B.Riley cuts Geron stock price target to $3.50, maintains Buy

On Tuesday, B.Riley analyst Kalpit Patel revised the price target on Geron Corporation (NASDAQ:GERN) shares, lowering it to $3.50 from the previous $5.50, while continuing to endorse the stock with a Buy rating. Currently trading at $2.56, GERN maintains a strong Buy consensus among analysts, with targets ranging from $6 to $10. Patel’s reassessment follows a period where Geron’s stock has significantly underperformed compared to the broader biotech market, as measured by the XBI biotechnology index. According to InvestingPro, the stock’s RSI suggests it’s in oversold territory.

Geron’s shares have seen a decline of 33% over the past three months, with InvestingPro data showing a steep 43.11% drop over six months. This stands in stark contrast to the XBI’s modest 1% decrease. The underperformance is attributed to a combination of factors, including a leveling off of prescription growth and potentially diminishing merger and acquisition excitement within the sector. Despite these challenges, the company maintains a healthy balance sheet with more cash than debt and a current ratio of 2.89.

To gain a clearer picture of Geron’s market position and the reasons behind the prescription trends, B.Riley conducted a survey among 20 hematologists and oncologists based in the United States. The survey revealed that one in four of the medical professionals had not prescribed Geron’s drug Rytelo. Despite this, Patel believes that the insights gathered from the survey still provide a valuable perspective on the current prescribing behaviors and the uptake of the drug in real-world settings.

The analyst’s commentary points to the importance of third-party week-over-week prescription tracking services, which have indicated a recent flattening in the number of new prescriptions for Geron’s product. This data has been crucial in evaluating the company’s performance and understanding the challenges it faces in the market.

While the reduced price target reflects the recent underperformance and market challenges, the maintained Buy rating suggests that B.Riley still sees potential in Geron Corporation’s stock. The new price target of $3.50 represents B.Riley’s adjusted expectation for the stock’s value, taking into account the current market conditions and prescription trends. Based on InvestingPro’s comprehensive analysis, GERN appears fairly valued at current levels. Subscribers can access 8 additional ProTips and a detailed Pro Research Report, offering deeper insights into the company’s financial health and growth prospects.

In other recent news, Geron Corporation’s drug RYTELO, a treatment for certain blood cancers, is nearing approval in the European Union. The European Medicines Agency’s Committee for Medicinal Products for Human Use has recommended the drug’s approval, with the European Commission expected to make a final decision soon. RYTELO, if approved, would be the first telomerase inhibitor available in Europe for this indication. Clinical trials indicate that RYTELO reduces the need for red blood cell transfusions within the first 24 weeks of treatment.

Meanwhile, Stifel reaffirmed its Buy rating on Geron, following presentations at the American Society of Hematology meeting. The analysis underscored the drug’s potential value to prescribers, with positive feedback from key opinion leaders regarding the potential uptake and prescription of Imetelstat, marketed as RYTELO.

In addition, Geron revealed new data from the IMerge clinical trial, indicating that Imetelstat may be beneficial for patients with lower-risk myelodysplastic syndromes with transfusion-dependent anemia, regardless of their previous treatments. The safety profile of Imetelstat includes thrombocytopenia and neutropenia as the most common adverse reactions, with serious adverse reactions occurring in 32% of treated patients. These recent developments highlight Geron’s ongoing commitment to providing innovative treatments for blood cancers.

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