Geron Loss In-Line with Estimates

Geron Corporation (GERN - Analyst Report) posted a net loss of 17 cents per share in the second quarter of 2011, in line with the Zacks Consensus Estimate and narrower than the year-ago loss of 18 cents. Second quarter revenues of $462,000 were below the Zacks Consensus Estimate of $1 million and the year-ago revenues of $1 million.

Quarter in Detail

Revenues consisted of $150,000 in revenues from collaborative agreements and $312,000 in the form of royalties and license fees. Geron has several license agreements with various oncology, diagnostics, research tools, agriculture and biologics production companies.

Total operating expenses were $21.9 million, 22.4% above the year-ago period. Research and development expenses increased 23.6% to $16.5 million.

Imetelstat is currently in four phase II studies. While two large randomized phase II studies are evaluating imetelstat for the treatment of non-small cell lung cancer and metastatic breast cancer, two other studies are evaluating the candidate for multiple myeloma and essential thrombocythemia. Data from the lung and breast cancer studies could be available in 2012.

Research and development expenses should continue increasing with imetelstat being evaluated in four phase II studies. Moreover, Geron is looking to move GRN1005, which is being developed in collaboration with Angiochem Inc., into a phase II study in the fourth quarter of 2011. The study will be conducted in patients with brain metastases. Another phase II study, in patients with glioblastoma multiforme, will be conducted.

Meanwhile, general and administrative expenses increased 18.9% to $5.3 million.

Neutral on Geron

We believe Geron’s telomerase technology platform represents significant commercial opportunity. While we are impressed with Geron’s technology platforms, we note that the company remains several years from achieving profitability given the lack of any marketed product in its portfolio and the early stage nature of its pipeline. We remain Neutral on the stock.

Read the full analyst report on GERN