) posted a net loss of 15 cents per share in the first quarter of
2012, narrower than the Zacks Consensus loss Estimate of 18 cents
and the year-ago loss of 20 cents. First quarter revenues of $1.3
million were well above the Zacks Consensus Estimate of $500,000
but below the year-ago revenues of $1.5 million. A significant
decline in expenses led to the narrower loss.
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 declined 22% to $20.2 million. Research
and development expenses declined 10.1% to $15.1 million due to
reduced personnel-related costs and lower scientific supply
expenses resulting from the discontinuation of the stem cell
programs. This was partially offset by higher costs related to the
studies being conducted with imetelstat and GRN1005. Meanwhile,
general and administrative expenses fell 44% to $5.1 million. Lower
personnel-related expenses resulting from management transitions
led to the decline.
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 breast cancer and non-small cell lung cancer
studies should be out by year end, top-line data on GRN1005 should
be available before the end of the second quarter of 2013.
During 2012, Geron expects cash usage of about $65 million.
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. 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 from 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 (GERN): Free Stock Analysis Report
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