Geron Corporation GERN reported a loss of 5 cents per share in the second quarter of 2015, unchanged from the year-ago period but narrower than the Zacks Consensus Estimate of a loss of 6 cents per share.
Total revenues declined 26.4% to $0.3 million in the second quarter of 2015. Revenues consisted entirely of license fees and royalties.
The Quarter in Detail
Research and development (R&D) expenses declined 7.7% to $4.8 million reflecting the impact of lower personnel-related and other research costs resulting from the organizational resizing. We remind investors that in March, Geron had announced a restructuring plan under which the company reduced its workforce from 39 to 21.
This was partially offset by increased costs for the development of imetelstat in collaboration with Johnson & Johnson JNJ for hematologic myeloid malignancies. Geron expects R&D expenses to increase during the remainder of the year as the development of imetelstat continues in collaboration with Johnson & Johnson.
A phase II study (IMbark) on imetelstat commenced in Jul 2015 – two doses of imetelstat will be evaluated in patients with DIPSS intermediate-2 or high-risk myelofibrosis who have relapsed after or are refractory to a JAK inhibitor. Another study will be conducted in myelodysplastic syndrome.
General and administrative expenses increased 3.2% to $4 million mainly due to higher non-cash stock-based compensation expense and consulting costs associated with business development activities to identify potential new product candidates.
Geron is a Zacks Rank #3 (Hold) stock. We are positive on the company's agreement with Johnson & Johnson which provides it with a strong partner as well as funds. The company’s growth prospects currently depend entirely on the successful development of imetelstat which is its sole pipeline candidate. We expect investor focus to remain on imetelstat and business development updates.
Some better-ranked stocks in the health care sector include Gilead Sciences, Inc. GILD and Actelion Ltd. ALIOF. Both are Zacks Rank #1 (Strong Buy) stocks.
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