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The markets bet on a Geron buyout

This morning’s 20% climb in Geron shares seems surprising given that the innocuous nature of the US adcom over the group’s myelodysplastic syndromes drug imetelstat made approval a virtual certainty. That green light came yesterday, and the drug has been trademarked Rytelo. The idea that Geron is now a takeover candidate is likely driving the stock – a thesis supported by Rytelo’s broad and clean label. Last month B Riley analysts wrote that “Geron seems to tick all the boxes in the takeover candidate checklist”, but risks included a boxed warning or restriction in the target market. Neither fear has materialised, and the approved use, backed by the Imerge trial, is low to intermediate-risk MDS patients who are transfusion-dependent and ineligible for or unresponsive to erythropoiesis-stimulating agents, with no restriction as to presence of ringed sideroblasts. Rytelo will reportedly cost $9,884 per 188mg vial, putting the annual cost at nearly $300,000, versus the US watchdog ICER's recent suggestion of $119,000 a year. The company says its key market is community doctors, with Medicare as the predominant payer, and will initially target 8,000 healthcare professionals, but a solo launch without the muscle of a bigger partner will be fraught with difficulties.

This story has been updated.


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