Shares of biopharmaceutical company Geron Corporation (NASDAQ:GERN) could double in just one year because of a number of catalysts. Analysts at MLV & Co. assessed the opportunities of Geron and concluded that the future of the company is bright. The strongest indications that Geron is poised for greatness can be seen in the company’s lead drug candidate known as imetelstat, a drug designed to combat myelofibrosis (MF) but could also do more.
The U.S. market for MF is more than $2 billion. Incyte Corporation (NASDAQ:INCY) has been at the forefront of MF treatment with its Jakafi drug, which is also market outside the U.S. as by NVS as Jakavi. According to MLV, there is a decent chance that Geron Corporation (NASDAQ:GERN) could overtake INCY in the U.S. MF market.
In a preliminary analysis of imetelstat, the drug candidate was found to reverse bone marrow fibrosis in 21% subjects that participated in the trial. Some 33 patients were enrolled for the study. The ability to reverse bone marrow fibrosis is an indication that imetelstat could be more successful in halting progression of MF compared to Jakafi, which is the standard care for MF currently. Instead of alleviating MF through bone marrow fibrosis reversal, Jakafi works by reducing the size of spleen.
A Phase 2 trial of imetelstat is expected to kick off later this year, in study that will seek to validate the ability of the drug to combat MF. Spearheading imetelstat’s Phase 2 trial is a unit of Johnson & Johnson (NYSE:JNJ) known as Janssen Biotech. The study, which could begin in mid-2015, is expected to play a key role in informing the clinical direction of imetelstat.
Beyond MF, imetelstat’s label could also expand to include treatment for acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS). Pursuing AML label for imetelstat is an option to Janssen, while Phase 2 trial of the drug for MDS is expected to begin before the end of 2015.
If all goes well with the trial of Geron Corporation (NASDAQ:GERN)’s imetelstat for MF, the drug could launch in the U.S. by 2022. If that happens, the drug could bring in more than $1.5 billion by 2028 in the U.S. alone. Extended label for AML or MDS could bring in another $1 billion in peak revenue each by 2028.
Based on the various catalysts in the company, MLV raised target price of the stock to $6 from $4.25 and maintained a “Buy” rating on it.
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