Very good news for Geron stock price: now what?

on Jun 7, 2024
  • Geron Corporation shares surged by over 20% on Friday.
  • The company received an FDA approval for its RYTELO product.
  • Geron is still studying more drugs that could receive approval soon.

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Geron Corporation (NASDAQ: GERN) stock price went vertical on Friday as investors cheered the latest actions by the Food and Drug Administration (FDA). After closing at $3.90 on Thursday, the stock surged by more than 20% to over $4.66, as we predicted in 2023.

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Fda approves RYTELO

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Geron Corporation’s stock price has been one of the best-performing companies in Wall Street this year. Before the current surge, the stock was already up by over 137% from its lowest point this year. 

This rally happened as investors remained optimistic that the FDA would approve RYTELO, its main drug. In a statement on Friday, the company said that the FDA had approved the drug for the treatment of adult patients with low- to intermediate-1 risk myelodysplastic syndromes (MDS). In a statement, John Scarlett, the company’s CEO said:

“The approval of RYTELO as the first telomerase inhibitor is a testament to the power of our science and the passion of our people to innovate in the field of blood cancer.”

This approval opens the door for the company’s commercialisation, which is set to start as soon as possible. The company has already hired its sales team and created supply chains to market the drug in the US. 

Further, the company is set to take market share considering that the drug has a ready patent and orphan drug exclusivity until 2031 with an extension period into 2037.

Most importantly, the company will do all this without needing to raise additional capital. It ended the last quarter with over $465 million in cash and marketable securities. Its operating expenses during the first quarter stood at $56 million.

Its range of operating expenses for the year ranges between $270 million and $280 million. The company believes that these funds are enough to last it through the second quarter of 2026.

This approval also opens the possibility that Geron Corporation could become a takeover target by one of the biggest companies in the cancer treatment industry. Some of the potential buyers are companies like Roche, Novartis, Merck & Co, and Bristol Myers Squibb. 

It would make a good acquisition because of its pipeline. It has six more drugs at various stages of development. ImpactMF, a telomerase inhibitor, has moved to the third trial phase while ImproveMF is in the second phase.

Geron Corporation stock price forecast

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GERN chart by TradingView

The daily chart shows that the GERN share price has been in a strong bull run in the past few months. This rally accelerated on Friday after the FDA’s drug approval. It moved above the crucial resistance level at $4.30, its highest swing on April 29th. Moving above that level invalidated the bearish double-top pattern that has been forming. 

The stock has remained above the 50-day and 100-day Exponential Moving Averages (EMA) while oscilatosrs have pointed upwards. Therefore, the stock will likely remain at an elevated level in the coming months. If this happens, it could surge to over $6. 

The risk to remember is that we could see a situation known as buy the rumour, sell the news. That is where the stock rises after the news and then suffers a harsh reversal after a few days.

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