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Has Geron Corporation's Stock Been De-Risked?
Motley Fool George Budwell, The Motley Fool,Motley Fool 55 minutes ago
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Geron Corporation (NASDAQ: GERN), an upstart blood cancer specialist collaborating with Johnson & Johnson (NYSE: JNJ) for its first-in-class telomerase inhibitor imetelstat, saw its shares gain a whopping 28.7% last Friday on roughly 10 times the average daily volume. The biotech's September call options also went absolutely bonkers, indicating that the market clearly expects Geron's stock to take flight within the next four weeks of trading.
What kicked off this pronounced rally? Geron's shares shot up in response to a job posting by J&J's biotech wing Janssen for a Europe, Middle East, and Africa strategic pricing manager that specifically named imetelstat six times in the description of the position's duties. Although J&J later downplayed the ad by stating that the "job posting does not have anything to do with its licensing deal with Geron," according to a report by Bloomberg, investors apparently weren't buying this denial based on the stock's strong finish last Friday.
The words
Image source: Getty Images.
Should investors take this job posting as a definitive sign that Geron's stock is now de-risked, or is this ad a nonevent, as J&J stated? Let's take a look to find out.
What's known and unknown
The skeptics were quick to point out that a job posting is a far cry from a positive continuation decision. That's certainly fair. For what it's worth, the ad does mention both Imbruvica and imetelstat. Therefore, J&J's follow-up statement that the position is simply "consistent" with the company's blood cancer portfolio is certainly plausible. In that case, this job posting is essentially a nonevent.
Then again, the posting is rather detailed in terms of the job's key responsibilities. If we take the ad at face value, for instance, J&J seems to already have a plan to launch imetelstat as a treatment for low-risk myelodysplastic syndromes (MDS) and induction-ineligible acute myeloid leukemia (AML) in Europe far sooner than anyone predicted. That scenario would be a major win for Geron's shareholders, thereby justifying last Friday's double-digit rally.
Unfortunately, there is no way to know whether J&J is being forthright about the purpose of this job posting or if someone let the cat out of the bag. However, it is quite odd that this ad even saw the light of day at this crucial juncture. After all, J&J is only weeks away from announcing its continuation decision regarding imetelstat, and the drug's midstage trial data underscoring this decision has likely been vetted by now. J&J, therefore, had to at least suspect that this job posting would turn out to be a market-moving event for Geron's stock.
Even so, the only solid takeaway here seems to be that imetelstat remains in J&J's plans with the clock winding down. That doesn't mean that a positive continuation decision is a slam dunk, but the chances do appear to be climbing.
Has Geron's stock been de-risked?
The blunt answer to this question is no. Geron is still a high-risk speculative biotech play, and investors certainly shouldn't shrug off this fact based on a simple job posting. That being said, short-sellers should also probably think twice before taking a position at this stage. After all, Geron's stock could double or triple in value in the next few weeks if this curious job posting turns out to be a harbinger of things to come.
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Recent GERN News
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/17/2024 08:05:30 PM
- Geron Reports Inducement Grants Under Nasdaq Listing Rule 5635(c)(4) • Business Wire • 05/16/2024 08:30:00 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 05/15/2024 08:07:34 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/13/2024 08:05:15 PM
- Geron Corporation Reports First Quarter 2024 Financial Results and Business Highlights • Business Wire • 05/02/2024 11:00:00 AM
- Geron to Announce First Quarter 2024 Financial Results on May 2, 2024 • Business Wire • 04/25/2024 08:30:00 PM
- Geron Reports Inducement Grants Under Nasdaq Listing Rule 5635(c)(4) • Business Wire • 04/18/2024 08:30:00 PM
- Geron to Participate at Upcoming Investor Conferences in April • Business Wire • 04/03/2024 08:30:00 PM
- Geron Corporation Announces Pricing of $150 Million Underwritten Offering of Common Stock and Pre-Funded Warrants • Business Wire • 03/19/2024 01:07:00 PM
- Geron Announces FDA Oncologic Drugs Advisory Committee Votes in Favor of the Clinical Benefit/Risk Profile of Imetelstat for the Treatment of Transfusion-Dependent Anemia in Patients with Lower-Risk MDS • Business Wire • 03/14/2024 07:54:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/28/2024 12:20:38 PM
- Geron Corporation Reports Business Highlights and Fourth Quarter and Full Year 2023 Financial Results • Business Wire • 02/28/2024 12:05:00 PM
- Geron Reports Inducement Grants Under Nasdaq Listing Rule 5635(c)(4) • Business Wire • 02/22/2024 09:30:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/16/2024 09:11:53 PM
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