What happened

Geron Corp. (NASDAQ:GERN), a small-cap cancer specialist, posted a disappointing 44% decline in its share price over the course of 2018, according to data from S&P Global Market Intelligence. Worse still, the biotech's stock ended the year down by over 84% from its high watermark in 2018.   

Geron's poor showing last year can be traced to a singular event: Johnson & Johnson's (NYSE:JNJ) decision to end a four-year-long blood cancer collaboration centering around the telomerase inhibitor imetelstat. J&J reportedly terminated its participation in imetelstat's clinical development for business reasons, and not necessarily because of the drug's emerging mid-stage data in patients with either relapsed/refractory myelofibrosis or myelodysplastic syndromes.  

A black chalkboard chart showing a series of white bar graphs that dip initially but increase in size along the x-axis.

Image Source: Getty Images.

So what

J&J's decision proved particularly devastating for Geron because the biotech was clearly betting the house on this collaboration panning out. Geron, after all, had slashed its own internal research and development capabilities in the lead-up to this partnership, thus basically transforming the company into a holding entity for imetelstat's intellectual property.

Now the biotech has the daunting task of hiring third parties to advance imetelstat into late-stage development. That's no easy task for a company with limited resources and a share price currently hovering around the Nasdaq's minimum bid requirement.  

Now what

Last month, Geron announced that it plans on initiating a pivotal stage trial for imetelstat's myelodysplastic syndromes later this year, and it also plans on consulting industry experts about the therapy's potential in advanced myelofibrosis, as well. That's the good news. 

The bad news is that Geron is several years away from having the data necessary to file for imetelstat's regulatory approval in any indication. Moreover, the next 12 to 18 months appear to be devoid of a major clinical catalyst that could spur a significant rebound. Investors, therefore, may want to watch this small-cap biotech stock from the safety of the sidelines for the time being.

Check out the latest Geron earnings call transcript.

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