Geron (GERN) Q1 Earnings: What's In Store For The Stock?

Geron Corporation (NASDAQ:GERN) is expected to report first-quarter 2017 results on May 4.

In the last reported quarter, the company recorded a positive earnings surprise of 16.67%. Let’s see how things are shaping up for the upcoming announcement.

Geron’s shares outperformed the Zacks classified Medical - Biomedical and Genetics industry by adding 23.7% so far this year, while the industry witnessed a gain of 5.0%.

Imetelstat Remains in Focus

With no approved product in its portfolio, Geron’s top line solely comprises license fees and royalties. In such a scenario, investor focus will remain on the company’s pipeline. Geron currently has one candidate in its pipeline, imetelstat. It is being developed in collaboration with Johnson & Johnson’s (NYSE:JNJ) Janssen Biotech for the treatment of hematologic myeloid malignancies like myelofibrosis (MF), myelodysplastic syndromes (MDS) and acute myelogenous leukemia (AML).

Last month, Geron provided a positive update on two late-stage studies for imetelstat, its lead pipeline – IMbark (phase II) for the treatment of myelofibrosis, and IMerge (phase II/III) for the treatment of myelodysplastic syndromes.

Geron informed that Janssen has completed the second internal data review of two studies, IMbark (phase II for the treatment of MF) and IMerge (phase II/III for the treatment of MDS), on imetelstat. Janssen said that the benefit/risk profile of imetelstat in the treated patients supports continued development in lower risk MDS indication.

For IMbark, the recent results suggest that the clinical benefit and a potential overall survival benefit observed supports continuation of the trial without modifications. The trial that assesses the safety and efficacy of imetelstat treatment in relapsed or refractory MDS will also include an assessment of overall survival. Also, the data suggest that 9.4 mg/kg is an appropriate starting dose in the study.

Janssen will take a decision regarding the commencement of the phase III stage of the IMerge study later this year and a decision regarding the continued development of imetelstat for the relapsed or refractory MF indication next year.

We expect the company to shed light on the path forward for imetelstat development program at the first quarter conference call.

Surprise History

Geron’s performance over the last four quarters has been mixed, with the company surpassing expectations thrice and meeting the same once. The average positive surprise over the last four quarters is 27.98%.

Earnings Whispers

Our proven model does not conclusively show that Geron is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 5 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although Geron’s Zacks Rank #2 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult this quarter.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are a couple of health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Proteostasis Therapeutics, Inc. (NASDAQ:PTI) is expected to release results on May 12. The company has an Earnings ESP of +5.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead Sciences, Inc. (NASDAQ:GILD) has an Earnings ESP of +2.77% and a Zacks Rank #3. The company is scheduled to release results on May 2.

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