Keep a Close Watch on Geron, Keryx, and Sangamo Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Good morning, fellow Fools! It's time to look at the movers and shakers in health care today.

Geron touts early stage cancer drug
Geron (NASDAQ: GERN  ) jumped 12% in after-hours trading yesterday after further details were released pertaining to the company's early stage trial for imetelstat as a treatment for myelofibrosis, a type of bone marrow cancer. Data from the study are set to be presented at the American Society for Hematology meeting on Monday. Consequently, the full results are under a media embargo until they are formally presented at the meeting.

According to the teaser released yesterday, patients taking imetelstat showed dramatic improvements at both the anatomical and molecular levels. But what really got investors' blood boiling was the handful of complete responses observed in the study, which is a first for this type of cancer.

What's my take? If you've followed Geron over the past few years, you probably recall hearing similar machinations when imetelstat was first being investigated as a treatment for breast cancer. As a refresher, Geron halted imetelstat's development at the mid-trial stage for breast cancer after an interim analysis showed that the drug performed worse than the currently recommended treatment. In short, you might want to take a wait-and-see approach with Geron. There will be plenty of upside remaining if imetelstat shows favorable results in a mid-stage trial after all.

Keryx in rebound mode
Keryx Biopharmaceuticals (NASDAQ: KERX  ) is rebounding nicely in pre-market this morning after dropping more than 11% yesterday. As a refresher, Keryx's drop was initiated by a mere rumor that the company's flagship drug candidate Zerenex would not receive the vaunted New Chemical Entity, or NCE, status from the U.S. Food and Drug Administration. Earlier this year, Keryx submitted a New Drug Application, or NDA, for Zerenex to the FDA as a treatment for elevated serum phosphate levels in patients with chronic kidney disease on dialysis.

Why is NCE status important? Simply put, NCE status confers an additional five years of market exclusivity to new drugs against generic competition. So it is a big deal.

What's my take? I usually don't put much stock in biotech rumor mills and suggest you don't either. I have no clue how the FDA is going to view the novelty of Zerenex's active ingredient ferric citrate, and predicting what the FDA is going to do on any given issue is often a Fool's game. The bigger issue, to my mind, is that Keryx shares aren't exactly cheap after their spectacular rise this year. With regulatory and commercialization risks still very much on the table, I think it's wise to tread lightly with Keryx for the time being.

Sangamo reports HIV trial data
Sangamo Biosciences (NASDAQ: SGMO  ) is up in pre-market this morning after announcing positive proof of concept results for its HIV therapy SB-728-T. The early stage data showed that Sangamo's therapy met threshold levels of engraftment on CD4 cells, which should provide a barrier to HIV entry into the immune system.

For those new to this story, Sangamo's gene modifying approach to the treatment of HIV basically attempts to mimic a naturally occurring mutation called CCR5delta32 that aids in blocking the virus from entering the immune system. In an interesting twist to the tale, this is the same mutation that helped some Europeans survive the black plague.

While an effective therapy for HIV would undoubtedly be a game-changer for a developmental biotech like Sangamo, you should proceed with caution with this one. Sangamo already has a market cap exceeding $700 million, which is on the high side for a biotech at this stage in its lifecycle. That said, I am a big fan of Sangamo's novel approaches to treating challenging diseases such as HIV and Huntington's disease. So Foolish investors should definitely keep tabs on Sangamo as it continues make progress on the clinical front.

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