Geron's (GERN) Q1 Earnings Beat, Revenues Miss, Stock Up

Geron Corporation (NASDAQ:GERN) incurred a loss of 5 cents per share in first-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of 6 cents. In the year-ago quarter, the company had incurred a loss of 4 cents per share.

Quarterly revenues during the quarter came in at $0.06 million, which missed the Zacks Consensus Estimate of $0.21 million. Revenues comprised royalty and license fee revenues received under various non-imetelstat license agreements. Revenues in the year-ago quarter were $0.32 million. Revenues declined as of active license agreements reduced due to expiry of patents of Geron’s underlying technology.

Shares were up 1.7% in after-market trading on May 3. So far this year, shares of Geron have rallied 80% compared with the industry’s 5.1% increase.

Research and development (R&D) expense increased 145% year over year to $5.9 million. Following the termination of collaboration with Janssen, a subsidiary of J&J (NYSE:JNJ) , for imetelstat development, Geron bore full development cost that was earlier shared equally with Janssen. This led to a significant increase in R&D expenses.

General and administrative (G&A) expenses rose 3.6% to $5.5 million, reflecting recruitment expenses for new board members.

Geron ended the quarter with $170 million in cash and investments compared with $182 million at the end of the fourth quarter.

Pipeline Update

Following the termination of the agreement with Janssen in September 2018, Geron regained global development rights to imetelstat and decided to continue developing imetelstat independently.

Geron is expected to assume sponsorship of the investigational new drug (“IND”) application for imetelstat by the end of the second quarter. The company will be able to initiate enrollment in the planned phase III portion of phase II/III study, IMerge, evaluating imetelstat in myelodysplastic syndromes (“MDS”) following the transfer of IND.

Another phase II study – IMbark – is evaluating the candidate in myelofibrosis. In December, Geron presented updated median overall survival (“OS”) data from the higher dosage arm (9.4 mg/kg) of the study. The candidate achieved median OS of 29.9 months, which suggests a meaningful survival outcome. A decision on the path toward late-stage development in myelofibrosis is expected to be announced by the third quarter of 2019.

Geron Corporation Price, Consensus and EPS Surprise

Geron Corporation Price, Consensus and EPS Surprise | Geron Corporation Quote

Zacks Rank & Stocks to Consider

Geron currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the pharmaceutical sector include Editas Medicine, Inc. (NASDAQ:EDIT) and Alder BioPharmaceuticals, Inc. (NASDAQ:ALDR) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Editas’ loss estimates narrowed from $2.74 to $2.68 for 2019 and from $3.05 to $3.01 for 2020 over the past 60 days.

Alder’s loss estimates narrowed from $4.59 to $4.47 for 2019 and from $3.24 to $3.20 for 2020 over the past 60 days.

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