Geron Corp. (NASDAQ: GERN) shares were absolutely crushed on Thursday morning after it was announced that Janssen Biotech, a subsidiary of Johnson & Johnson (NYSE: JNJ), has terminated the 2014 collaboration and license agreement (CLA) with the firm.
Janssen stated that it made this decision as the result of a strategic portfolio evaluation and prioritization of assets within their portfolio. As a result, Geron has regained the global rights to develop and commercialize imetelstat.
Under the terms of the CLA:
The effective date of the termination is September 28, 2018, after which the licensed rights to the imetelstat program, including intellectual property rights generated under the collaboration, return to Geron without any continuing economic obligations to Janssen, and Janssen has no further obligations to fund any of the current ongoing imetelstat clinical trials.
The transition of the imetelstat program to Geron is expected to take place over the next year with operational support from Janssen, including the orderly transfer of all ongoing clinical, regulatory, medical affairs, manufacturing and preclinical activities to Geron. Also Janssen is expected to supply imetelstat to Geron for up to 24 months during a transition period for clinical manufacturing.
John A. Scarlett, M.D., Geron’s president and CEO, commented:
We are grateful for the collaboration with Janssen, who successfully managed two Phase 2 trials of imetelstat. We believe the clinical results from IMbark provide valuable insights into the potential future development of imetelstat for an underserved relapsed and refractory myelofibrosis patient population. We also believe the combined data of 38 patients from the initial and expansion cohorts for the target patient population from the Phase 2 portion of IMerge support further development of imetelstat, and we are therefore prioritizing the initiation of the Phase 3 portion of IMerge.
As a result, the company revised its financial projections and now expects 2018 operating expenses to be about $37 million (previously $30 million). As of August 31, 2018, the company had roughly $183 million in cash and marketable securities, which is expected to be sufficient to support its plans to initiate the Phase 3 portion of IMerge in 2019.
Following the announcement, the stock was down more than 70% to $1.85 in early trading Thursday. The consensus analyst price target was $5.75, and the new 52-week range is $1.50 to $6.99.
24/7 Wall St.It’s Your Money, Your Future—Own It (sponsor)
Retirement can be daunting, but it doesn’t need to be.
Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.