A month has gone by since the last earnings report for Geron (GERN). Shares have added about 27.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Geron due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Geron’s Q4 Loss In Line, Revenues Beat
Geron incurred an adjusted loss of 5 cents (excluding settlement gains and change in equity fair value) per share in fourth-quarter 2018, in line with the Zacks Consensus Estimate as well as the year-ago quarter loss.
Quarterly revenues nearly doubled from the year-ago quarter number to $0.38 million, which outpaced the Zacks Consensus Estimate of $0.22 million. Revenues comprised royalty and license fee revenues received under various non-imetelstat license agreements.
Research and development (R&D) expenses more than doubled to $5.1 million. Following the termination of collaboration with Janssen, a subsidiary of J&Jfor imetelstat development, Geron bears full development cost that was earlier shared equally with Janssen. This led to the significant increase in R&D expenses.
On the flip side, general and administrative (G&A) expenses fell 10.9% to $4.9 million due to lower personnel-related expenses, partially offset by higher consulting and legal expenses.
Geron ended the quarter with $182 million in cash and investments compared with $184.8 million at the end of the third quarter.
Geron’s yearly revenues remained flat year over year at $1.1 million in 2018. The company incurred an adjusted loss of 16 cents per share, narrower than the year-ago loss of 18 cents per share.
Geron announced that it expects operating expenses to be in the range of $65-$70 million in 2019. This will include few one-time costs related to transition of imetestat and transfer of investigational new drug (IND) sponsorship from Janssen to Geron among others. The significant increase in estimated operating expenses is also due to the fact that Geron is planning to expand its development team for imtelstat.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
At this time, Geron has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Geron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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