Keep an Eye on Geron, Novartis, Cell Therapeutics, and Verastem Today


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Good morning, fellow Foolish investors! Let's take a look at four stocks -- Geron , Novartis , Cell Therapeutics , and Verastem -- that could loom large in health care headlines today.

Geron and Novartis provide updates regarding myelofibrosis treatments
Today's first two stories to follow both involve treatments for myelofibrosis, a bone marrow disorder that interferes with the body's natural ability to produce blood cells.

Geron's imetelstat is a first-in-class telomerase inhibitor that was originally developed as a treatment for breast and lung cancers. Telomerase is an enzyme that provides cells with the ability for limitless replication, so inhibiting it could theoretically stop the rapid spread of cancer cells. However, imetelstat was halted for both applications last year, and Geron went back to drawing board to pursue the myelofibrosis indication instead.

Geron rallied in August, after the company stated that it had expanded enrollment in a small clinical trial at Mayo Clinic to test imetelstat as a treatment for myelofibrosis. The good news continued last week, when Geron stated that five of the 22 patients in the Mayo Clinic study achieved partial or complete remissions, and 40.9% responded to the therapy.

Today, shares of Geron could keep climbing after it presented a more complete presentation on the closely watched myelofibrosis results yesterday. Investors were pleased by the report, and shares are up over 10% in pre-market trading this morning.

Meanwhile, Novartis also reported improved overall survival in patients with myelofibrosis treated with Jakavi in four long-term phase 3 studies. Jakavi (known as Jakafi in the U.S.) was approved in the U.S. and Europe for myelofibrosis in 2011 and 2012, respectively. The two phase 3 studies found that Jakavi reduced the risk of death and maintained spleen reductions for three years, and a separate study showed that it could increase the probability of 10-year survival by more than 50% when compared to conventional therapies.

This good news could also help lift shares of Incyte , which originally developed the drug. Under the collaborative agreement, Incyte retains the marketing rights to Jakavi/Jakafi within the U.S., while Novartis markets the drug overseas.

Cell Therapeutics announces positive phase 2 data for tosedostat
Cell Therapeutics could also move higher this morning, after announcing positive interim data from a phase 2 trial of tosedostat, a first-line treatment for acute myeloid leukemia (AML) and high-risk myelodysplastic syndrome (MDS). Tosedostat is an oral drug that selectively inhibits aminopeptidases, which often provide tumor cells with essential amino acids for growth and survival.

The trial tested tosedostat in combination with either cytarabine, an AML drug, or decitabine, a MDS drug. Fourteen out 26 patients, with a median age of 69, showed either a complete response or a complete response with an incomplete blood count recovery. The median overall survival rate came in at roughly 12 months for both AML and MDS groups. The most common side effects included febrile neutropenia in 50% of patients, pulmonary infections in 31%, and sepsis in another 19%.

Although this is a positive development for Cell Therapeutics, tosedostat is not the company's most important drug. Cell Therapeutics currently has one marketed product, Pixuvri, a treatment for relapsed or refractory aggressive non-Hodgkin's lymphoma (NHL), which was granted conditional approval in the EU in May 2012. Last quarter, sales of Pixuvri only came in at $0.4 million, but could eventually achieve annual peak sales of $240 million -- which would be a major boost for a company with a market cap of $236 million.

Verastem initiates a phase 1 trial for VS-5584
Last but not least, Verastem, a company focused on treating cancer with treatments that target cancer stem cells, initiated a phase 1 trial of VS-5584, a dual mTORC1/2 and PI3K inhibitor that treats advanced solid tumors or lymphoma.

mTORC (mammalian/mechanistic target of rapamycin) is a group of proteins which regulates cell growth, proliferation, and survival. PI3K is a group of enzymes which are also involved in many of the same functions. The theory behind both of these inhibitors is that new treatments can selectively shut off these proteins, crippling the ability of cancer cells to spread and survive.

In addition to VS-5584, Verastem has two other promising products, VS-6063 and VS-4178, which focus on another protein, FAK, which has also been implicated in assisting cancer cell proliferation, survival, and metastasis.

Verastem's pipeline. Source: Company website.

Although shares of Verastem have climbed more than 66% over the past 12 months, the company does not have any stable source of top or bottom line growth, and has only one major collaboration with Japanese pharmaceutical company Eisai. Therefore, investors should approach this stock with caution.

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