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What's in the Cards for Geron (GERN) this Earnings Season?

Geron Corporation GERN is scheduled to report third-quarter 2017 results on Nov 1 after market closes.

In the last reported quarter, the company delivered a positive earnings surprise of 20%.

Geron’s shares have underperformed the industry so far this year. The stock has lost 1.4% while the industry witnessed a gain of 3.7% in the said time frame.

Pipeline Remains in Focus

Geron’s revenues solely comprise license fees and royalties as it has no approved product in its portfolio. Moreover, it has only one candidate in its pipeline, imetelstat. Hence, investor focus will remain on any updates related to it.

Geron is developing imetelstat in collaboration with Johnson & Johnson’s JNJ for treating patients with hematologic myeloid malignancies like myelofibrosis ("MF"), myelodysplastic syndromes ("MDS") and acute myelogenous leukemia ("AML").

Two late-stage studies for imetelstat are ongoing – IMbark (phase II) for the treatment of MF, and IMerge (phase II/III) for the treatment of MDS.

Following second internal review of data from IMbark and IMerge in April by J&J the studies continued unmodified. Part 1 of IMerge will enroll 20 more patients in fourth quarter in refined MDS indication to confirm the clinical benefit and safety observed earlier.

Janssen will decide on continuation of the part 2 of IMerge based on ongoing FDA interactions on data package and proposed refinements to the trial design submitted in April and data from expanded part 1.

For IMbark, the results suggested that the clinical benefit and a potential overall survival benefit observed supports continuation of the trial without modifications. Janssen is expected to evaluate maturing data from the IMbark study during next year, including an assessment of overall survival.An internal review of the data is expected in the first quarter of 2018. However, the continuation of the study will depend on a protocol-specified primary analysis, which will be done in the third quarter of 2018 or on reaching a pre-specified number of deaths.

We expect the company to provide an update on the path forward for imetelstat development at the third 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 25.84%.

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 #3 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.

Clovis Oncology, Inc. CLVS is scheduled to release results on Nov 1 after market close. The company has an Earnings ESP of +2.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exact Sciences Corporation EXAS has an Earnings ESP of +7.1% and a Zacks Rank #2. The company is scheduled to release results on Oct 30.

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Johnson & Johnson (JNJ): Free Stock Analysis Report
 
Geron Corporation (GERN): Free Stock Analysis Report
 
Clovis Oncology, Inc. (CLVS): Free Stock Analysis Report
 
Exact Sciences Corporation (EXAS): Free Stock Analysis Report
 
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