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Why Geron Corporation Stock Is Falling Today

By Prosper Junior Bakiny - Mar 12, 2021 at 12:06PM

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The company released its latest quarterly update, and investors were not impressed.

What happened?

Shares of clinical-stage biopharmaceutical company Geron Corporation (GERN 0.76%) are dropping sharply on Friday following the company's release of its fourth-quarter and full-year 2020 financial results, as well as some important clinical updates. As of 11:43 a.m. EST, Geron's stock was down by 8.7% after falling by as much as 10.1% earlier in the day.

So what

For its 2020 fourth quarter, ending on Dec. 31, Geron reported revenue (from license fees and royalties) of $50,000, compared to the revenue of $171,000 it had recorded during the prior-year quarter. Also, the healthcare company recorded a net loss of $23.8 million -- or $0.07 per share -- compared to the net loss and net loss per share of $29 million and $0.15, respectively, that it reported during the fourth quarter of its fiscal year 2019. However, Geron's meager revenue and net loss are unlikely to be the reasons why investors are offloading its shares today. 

Five downward pointing arrows on a blackboard.

Image source: Getty Images.

Clinical-stage biopharmaceutical companies typically have no products on the market and have to spend a great deal of capital on their clinical efforts. As a result, few are profitable, and that's something the market knows. The more likely reason why Geron's stock is falling today is the delay the COVID-19 pandemic is causing in some of its clinical trials. The company noted that two of its ongoing phase 3 studies for Imetelstat, Geron's lead candidate, have been hurt by the outbreak.

Now what 

These clinical-trial delays could have a real financial impact on Geron down the line, as they could set back the launch of Imetelstat in certain markets. With this backdrop in mind, it is understandable that investors were not thrilled with Geron's latest updates.

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