Goldman believes that Geron, a biotech firm in late stages of development, was due for a corrective move and has now the potential to soar higher. Analyst Corinne Jenkins upgraded Geron from neutral to buy. She kept her $4 price target, which represents a 70.1% increase in the stock’s price from Monday. The analyst highlighted U.S. Food and Drug Administration acceptance of Geron’s new drug application for imetelstat, a treatment for individuals with transfusion-dependent anemia in lower-risk myelodysplastic syndromes, or MDS. FDA announced that a decision regarding the approval of the drug will be made by mid-June next year. This means the drug could launch in the U.S. at the end of 2024’s first half. Jenkins wrote that based on the FDA’s review of data, discussions with KOLs and regulatory precedents, they are still confident imetelstat will be approved for this situation, where they estimate $1.5 billion unadjusted in peak sales. We see the recent drop in the shares as an opportunity to buy the stock. Geron shares have been hit hard this year, with a drop of 27% this quarter and a 3.3% loss year-to date. Investors are upset that the FDA decided to review Geron’s MDS drug using its standard review process instead of priority review. According to the note regulators are also hosting a advisory committee meeting in conjunction with their review. This is adding to the negative sentiment. Jenkins stated that the meeting is “an opportunity to discuss any questions or problems, but it does not necessarily signal a negative approval.” Jenkins reiterated the firm’s belief in the approval of the drug. The analyst stated that despite the AdCom meeting, physicians we spoke to see a high probability of imetelstat’s approval based upon publicly available data. According to their opinion, the clinical benefit/risk is sufficient for approval, given the (i) efficacy of the drug, (ii), manageable safety (although not benign), and (iii), degree of unmet needs in this patient population. Michael Bloom, a CNBC reporter, contributed to this article.
