Shares of clinical-stage biotech Geron Corp. (NASDAQ:GERN) rose by as much as 19.3% today on nearly six times the average daily volume. What's driving this double-digit move and massive surge in volume?
Geron's stock has been on fire ever since the company reported its fourth-quarter earnings last Friday. The headline item was that company's experimental blood cancer drug, imetelstat, is reportedly trending in the right direction in its midstage trials for advanced myelofibrosis and myelodyspastic syndromes.
As of 3:35 p.m. EDT, shares were up 19.1%.
Geron is currently awaiting the all-important "continuation decision" by its partner Johnson & Johnson (NYSE:JNJ) in regards to imetelstat's future development. If J&J does decide to carry on with the drug's development, Geron will be in line for another milestone payment, presumably in the third or fourth quarter of this year.
Because imetelstat has the clear potential to become a megablockbuster product, however, the more likely scenario is that J&J will simply buy Geron lock, stock, and barrel before the end of this year. J&J, after all, lost a good chunk of the growing revenue stream from blood cancer drug Imbruvica when it decided to play the waiting game with its developer, Pharmacyclics. J&J isn't likely to make the same mistake with Geron and imetelstat.
Geron's stock is presently pushing up against the critical $5 mark, which could prove to a pivotal point in the battle against short-sellers. Once Geron reaches or exceeds $5, after all, a broader range of institutional investors will be able to buy the stock.
Equally as important, some brokerages will also remove their "low priced equity" fees at this point, and Geron's shares will become marginable as well. Put simply, short-sellers may be about to throw in the towel on Geron for the aforementioned reasons. And when they do, this promising developmental-stage biotech stock could take yet another leap higher . Stay tuned.