March 12, 2014 / 11:26 AM / 4 years ago

UPDATE 2-Geron says FDA halts testing of lead drug, shares slump

* FDA orders halt on concerns about liver damage

* Geron to give data on whether abnormalities reversible

* Shares fall as much as 68 pct (Adds analyst comment, conference call details; updates shares)

March 12 (Reuters) - Geron Corp said the U.S. Food and Drug Administration ordered to halt trials of its only remaining drug over concerns about liver damage, wiping out about two-thirds of the company’s value.

The cancer treatment, imetelstat, was touted as Geron’s savior after the company said in November that the drug had completely cured 22 percent of myelofibrosis patients in a trial.

Geron, which was once one of the leading firms in the race to develop the first commercial stem-cell therapy, divested its stem-cell assets last year after multiple disappointments to focus on the development of the cancer treatment.

The halt, verbally notified by the FDA, will affect all trials of the treatment, including the thrombocythemia and multiple myeloma mid-stage studies, Geron said.

Geron is working with the FDA to provide data on whether the liver function abnormalities found in the studies were reversible, the company said on a conference call.

The treatment’s tolerability was called into question in January after enrollment was stopped in an early-stage trial evaluating imetelstat’s use in a rare blood disorder, and about 20 out of 79 patients dropped out.

Geron did not then disclose why the patients dropped out, but said it would continue the study.

The company had earlier discontinued testing the drug for use in breast and lung cancer after trial failures.

The FDA’s decision bodes well for Incyte Corp, whose drug Jakafi is approved to treat myelofibrosis. The drug generated sales of $235.4 million in 2013.

Imetelstat’s safety signal did not come as a surprise, UBS analyst Roden said, as he had noted that imetelstat data had showed significant toxicity.

However, analysts said the drug’s ability to evoke a disease-modifying effect, defined as partial or complete remission, suggests it would be superior to Jakafi.

Imetelstat is designed to inhibit telomerase, an enzyme that enables the rapid multiplication of tumor cells.

“We continue to believe imetelstat is efficacious and disease modifying in myelofibrosis. However, we would remain on the sidelines at this time as Geron has no pipeline to fall back on should the FDA decide that imetelstat is simply unsafe,” Piper Jaffray analyst Charles Duncan said.

Abnormalities in liver function has doomed other drugs, including Gilead Sciences Inc’s experimental hepatitis C treatment, codenamed PSI-938.

Menlo Park, California-based Geron’s stock was down nearly 64 percent at $1.61 in late-morning trade. (Reporting by Natalie Grover and Chris Peters in Bangalore; Editing by Gopakumar Warrier and Sriraj Kalluvila)

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