- Johnson & Johnson's Janssen Biotech will end a development and licensing deal Friday that had a potential value of nearly $1 billion for Geron's imetelstat, a cancer drug once viewed as a potential blockbuster.
- Geron's CEO John Scarlett said his company will forge ahead without the pharmaceutical giant, continuing multiple clinical trials of the telomerase inhibitor. The biotech expects to start a Phase 3 study in mid-2019. Both drugmakers announced the deal's termination Thursday morning.
- Investors in Geron appeared to jump ship with Janssen, as Geron's share price was down 71% on market open.
J&J and Geron began collaborating on imetelstat back in December 2014, when Janssen paid the Menlo Park, California-based biotech $35 million upfront.
The partnership gave the J&J subsidiary global rights for development and commercialization of imetelstat.
Costs for Phase 2 testing in myelodysplastic syndrome (MDS) and myelofibrosis (MF) were evenly split in the deal, which had a potential value of up to $935 million with development and commercial milestone payments.
But Janssen was seeking a blockbuster drug in imetelstat that could accrue significant revenue, George Zavoico, a senior equity analyst at B. Riley FBR, said in an interview with BioPharma Dive.
Over recent years, the markets for MDS and MF have become more fragmented with differentiation for chromosomal abnormalities and risk levels. From Janssen's perspective, the smaller market share led to a decision that additional investment was no longer worth the potential return, Zavoico noted.
"They don't think it's going to be a blockbuster anymore," he said.
But while Janssen is out, Geron, as a small biotech, doesn't need a blockbuster, added Zavoico, who gave a rough ballpark estimate of around $100 million to $150 million to develop the drug. Geron has little choice but to plow ahead. Imetelstat is its only product candidate.
The company stated on September 27 it had $183 million in cash and marketable securities at the end of August, which it anticipates will be sufficient to support its plan to start a Phase 3 trial next year. In its most recent annual filing, Geron reported it had 15 full-time and three part-time employees. Only two were involved with R&D.
With Janssen and its financial support stepping out, Geron bumped up its 2018 financial projections for operating expenses from $30 million to $37 million. The company did not venture far into details for next year.
"It's a bit too early to talk about guidance for 2019 at this point in time," Chief Financial Officer Olivia Bloom said on a Thursday call with investors. "I think we need to get a better feel about what the entire transition plan is going to be and the timing for that, as well was what's going to be involved for the start up for the study."
The company's most recent quarterly filing laid out the risk of Janssen's departure, noting it would severely harm the business and business prospects, and substantially delay or terminate development of imetelstat.
Geron's chief executive didn't shoot down the possibility of partnering with a company again in the future for imetelstat, but said the company is focused on "a plan to reassume full control."
"Right now, we're aimed at having full control of the product most of all," Scarlett said, "then speaking with other partners who might be interested, and I suspect many of them will be interested in ex-U.S. opportunities."
Geron plans to present trial data from its Phase 2 MDS study at the American Society of Hematology's conference this December.