Patients with life-threatening hematologic myeloid malignancies, including myelofibrosis, have limited treatment options and a poor prognosis, so there's a big need for new treatment options, such as Geron Corp.'s imetelstat, which is currently in phase 2 studies and licensed to Johnson & Johnson (NYSE:JNJ).
Worries that Johnson & Johnson might reprioritize its R&D pipeline and return licensing rights to Geron Corp have been weighing down Geron Corp.'s share price; however, investors are hopeful that won't be the case following comments made by Geron Corp. on its quarterly conference call earlier this week.
Johnson & Johnson hasn't yet decided whether to proceed with the second segment of its phase 2/2 IMerge trial, which is evaluating imetelstat in patients with low-to-intermediate risk MDS who have failed to respond to prior treatment with an erythropoiesis-stimulating agent. Last August, it announced it would enroll 20 more patients with profiles that might make them more amenable to imetelstat and then review those results before making a go/no-go decision. According to management, the 20th patient was enrolled earlier this year, clearing the way for a review of this trial's data soon.
Similarly, Johnson & Johnson's decision on imetelstat hinges on its phase 2 IMbark study, which is evaluating imetelstat in patients with treatment-resistant intermediate or high-risk myelofibrosis relapsing following treatment with Jakafi. Last year, J&J said it would review data from this trial in the first quarter of 2018 to inform its decision on enabling a protocol amendment allowing long-term treatment and follow-up. According to Geron Corp., J&J made a third review of trial data in March, and following that review, it decided to amend the trial to include an extension phase. Geron Corp. also indicated that it expects data on overall survival to allow J&J to make a decision to continue or discontinue its work on imetelstat in Q3, 2018.
Sadly, the overall survival for patients who discontinue Jakafi is about 14 months, and that prognosis lends credence to the thinking that if imetelstat is successful in its studies, it could become an important treatment option for patients with hematologic myeloid malignancies.
A decision to continue development by Johnson & Johnson is important because a continuation would trigger up to a $135 milestone payment to Geron Corp, plus open the window to $765 million in development, regulatory, and sales-based milestones. If trials eventually lead to FDA approval, then Geron Corp. can collect up to the low 20% range in royalties on sales, too, if it exercises an option to co-market imetelstat.
There is, however, no guarantee that Johnson & Johnson will proceed, or that if it does, that imetelstat's phase 3 studies will confirm midstage findings. There's a possibility for an accelerated review following phase 2, but historically, the FDA has wanted to see a comparator arm included in studies before granting approval, and that's something that doesn't exist in imetelstat's current studies.
Overall, Geron Corp. is a high-risk, high-reward stock with a very important upcoming catalyst, so investors should approach it a bit cautiously.