Geron Corporation (NASDAQ:GERN) is a biopharmaceutical company focused on developing and commercializing innovative therapeutics for cancer treatment. The company's primary product candidate is imetelstat, a telomerase inhibitor, which is in clinical trials for hematologic myeloid malignancies.
Geron operates in a competitive landscape with peers like Stem, Inc., Agenus Inc., and Exelixis, Inc., each with varying financial metrics. Geron Corporation's ROIC is -34.35%, which is significantly lower than its WACC of 8.10%. This negative ROIC indicates that Geron is not generating enough returns on its invested capital to cover its cost of capital. The ROIC to WACC ratio of -4.24 further highlights the inefficiency in capital utilization, as the company is not able to generate positive returns from its investments.
In comparison, Stem, Inc. has an even more negative ROIC of -80.62% and a WACC of 4.70%. This results in a ROIC to WACC ratio of -17.15, suggesting that Stem is utilizing its capital even less efficiently than Geron. The significant gap between ROIC and WACC for Stem indicates a substantial challenge in generating returns that exceed its cost of capital.
On the other hand, Agenus Inc. presents a stark contrast with a positive ROIC of 302.53% and a WACC of 79.24%. The ROIC to WACC ratio of 3.82 suggests that Agenus is effectively generating returns well above its cost of capital. This indicates a strong performance in capital utilization, making Agenus stand out among its peers.
Exelixis, Inc. also demonstrates efficient capital use with a positive ROIC of 18.19% and a WACC of 6.48%. The ROIC to WACC ratio of 2.81 indicates that Exelixis is generating returns that exceed its cost of capital, though not as significantly as Agenus. This positions Exelixis as a strong performer in terms of capital efficiency within the peer group.
