Geron Corporation Inc. (GERN) Accused of Misleading Shareholders
According to the complaint for alleged violations of the Securities Exchange Act of 1934 between March 19, 2018 and September 26, 2018, Geron Corporation Inc. (GERN) was developing its drug imetelstat in partnership with Janssen Biotech Inc. This partnership was contingent upon the results of Geron’s clinical drug study of imetelstat, called the IMbark trial. For IMbark to succeed, the trial’s primary endpoints needed patients in the study to show at least 35% reduction on spleen volume and a minimum 50% reduction in Total Symptom Score (“TSS”). The actual results of the IMbark trial were disappointing and not even close to the results required for success, and IMbark was therefore determined a failure by a joint review committee consisting of Geron and Janssen employees. Despite these dismal results, in March 2018, Geron’s CEO instead touted the median overall survival of IMbark patients, failing to disclose the disappointing results of its primary endpoints and causing Geron’s stock to increase more than 28%. Then, on September 27, 2018, Geron finally admitted the failure of the IMbark trial and the consequent termination of its partnership with Janssen. On this news, the price of Geron’s stock plummeted 62% to close at $2.31 per share and has yet to recover.
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