Shares of drug maker Geron Corporation (NASDAQ:GERN) skyrocketed nearly 27% this week, after MedTechBio published an article on Seeking Alpha explaining the merits of its long position. Despite your view of the company, an open-minded investor will see that MedTechBio made some solid points in its argument.
Key points made in the article hinge on the future of Geron’s Imetelstat, which “appears to be about twice as effective as Celgene’s Revlimid in providing transfusion independence for Myelodysplastic Syndrome, “MDS,” patients”. On top of this, the author believes that “Geron’s impending dominance in Myelofibrosis makes Celgene’s $7B acquisition of Impact Biomedicines a tragic bungle.”
MedTechBio wrote, “Geron is only a $300MM market capitalization company, chasing after biotech giants Incyte and Celgene. If all goes well with these trials, a big chunk of the two biotech giants’ market cap may soon be enjoyed by Geron investors. Imetelstat has about $100MM in the bank with no debt. However, the company still does not have an approved drug. Should the collaboration agreement with JNJ collapse or should unexpected safety issues emerge, Geron’s stock could tumble below the $1 Nasdaq listing requirement. The good news for Geron investors is that with the tailwinds from both the IMerge and IMbark trials as well as FDA fast track designation for its lead drug, Geron is poised to shine in the coming months and years.”
Overall, however, TipRanks points to caution when it comes to Geron, with the Street divided on whether to be bullish or sidelined on this small cap drug player. Out of 4 analysts polled in the past 12 months, 2 rate a Buy rating on GERN, while 2 issue a Hold.
