Geron Corp. defies the challenges: Short sellers in the spotlight

Oncology remains a central and dynamic sector in the life sciences, as cancer is the second leading cause of death worldwide. With the rising incidence of cancer, as projected by the World Health Organization (WHO), there is increasing pressure on pharmaceutical and biotechnology companies to develop advanced therapies to address this growing health problem. Traditional cancer therapy, which aims to slow down cell replication or destroy cancer cells faster than healthy cells, is increasingly being complemented by innovative methods. These include the modification of immune cells, the use of mRNA technologies, and early detection through simple blood tests. Despite the promising developments, global oncology remains an expensive field with projected expenditures exceeding $250 billion this year. Special attention is currently being given to Geron Corp. and its recently approved drug Rytelo, a telomerase inhibitor for the treatment of transfusion-dependent anemia patients with low-risk myelodysplastic syndromes (LR-MDS). Introduced only in June 2024, Rytelo has the potential to become a blockbuster drug, especially as alternative treatment options are limited and there are over 15,000 eligible patients in the U.S. Analysts from Leerink Partners have issued an Outperform rating and set a price target of $7, indicating potential peak sales of approximately $1.4 billion in the U.S. Despite substantial short interest, Geron Corp. demonstrates a strong commercial presence and anticipates national reimbursement by the first quarter of 2025. With solid financial reserves of $430 million and projected operating expenses between $270 million and $280 million in 2024, Geron remains attractive to many investors. Notably, 26 hedge funds, including Darwin Global Management, hold significant stakes in the company. While Geron Corp. ranks 10th on our list of the most shorted cancer stocks, interest in this stock remains high for good reason. However, the growing sector of artificial intelligence also offers attractive investment opportunities. Investors might benefit from lesser-known AI stocks that are trading at favorable valuations.