Here's why the telomerase gene discovery is so important for
Geron:
Geron has pretty much locked up the patents covering the use
of telomerase inhibitors to treat cancer. Cloning the crucial
telomerase gene means it's much more likely that an effective
inhibitor will be developed in the not-too-distant future.
In fact, Thomas Cech, the Nobel Prize winner and co-discoverer
of the telomerase gene, was quoted by the NY Times as saying:
"the search for a drug to test (to inhibit telomerase) would be
aided by the fact that drug companies already have a large number
of chemicals in their labs that in theory could interfere with
telomerase. For example, several drugs used to treat AIDS, like
AZT, should, even in their current formulation, inhibit
telomerase production."
Remember: even if Geron isn't the company that comes up with
an anti-cancer telomerase inhibitor drug, they will make multi-
millions anyway because they hold the critical patents.
Of course, it's not certain anyone will be able to develop an
effective telomerase inhibitor that will kill cancer cells. But
quite a few Nobel Prize winners (including James Watson, who's on
Geron's medical advisory board) think there's an excellent chance
it's possible. And so does Pharmacia & Upjohn, Geron's large
pharmaceutical partner. It's a reasonable assumption that P&U did
their due diligence before they signed a $58 million
collaborative agreement with Geron.
The majority of the recent posts on this thread have been from
short-term traders looking to make a quick buck. There's nothing
wrong with short-term trading, but if you're a long-term biotech
investor and you can take some near-term volatility, Geron is
worth considering for your biotech portfolio.
So, what's Geron stock worth? Biotech "guru" Michael Murphy
considers Geron a core biotech holding, with a long-term target
of $45. As part of their collaborative agreement with Geron, P&U
purchased $2 million worth of Geron stock at $20 per share (and
this was before the telomerase gene discovery).
Biotech stocks are obviously hard to value, but in my view
Geron's risk/reward ratio seems quite attractive at under the
price P&U paid. |
