Yes, it is possible to hear good news from the biotech community. The problem is understanding what they say, why they’re saying it, and what they’re not saying. Geron (GERN) had some great news. Pardon me as I look up imetelstat and myelofibrosis, and add them to telomerase. Even if I know what they mean, I have to remember how to spell them. That simple dictionary act is enough to thwart legions of investors. A couple of decades ago I realized that such simple acts reveal an advantage that individual investors have over the institutions. Simple, but not too simple, is powerful – and reaches beyond stocks.
Geron is a bold company. They find the big medical problems that others are trying to treat with slight extrapolations of existing treatments, and decide to develop fundamentally different solutions. They attempt to skip the toxic cocktails and instead develop more systemic treatments. The drug that raised the stock was Imetelstat, a drug that inhibits the production of telomerase, and hopefully treats a blood disorder called myelofibrosis. Using smaller words takes more sentences, but it also leads to the reason for optimism. Geron is trying to take advantage of the fact that many cancers have the same thing in common: misbehaving cells. The cells don’t die the way they should. Geron and others hypothesize that is because the molecule that acts as a countdown timer, telomerase, doesn’t do its job right. Manage that molecule and manage the illness. The news suggested encouraging results for a blood disorder treatment. That’s great. What’s even more appealing is that, if this technique works for this disorder, it might work for others too. That’s why GERN has always been a high-visibility stock. They are very risky, but if they succeed they may succeed spectacularly. They’ve also tested my patience because I’ve held them for over 10 years (and sadly I sold half my position a few months ago because I had to.)
So, why doesn’t everyone jump up and cheer and rocket the stock? Because biotech is risky, the results are hard to interpret, the trials are expensive and take a long time, what works for a few patients may not uncover side effects within the larger patient population, and even if all that works the company has to clear the hurdles of FDA approval and successfully marketing the treatment. But maybe they’ll succeed.
But surely, if a revolutionary treatment succeeds far better than the competition it is bound to succeed financially, right? Nope.
Dendreon has been called, “the largest marketing failure of the most successful company“. If Geron uses leading edge technology, Dendreon is at least close enough to peek over the edge. Dendreon developed a cancer vaccine. That’s sounds simple, but think of it. Compare a vaccine to chemo and radiation. Dendreon managed to develop a treatment that helped the body combat its cancer with its own immune system. The side effects of chemo and radiation are enough to scare away patients. Dendreon’s treatment, Provenge, is like getting the flu for three days, maybe. Each treatment was very expensive, but the total cost was much lower than chemo and radiation, was simpler to administer, and led to a better quality of life than other treatments. I was glad that I’d done my research, bought early and often, and had a giddy and heady ride as the stock climbed from under $3 to over $50, and looked like it would rise into the hundreds. Friday it was trading at under $3. Whether through poor marketing, bad management, or intense counter pressure from the entrenched industry, the company and the stock have not succeed – even while Provenge has been proving itself in practice, and proving the technology may also work in other cancers too. Sadly, my dream of having a large enough portfolio to launch into philanthropy was undermined as I had to sell my stock at ever-decreasing prices. When the last of my DNDN was gone, so was my history of paying my bills on time.
Biotechs spend billions of dollars trying to improve patients’ lives. Multi-phased double-blind clinical trials, peer-reviewed, government-regulated result in bizarre mixes of compassion, finance, bureaucracy, and public perception. That’s why Geron’s news really hasn’t actually been released yet. The news won’t be delivered until December at some conference, yet the speculation begins based on snippets of abstracts.
As much as I am an advocate of innovation, I am also an advocate of simplicity and resourcefulness.
I live on an island that prides itself on its organic farms, fresh seafood, and a clean environment. Even the bicycle community here has an Occupy theme. (Occupy Your Bike!) There are so many health and food advocates around here that bringing a dish to a potluck requires an ingredients list so folks can check against diet restrictions and preferences: gluten or no, vegan or no, dairy or no, seafood or no, GMO or no. We get the chance to eat in whatever healthy fashion we prefer. (I know even know a good source for paleo granola.) Every diet has its advocates, and while they frequently are mutually exclusive, this is a place to learn a lot about each – and witness the effects in the health of the people.
Maintenance is cheaper and more effective than repair or replacement. Living healthy takes a bit of thought at the start, but it leads to less time spent on sick leave or managing the side effects of persistent medications. Want to bring down health care costs? Eat right. Exercise often (wearing appropriate safety equipment of course). Rest, relax, and enjoy. (So says the guy who knows he’s working too many hours, but that’s another story.)
See, that’s so simple it takes fewer words and syllables to describe.
Yet, I wonder. We spend billions systematically trying to cure our ills. How much more effective would it be to systematically find ways to eat and live healthier? Where’s the billion dollar clinical trial study that demonstrates the effect of eating tomatoes, garlic, olive oil, mushrooms, heritage wheat, and raw milk cheese? Wouldn’t it be great and grand to find that our government had proven that a mushroom and cheese pizza would keep down our health care costs?
Dinner tonight was fried rice with curried chicken. All of the veggies came from my friend’s garden. We bought the chicken and rice, both organic of course, and I enjoyed it with a nice glass of white wine. I won’t be able to prove its health benefits, because evidently the lack of a disease is not an sufficient enticement in today’s society. But maybe some day it will.
It’s late enough now that it’s time for popcorn, and a relaxing in front of a movie at the end of the day. I hope Geron, GERN, the shareholders, and most importantly the patients succeed. Simple of complex, the celebration will be welcome.