On Monday, Stifel has increased the price target for Geron (NASDAQ:GERN) Corporation (NASDAQ:GERN) shares to $7.00, up from the previous target of $6.00, while reiterating a Buy rating on the stock. The adjustment follows the U.S. Food and Drug Administration's (FDA) approval of Geron's drug Rytelo, which was granted a favorable product label.
Additionally, Geron disclosed the drug's monthly pricing, which is approximately 15% higher than the prior estimate of around $26,000 per month that was used in Stifel's financial model.
The analyst from Stifel noted that the updated financial model now includes revised sales estimates for Rytelo starting from the fiscal year 2024 onward. The new price estimate of roughly $30,000 per month takes into account various factors, such as the frequency of dose modifications, weight-based dosing, and the anticipated introduction of a lower dosage strength of the drug.
Despite potential debates over the pricing estimates and other model inputs, the firm believes that their projections, including the estimated eight months of therapy duration, are likely on the conservative side.
The analyst also mentioned that while upcoming competitive updates, such as KROS's Phase 2 elritercept update at the European Hematology Association (EHA) meeting, should be observed, the data from Geron's IMerge trial sets a substantial competitive bar. The firm maintains a positive outlook on Geron, citing the company's strategic relevance and potential for significant revenue growth.
Geron's Rytelo has been approved for the treatment of lower risk myelodysplastic syndromes (LR-MDS), a group of blood disorders. The approval and subsequent pricing strategy are expected to play a crucial role in the company's future financial performance.
In other recent news, Geron Corporation has been making significant strides in the pharmaceutical sector. The U.S. Food and Drug Administration (FDA) recently approved Geron's new injectable drug, Rytelo, for the treatment of transfusion-dependent anemia in patients with lower-risk myelodysplastic syndromes (MDS).
This marks Geron's first FDA approval, positioning Rytelo as a competitor to Bristol Myers (NYSE:BMY) Squibb's Reblozyl. Analysts from Baird and B. Riley Securities have projected Rytelo's sales to reach $933 million and $700 million respectively by 2029.
TD Cowen reaffirmed its confidence in Geron, maintaining a Buy rating and a $10.00 price target for the company's stock. This endorsement follows the FDA's approval of Rytelo, which notably did not include a black box warning for cytopenias, suggesting a favorable risk-benefit profile for the drug.
Furthermore, Geron reported a positive outlook in its Q1 2024 earnings call, focusing on the upcoming U.S. launch of another novel drug, Imetelstat. Geron holds $465 million in resources and plans for sustained operations through projected sales until Q2 2026. The company is also progressing in a Phase 3 trial for Imetelstat in myelofibrosis, with key analyses due in the coming years.
InvestingPro Insights
In light of Stifel's updated price target and optimistic outlook on Geron Corporation (NASDAQ:GERN), InvestingPro data provides additional context for investors considering the stock. Geron's market capitalization stands at $2.72 billion, reflecting investor confidence despite a negative P/E ratio of -13.53. The company's Price / Book ratio, as of the last twelve months leading up to Q1 2024, is high at 7.89, which could suggest that the stock is trading at a premium relative to its book value.
InvestingPro Tips highlight that Geron holds more cash than debt on its balance sheet and analysts are expecting sales growth in the current year, which aligns with the positive sentiment surrounding the FDA approval of Rytelo. Moreover, two analysts have revised their earnings upwards for the upcoming period, indicating a potential upside. However, it's worth noting that the stock is considered to be in overbought territory based on the RSI, and analysts do not anticipate the company will be profitable this year. For investors seeking a deeper analysis, there are additional InvestingPro Tips available at: https://www.investing.com/pro/GERN.
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