Investing.com -- Shares of Geron Corp (NASDAQ: NASDAQ: GERN ) plummeted 30% following the company's release of fourth-quarter earnings that failed to meet analyst expectations and its guidance that left investors wanting. The biopharmaceutical company's earnings per share (EPS) for the quarter was reported at ($0.04), which was $0.01 short of the consensus estimate of ($0.03). Moreover, Geron's quarterly revenue was $47.54 million, significantly lower than the anticipated $61.93 million.
The company, known for its work in blood cancer treatments, expressed optimism about its first-in-class telomerase inhibitor, RYTELO, and its potential in the lower-risk myelodysplastic syndromes (MDS) patient population. Despite the positive outlook portrayed by CEO John A. Scarlett, the market reacted sharply to the lower-than-expected revenue and the cautious tone regarding the recent performance of RYTELO.
Geron ended 2024 with a strong cash position and reported that revenues for the third and fourth quarters exceeded expectations. The company's net product revenue for RYTELO reached $47.5 million in the fourth quarter and $76.5 million since its launch at the end of June 2024, following FDA approval. However, these figures were not enough to assuage investor concerns, as the stock experienced a significant drop in value.
According to Stifel analyst Stephen Willey, "GERN shares are indicating ~25-30% down pre-open following some cautious management commentary on its 4Q24 earnings call re: the observed trajectory of flattening new Rytelo patient starts over the past few months – a trend which has been suggested by third-party vendor prescription data (for which capture rate precision remains a work-in-progress) and has driven recent weakness in shares." Willey's comments underscore the market's reaction to the company's performance and the challenges it faces in increasing physician education and changing prescribing behaviors.
In terms of expenses, Geron's total operating expenses for the fourth quarter were $67.6 million, with research and development costs decreasing due to capitalized manufacturing and quality costs following RYTELO's approval. Selling, general, and administrative expenses increased due to the commercial launch of RYTELO in the U.S.
For fiscal year 2025, Geron expects operating expenses to range from approximately $270 million to $285 million. The company anticipates reaching profitability without the need for additional financing if its internal sales and operating expense expectations are met. Geron believes its existing cash, cash equivalents, and marketable securities, combined with anticipated net revenues from U.S. sales of RYTELO, will be sufficient to fund operations for the foreseeable future.
The stock's downturn reflects investor sentiment that is currently cautious due to the slower-than-expected uptake of new RYTELO patient starts and the company's strategies to improve its market penetration.
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