Geron's 2026 Guidance Shows Modest Growth and Cost Cuts, Falling Short of DeepValue's Bull Triggers

What happened

Geron issued 2026 financial guidance projecting RYTELO net product revenue of $220-240 million, indicating year-over-year growth from an estimated 2025 base of around $180 million. Total operating expenses are expected to be $230-240 million, a reduction of only about 8% from the 2025 range of $250-260 million, which falls short of the 20% cut needed to improve the investment thesis per DeepValue's report. This revenue guidance aligns with the base case of gradual penetration in lower-risk MDS but lacks the explosive growth required for the bull scenario. DeepValue's analysis highlighted that significant opex reductions and robust sales are key to shifting from a 'WAIT' rating, and this update does not meet those thresholds. Thus, while management is executing on cost control and top-line expansion, the progress is insufficient to alter the cautious outlook.

Implication

In the near term, the guidance may provide some stability by confirming sales growth and cost discipline, potentially preventing further stock declines. However, the opex reduction is below DeepValue's 20% threshold, suggesting cash burn could remain elevated and limit runway extension without additional financing. For the medium term, if revenue hits the high end of guidance, it approaches the $250 million annualized level that triggers re-assessment, but sequential growth must exceed 10% for multiple quarters to boost confidence. The bear case risk persists if sales plateau or opex fails to decline further, given Geron's leveraged balance sheet and binary IMpactMF trial outcome in 2H 2026. Therefore, while execution is improving, the investment thesis still hinges on future quarterly performance and critical trial data, maintaining high binary risk.

Thesis delta

The DeepValue thesis remains unchanged, as the 2026 guidance does not meet the specific criteria for increasing conviction: opex cuts are insufficient at ~8% versus the required ≥20%, and revenue growth, while positive, lacks the sequential momentum needed to trigger an upgrade. This reinforces the base scenario where Geron achieves moderate sales growth and partial cost savings, extending the runway but not eliminating the need for further improvements before the IMpactMF readout. No shift in the 'WAIT' rating or scenario probabilities is warranted based on this update.