Geron Corp. (NASDAQ: GERN) is getting a reality check on Wednesday. After a recovery from years of disappointment, this is starting to feel again like the Geron that everyone knew before.

Wednesday’s drop is by more than half after the company issued a press release saying that it has received verbal notice from the U.S. Food and Drug Administration (FDA) has placed a full clinical hold on Geron’s Investigational New Drug application for imetelstat.

The hold was said to be due to the occurrence of persistent low-grade liver function test abnormalities observed in the Phase 2 study of imetelstat in ET/PV patients, as well as the potential risk of chronic liver injury following long-term exposure to imetelstat.

A full clinical hold is an order that the FDA issues to a trial sponsor to suspend an ongoing clinical trial or delay a proposed trial. The hold impacts all ongoing company-sponsored clinical trials.

Geron said:

The clinical hold affects the remaining eight patients in the company’s Phase 2 study in essential thrombocythemia (ET) or polycythemia vera (PV) and the remaining two patients in the company`s Phase 2 study in multiple myeloma. In addition, the company`s planned Phase 2 clinical trial in myelofibrosis will likely be delayed due to the clinical hold. It is possible that other studies using imetelstat, such as ongoing investigator-sponsored trials, may also be placed on clinical hold by the FDA.

Geron’s market cap prior to this news was $567 million, but shares are indicated sharply lower — some 61% — at $1.72 after closing at $4.40 on Tuesday. Geron’s 52-week trading range is $0.98 to $7.79.

Geron trades an average of about 4.6 million shares per day. It seems safe to assume that this share volume will be far higher on Wednesday.

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