein said in a research note that he lowered his rating on shares of the Menlo Park, Calif., company to "Sell" from "Hold."

Geron said Tuesday a Mayo Clinic researcher has started an investigator-sponsored trial to study the safety and effectiveness of imetelstat in patients with myelofibrosis. The company also is planning a company-sponsored study.

Myelofibrosis is a disease that causes red blood cells to build up inside bone marrow and slows the production of healthy blood cells.

Geron pioneered the development of embryonic stem cell therapies and ran the first human trials of treatments based on embryonic stem cells. But the company has had some setbacks. In September Geron said imetelstat did not succeed in studies that tested it as a treatment for breast cancer and lung cancer. Its shares then plunged last December after it said it would end the development of another experimental cancer drug and cut 43 jobs, or about 40 percent of its staff.

Klein said in a Wednesday research note that Geron should also start this year an early-stage study of imetelstat in treating myeloid leukemias. That would give the company an independent confirmation of any findings from the investigator-sponsored trial and broaden its database on safety and effectiveness for the drug in those indications.

"However, given management's current strategy, we have reservations on the development plan for (imetelstat) and therefore recommend current Geron investors sell in the absence of a more rational clinical program," the analyst wrote.

Geron representatives did not immediately return a call and email seeking comment from The Associated Press early Thursday morning.

Its shares finished at $1.29 on Wednesday. They have traded in a range of 91 cents to $2.99 over the past year.