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What happened

Shares of Geron Corporation (NASDAQ:GERN), a clinical-stage biotech, are down by more than 15% as of 11 a.m. EDT on Monday, after the company shared an update with investors on two of its ongoing clinical trials.

So what

Geron announced the results of a planned internal review that was performed by the company's partner Janssen, a subsidiary of Johnson & Johnson (NYSE:JNJ), related to its lead compound, imetelstat.

The first update was from the IMbark study, a phase 2 trial testing imetelstat in two different doses as a potential treatment for the blood cancer myelofibrosis. Janssen concluded that clinical activity in the patient cohort that received the lower dosage, which was 4.7 mg/kg, did not warrant further investigation. Janssen deiced to close this arm to new-patient enrollment. 

However, Janssen decided to move forward with the study in the higher-dosing group. Patients in this group received a dose of 9.4 mg/kg, and Janssen said that it is seeing "encouraging trends" in efficacy. However, enrollment in the trial is currently on hold until the company can review longer-term data that will be gathered at the 24-week mark. Janssen plans on conducting another internal review at that point. Results from the review are expected to be released in the second quarter of 2017, at which time next steps for the study will be determined.

The second update was related to the company's IMerge study, a two-part phase 2/3 clinical trial testing imetelstat in patients with myelodysplastic syndromes, which are bone marrow disorders. Janssen stated that part 1 of the trial is fully enrolled, and the internal review showed that safety and efficacy data from this trial was consistent with a pilot study conducted at the Mayo Clinic. Janssen stated that it is moving forward with the study as planned, and another internal review will be conducted in the second quarter of 2017. After that second review is complete, the company will announce whether it will move forward with the planned phase 3 trial.

Traders appear to be less than thrilled with these updates and are selling off shares as a result.

Now what

Geron's future is completely dependent on the clinical success of imetelstat, so it's quite a disappointment to see that the results from the 4.7 mg/kg dose in the IMbark study did not warrant further investigation. That puts all of the clinical trial's hopes into the hands of the 9.4 mg/kg group, which clearly raises Geron's risk profile. 

For now, it looks like shareholders will have some waiting to do before they will get another look at how imetelstat is performing. I'd recommend that potential investors stay on the sidelines until we get another look at how those two clinical trials are progressing.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.