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On Wednesday, H.C. Wainwright maintained a Neutral rating on Geron Corporation (NASDAQ:GERN) following the recent approval of its drug Rytelo by the European Commission. According to InvestingPro data, while Geron maintains a strong financial position with more cash than debt and a healthy current ratio of 5.56, the company faces challenges with rapid cash burn and weak profit margins. The approval, which came as expected in the first half of 2025, allows Rytelo to be used in the treatment of certain patients with myelodysplastic syndrome (MDS) in Europe. This marks Rytelo as the first and only telomerase inhibitor to be approved for use in both the United States and the European Union.
The European Commission’s authorization permits the use of Rytelo for treating patients with transfusion-dependent anemia due to low-risk MDS who are either ineligible for erythropoiesis-stimulating agents (ESAs) or have not responded to these agents. Geron is gearing up for the commercial launch of Rytelo, with initial focus on Germany and France, followed by Spain and Italy, aiming for a market introduction in 2026. The company’s stock, currently trading near $1.60, has experienced significant pressure, falling over 64% in the past six months, though InvestingPro analysis suggests the stock is currently undervalued.
Despite the positive development, H.C. Wainwright analysts do not view the European approval as a significant catalyst for Geron’s stock. They point out that the EU launch process involves extensive efforts in patient access, pricing, reimbursement, and valuation. Moreover, the EU approval had been anticipated, and the firm had already predicted a likely launch in 2026 based on previous guidance from the company.
The analysts are currently more interested in the progress of Rytelo’s launch in the U.S., especially after Geron’s fourth-quarter 2024 earnings call indicated flat revenues. The recent regulatory milestone in Europe does not alter H.C. Wainwright’s investment thesis for Geron, and the firm has chosen to maintain its Neutral stance on the company’s shares.
In other recent news, Geron Corporation announced that the European Commission has approved its drug RYTELO® for certain cases of myelodysplastic syndromes (MDS), making it the only telomerase inhibitor authorized in both the U.S. and Europe. This development follows the company’s earlier FDA approval and is supported by Phase 3 clinical trial results, which showed a reduction in red blood cell transfusion dependency. Geron reported $47.5 million in net product revenue for the fourth quarter of 2024, exceeding internal estimates, but noted a slowdown in the drug’s market uptake. In leadership news, Geron appointed Dawn C. Bir as Interim President and CEO following the departure of Dr. John A. Scarlett, with Elizabeth G. O’Farrell stepping in as Chair of the Board. Stifel analysts have lowered their price target for Geron to $4 from $8, maintaining a Buy rating but noting concerns over flattening sales. Similarly, Scotiabank (TSX:BNS) adjusted their price target to $4 from $6, retaining a Sector Outperform rating despite concerns over the drug Rytelo’s launch momentum. The company’s strategic direction and leadership changes are under close watch by investors and stakeholders.
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