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Geron Corporation (NASDAQ:GERN) has continually upset investors, with the latest disappointing news being modifications done to the underway IMbark study. Management witnessed promising trends in the high dosage arm of the IBark study, as well as data steady with the positive pilot trial report in MDS in the IMerge study. The company will discontinue the low dosage arm following lack of activity. Johnson & Johnson (NYSE:JNJ) stands to compensate the firm $900 million in royalties and milestones on revenues, and would be better worked to buy Geron, keeping the positive for itself.

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The highlights

Geron is a speculative buy, and it should be an investment choice only if investor has holdings of more stable biotech firms. The company closed a global collaboration deal with Johnson & Johnson in 2014 for advancing and commercializing imetelstat. Since the signing of the deal, instead of sustained profits investors have been trapped in limbo, facing lot of uncertainty when share prices jumped following early stage information was issued in the “New England Journal of Medicine” and acquisition reports. Also, the stock had hit lows when lesser levels of activity were seen in the low dosage arm of an underway study.

Geron has a market cap of around $305 million, with cash and equivalents in the second quarter posted at $136.4 million. The net loss in 2Q2016 came at $8.6 million, with research and development costs of $4.6 million and operating expenses of $9.1 million. Depending on the existing cash utilization rate, the firm might need additional funding by 2018, which gives them adequate time to focus on getting a return for investors. If potential breakthrough payments are accounted, the cash runway extends significantly.

In July, 2016 the firm obtained 3 U.S. patents for lead cure imetelstat, possibly extending the medication’s protection actually until 2033. Another vital patent was allotted in September.

Shareholders would do well to recollect that just recently the firm reported a license agreement with Johnson and Johnson. It granted them worldwide rights to dedicated oligonucleotide backbone chemistry. For this, the company obtained upfront payment of a $5 million, and also it is being eligible for $75 million in breakthrough payments.

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