Why did Deep Track Capital increase its GERN stake by 362% in March 2025, while RTW Investments exited?

This is an excellent question that gets to the heart of how different institutional investors can look at the same company and come to opposite conclusions. The divergent paths of Deep Track and RTW on Geron likely hinge on their interpretation of the commercial launch of RYTELO® (imetelstat) and future catalysts.

Interpreting the RYTELO Launch

By early 2025, Geron was well into the U.S. commercial launch of RYTELO after its June 2024 FDA approval. The key period leading into the March 2025 ownership changes was the Q4 2024 earnings report, released on February 26, 2025.

• The Bull Case (Deep Track): Geron reported $47.5 million in RYTELO net product revenue for Q4 2024 and stated they expected to reach profitability without additional financing if sales trends held. Furthermore, a positive opinion from European regulators in December 2024 set the stage for a 2026 EU launch. Deep Track, seeing this, may have interpreted any market softness as a prime opportunity to build a major position at a favorable cost basis, betting that the initial sales were strong enough to warrant a "blockbuster potential" thesis and that the market was underestimating the long-term revenue ramp and the potential doubling of the commercial opportunity from the myelofibrosis (MF) indication.

• The Bear/Pragmatist Case (RTW): Conversely, Geron's Q1 2025 report in May noted that while Q4 revenue was strong, Q1 demand was "relatively flat" and impacted by inventory dynamics. The 10-Q filed around the same time also disclosed shareholder lawsuits alleging the company overstated RYTELO's commercial potential, citing a stock drop after the February 26 earnings call where "flat revenue trends" were mentioned. For a fund like RTW, which may be more catalyst-driven, this could have signaled that the initial launch enthusiasm had peaked and the growth story was becoming more challenging. They may have decided to exit the position to redeploy capital into opportunities with clearer near-term upside, viewing their GERN thesis as complete.

In essence, Deep Track appears to be making a long-term conviction play on the full commercial potential, while RTW may have seen the risk/reward profile shift unfavorably after the initial post-approval run.

Analyze Deep Track Capital's other major portfolio changes in Q1 2025 to understand if the GERN increase was part of a broader sector bet or a company-specific conviction.