UPDATE: Geron Ends Study of Breast Cancer Drug; Shares Plunge
Last Update: 9/10/2012 6:20:06 PM
--Geron halts mid-stage study on drug to treat breast cancer
--News raises concerns about drug's ability to treat other cancers
--Shares fall 56% after setting a new high for the year
(Updates throughout with comments from Geron CEO and an analyst.)
By Joseph Walker
Geron Corp. (GERN) halted a mid-stage study examining the use of its imetelstat
drug in breast cancer patients because of doubts about the drug's effectiveness.
The news raised serious questions about one of the company's two drugs in
development and sent shares of the biopharmaceutical company down more than 50%
to an all-time low, a session after setting a new 52-week high.
"I don't see a path forward clinically for imetelstat," Stifel Nicolaus analyst
Brian Klein said. "Before you had a two-pipeline company with two interesting
oncology assets, where in my mind, it's now just one."
Geron Chief Executive John Scarlett disputed that notion, saying "imetelstat is
not dead." The company is focused on testing the drug on cancers affecting the
blood, bone barrow and lymph nodes, Scarlett noted, and could apply it to other
tumors.
"Most successful anti-cancer drugs have many failures in many types of cancer and
the ones that go on to be successful have failed like this one has," Mr. Scarlett
said.
The suspension of the imetelstat breast cancer trial comes after a company
analysis showed patients given imetelstat in conjunction with chemotherapy drug
paclitaxel experienced a median of 6.2 months without the disease progressing,
compared to eight months for patients who were treated with the chemotherapy
alone.
The analysis was conducted after a routine safety review found that more
imetelstat patients had died during the study than the group undergoing just
chemotherapy. The company had been evaluating imetelstat in combination with
chemotherapy drug paclitaxel and comparing it to paclitaxel alone.
Imetelstat's toxicity profile in the breast cancer trial doesn't bode well for
its future success, said Mr. Klein from Stifel Nicolaus, who noted the trials in
breast and lung cancer were more advanced and had the greater market potential.
The results from the trials studying imetelstat in blood cancers are expected in
the fourth quarter. Geron said Monday that it was unlikely to proceed with a
separate study of imetelstat's effectiveness with lung cancer patients after an
interim analysis showed just a modest trend toward efficacy and that the trial
was unlikely to meet its goals.
CEO Scarlett said while Geron hasn't fully evaluated the financial impact from
the negative trial news, it has no restructuring or layoff plans.
"We have adequate cash today to do the studies we plan to do, that we're doing as
we speak, and as we look at our path forward, we'll make the same decisions every
company makes on what we need in terms of people and cash going forward," Mr.
Scarlett said.
The company ended its most recent quarter on June 30 with $122.3 million in cash
and investments, and reported a loss of $18.3 million.
Mr. Klein said he expects Geron, which has about 110 employees, to cut its staff
somewhere between 20% and 30% and that the company will redeploy its research and
development budget, and divert more of its research and development budget away
from imetelstat and into its other drug, the brain cancer treatment GRN1005.
GRN1005 also is in mid-stage studies with lung and breast cancer patients who
have had tumors spread to their brains. The company said it expects to announce
interim data on the breast cancer study in early December and top-line results on
both the lung and breast cancer trials in the second quarter of 2013.
Mr. Scarlett said the company is optimistic about the market opportunity for
GRN1005 because as cancer patients live longer, more of them are seeing cancer
spread to their brains. Mr. Scarlett said 35% of women with HER2 positive breast
cancer eventually developed brain tumors.
Geron shares on Monday hit an all-time low of $1.23 and closed at $1.28, down 56%
on the day. On Friday, the stock had hit a 52-week high of $2.99. |
