) faced another pipeline setback recently with the company
deciding to scrap the development of its phase II oncology
candidate, GRN1005. GRN1005, which became a part of Geron's
pipeline under an agreement with Angiochem, Inc., was being
studied for the treatment of cancers in the brain.
Geron decided to discontinue the development of the candidate
based on an interim analysis of a phase II study (GRABM-B) being
conducted in patients with brain metastases arising from breast
cancer. Results showed that there were no confirmed intra-cranial
Meanwhile, Geron decided to discontinue another phase II study
(GRABM-L - patients with brain metastases arising from non-small
cell lung cancer) due to enrolment issues.
Following its decision to discontinue the development of
GRN1005, Geron sent a termination notice to Angiochem for the
exclusive license agreement granting Geron rights to GRN1005 as
well as an associated research collaboration and option
In addition to announcing the discontinuation of GRN1005,
Geron said that it will be cutting down its workforce by 43
positions. The company expects to cut down its cash spend from
$65 million in 2012 to $33 million in 2013. This includes
restructuring costs of about $3 million and study discontinuation
costs of about $3 million. The company expects to exit 2012 with
cash and investments of about $90 million.
Geron also announced the departure of its Chief Financial
Officer, Graham Cooper, who will be replaced by Olivia Bloom, the
current Vice President of Finance, Chief Accounting Officer and
Treasurer, effective Dec 7.
The discontinuation of GRN1005 is a major setback for Geron.
Shares were down more than 20% on the news. This is the second
major pipeline setback for Geron in the last few months. Geron
suffered a huge setback earlier in September with the
discontinuation of its oncology candidate, imetelstat, for breast
cancer. Moreover, the company had said that the chances of moving
the candidate into phase III development for NSCLC are pretty
Given the imetelstat update, hopes were pinned on the
successful development of GRN1005. However, with GRN1005 also
disappointing, Geron now only has imetelstat to bank on. Geron
said that it intends to focus on the development of imetelstat
for hematologic myeloid malignancies and in patients with solid
tumors that have short telomeres.
The company will be reporting results on imetelstat from a
phase II study conducted in patients with essential
thrombocythemia on Dec 9. Although the company said that the data
is promising, we prefer remaining on the sidelines until we gain
more visibility on the late-stage development potential of
imetelstat. Meanwhile, we note that Geron has entered into a
non-binding letter of intent (LOI) with
) and BioTime`s subsidiary, BioTime Acquisition Corporation
(BAC), regarding Geron's stem cell program.
We currently have a Neutral recommendation on Geron, which
carries a Zacks #3 Rank (Hold).
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