Shares of Geron (NASDAQ: GERN) fell 69% in September after regaining rights to its telomerase inhibitor imetelstat from partner Johnson & Johnson (NYSE: JNJ).
Superficially, Geron is more valuable having full rights to imetelstat than sharing them with Johnson & Johnson, but the healthcare conglomerate handing back the drug is a sign that imetelstat might not be quite as valuable as Geron's investors believed it was.
Johnson & Johnson said the decision was made as a "result of a strategic portfolio evaluation and prioritization of assets" within its portfolio, but the data on imetelstat must have come into consideration in what got prioritized.
Imetelstat is being tested in a bone marrow disorder called myelodysplastic syndromes. The first part of the clinical trial, dubbed IMerge, enrolled 32 patients who had failed a prior treatment with an erythropoiesis stimulating agent (ESA), including 13 patients who had not received prior treatment with either a hypomethylating agent (HMA) or Celgene's Revlimid and did not have a del(5q) chromosomal abnormality.
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Data presented at the European Hematology Association meeting showed 54% of those 13 patients were red blood cell transfusion independent (RBC-TI) for at least eight weeks, compared to 34% for the overall study population.
To confirm the high RBC-TI rate in that subpopulation, Johnson & Johnson enrolled 25 more patients who were non-del(5q) and hadn't received an HMA and lenalidomide treatment, but the initial look at those patients pegged the rate of RBC-TI for at least eight weeks at just 28%. Admittedly, there isn't much data to go on, but it appears these early-stage patients aren't being helped by as much as the results from the initial 13 patients suggested.
Ignoring what Johnson & Johnson thinks of the data, Geron is pushing on with plans to start the phase 3 portion of the IMerge study to get imetelstat approved to treat patients with myelodysplastic syndromes who have failed a prior treatment with an ESA, which is expected to start in the middle of next year.
Before then, investors should get more data from the initial and expansion cohorts for phase 2 portion of IMerge at the American Society of Hematology meeting in December, assuming the abstract is accepted. Johnson & Johnson has also submitted data from the IMbark study in patients with myelofibrosis, although Geron is still trying to decide whether to pursue advancing imetelstat into a phase 3 trial in that bone marrow disorder.
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Brian Orelli has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Celgene. The Motley Fool owns shares of Johnson & Johnson and has the following options: short October 2018 $135 calls on Johnson & Johnson. The Motley Fool has a disclosure policy.