) posted a net loss of 21 cents per share in the fourth quarter of
2011, wider than the Zacks Consensus loss Estimate of 20 cents but
below the year-ago loss of 24 cents. Fourth quarter revenues of
$251,000 were below the Zacks Consensus Estimate of $300,000 and
the year-ago revenues of $1.1 million.
Full year 2011 loss came in at 73 cents, below the Zacks
Consensus Loss Estimate of 74 cents and the year ago loss of 78
cents. Revenues came in at $2.4 million, below the Zacks Consensus
Estimate of $3 million and the year-ago revenues of $3.6
Quarter in Detail
Revenues consisted entirely of royalties and license fees. Geron
has several license agreements with various oncology, diagnostics,
research tools, agriculture and biologics production companies.
Geron did not recognize any revenues from collaborative agreements
in the reported quarter.
Total operating expenses remained almost flat at $25.2 million.
Research and development expenses declined 6.4% to $19.7 million
due to reduced clinical drug product purchases and manufacturing
costs and lower scientific supply expenses resulting from the
discontinuation of the stem cell programs.
In November 2011, Geron had announced its intention to exit the
stem cell research market. The company, which was a leader in stem
cell research, intends to focus on its oncology programs
Key candidates in the oncology program include imetelstat, which
is currently in four phase II studies (non-small cell lung cancer,
breast cancer, essential thrombocythemia and multiple myeloma), and
GRN1005 (in phase II studies for brain metastases arising from
non-small cell lung cancer and breast cancer). While top-line data
from the imetelstat studies should be out by late 2012, top-line
data on GRN1005 should be available before the end of the second
quarter of 2013.
Imetelstat is currently in four phase II studies. While two
large randomized phase II studies are evaluating imetelstat for the
treatment of non-small cell lung cancer and metastatic breast
cancer, two other studies are evaluating the candidate for multiple
myeloma and essential thrombocythemia.
Meanwhile, general and administrative expenses increased 18.2%
to $5.5 million. The increase was due to higher personnel-related
expenses resulting from management transitions.
During 2012, Geron expects cash usage of about $65 million. This
means that the company will exit 2012 with about $90 million of
balance sheet cash. Geron believes these funds will be sufficient
to meet its requirements beyond mid-2013. R&D spend in 2012
will go down by $25 million as Geron was previously expecting to
spend this amount per year on its stem-cell development
As far as the stem cell candidates are concerned, Geron intends
to divest these programs including GRNOPC1 (currently in phase I
for spinal cord injury), programs in cardiomyocytes for heart
disease, pancreatic islet cells for diabetes, dendritic cells as an
immunotherapy vehicle and chondrocytes for cartilage repair.
Neutral on Geron
We currently have a Neutral recommendation on Geron, which
carries a Zacks #3 Rank (short-term Hold rating). While the
company's decision to focus on oncology should deliver in the
long-term, we expect the stock to remain range-bound in the near
term given the lack of catalysts. Results on the oncology
candidates should start coming out in late 2012 -- we prefer to
remain on the sidelines until we see data on these candidates.
GERON CORP (
): Free Stock Analysis Report
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