In a way, John “Chip” Scarlett’s job since he became CEO of Geron last year has been to resist the allure of science.
Starting in the 1990’s, Geron (NASDAQ: GERN) had nurtured seminal work on human embryonic stem cells. When Scarlett took over in September 2011, the Menlo Park company had begun the world’s first clinical trial of a therapy based on those cells. But in an era of tight funding, the new CEO foresaw a lengthy and uncertain path to revenues. Less than two months after Scarlett took the helm, the company announced that it was discontinuing the stem cell program to focus on its two cancer drug candidates.
Scarlett says he doesn’t regret that decision, in spite of a recent flurry of data that eliminated one of Geron’s experimental oncology drugs, GRN1005, and may have narrowed the prospects of the remaining one, imetelstat. As Scarlett sees it, the imetelstat data helped to pinpoint the cancer types where the compound is most likely to succeed.
“I’m very pleased with the decision we made,’’ Scarlett says. “I think we have a potentially promising future with imetelstat.”
Imetelstat is the product of Geron’s longstanding look at those intriguing tag-ends of chromosomes called telomeres, which have been linked to cell longevity, aging and cancer. But it was the stem cell program that had made Geron a very well known, if not profitable company.
Scarlett wasn’t immune to the appeal of Geron’s stem cell work, which he calls “some of the most intriguing science I’ve seen in my 30-plus year career.” Geron coaxed versatile embryonic stem cells to develop into more specialized cells, such as those found in the heart and nervous system. In the hope that these cells could replace injured or diseased tissues, the company launched its first clinical trial in subjects with spinal cord injuries.
But development of that cutting edge treatment would have been expensive and risky—an opinion the CEO still holds.
“We ran a great risk of running out of money and having nothing,” Scarlett says. Geron, after spending many years on innovative science since its founding in 1990, needed to focus on returns to shareholders, the CEO says.
As drug development options in 2011, the company’s two cancer drug candidates held an important advantage over Geron’s experimental stem cell therapies. Whether the anti-cancer compounds failed or succeeded, Geron would know it more quickly, Scarlett contended. Trial data was expected in late 2012 and early 2013.
As it turned out, word came a bit early. It would redefine Geron’s focus again.
On September 10, Geron announced disappointing results for imetelstat in two Phase II trials. The company said it was halting the Phase II trial of the drug in breast cancer, and was not likely to move forward with a Phase III trial in lung cancer. Although other trials of imetelstat were ongoing, Geron’s shares dropped by nearly 56 percent to $1.28.
Then on Dec. 3, Geron reported early data on its second cancer drug candidate, GRN 1005, which was designed to help anti-cancer drugs penetrate the blood-brain barrier so they could attack tumor cells in the brain. Geron said it was discontinuing all work on the compound because trial subjects showed no intracranial responses in an interim analysis.
Scarlett says he appreciated the clever design of GRN 1005. The decision to scrap it was carefully considered. But the quick action meant the company didn’t “spend good money after bad,” he says.
The double dose of bad news was followed by more upbeat signs on Dec. 10, when interim trial data suggested that imetelstat might be an effective treatment in a family of blood diseases called hematological malignancies.
The drug was tested in subjects who had resisted other treatments for a blood disorder called essential thrombocythemia.
The first 14 subjects enrolled in the Phase II trial all responded with a drop in their abnormally high blood platelet counts. In 13 of those subjects, the platelet counts returned to normal levels, Scarlett says. The trial results also raised the possibility that … Next Page »