Thursday, October 03, 2013

Groundbreaking Ahead? Geron's Stem Cell Program Officially Goes to Biotime/Asteria

Geron's once-heralded stem cell therapy program -- financed at one point with $25 million from the California stem cell agency – has officially landed in the hands of an Alameda, Ca., enterprise involving two former CEOs of Geron.

Completion of the transaction was announced Tuesday by BioTime, which acquired the Geron assets. The move “could jump start groundbreaking but not yet clinically successful stem cell programs,” according to an article by Ron Leuty of the San Francisco Business Times. Leuty also outlined the complicated financial terms.

Geron, based in Menlo Park, Ca., was the first in the nation to launch a clinical trial for a human embryonic stem cell therapy. In 2011, in a major departure from its usual procedures, the stem cell agency loaned Geron $25 million to help with the trial. About three months after the loan agreement was signed on Aug 1, 2011, Geron announced it was abandoning the trial for financial reasons. Four patients had been enrolled in the trial.

Geron repaid the loan with $36,732.33 in interest, laid off 38 percent of its staff (66 persons connected to the stem cell program) and began an effort to sell off the stem cell effort.

About a year later, BioTime, which is headed by Michael West, who founded Geron, began expressing an interest. Tom Okarma, another Geron CEO, hooked up with West on the effort and is now head of Asteria Biotherapeutics, a BioTime subsidiary that is taking control of the old Geron stem cell program.

Geron let Okarma go in February 2011. He was head of the company as it plowed through the arduous FDA process to begin the clinical trial of the stem cell treatment for spinal injuries.

The stem cell agency has said that the loan to Geron is not transferable automatically to BioTime. The firm will have to compete for funding under the agency's established rules.

Both Geron and BioTime are publicly traded. In the last 12 months, Geron stock has traded at a range from 91 cents to $3.95, closing at $3.40 yesterday. BioTime has traded in a range from $2.67 to $5.02, closing at $3.88 yesterday.

As part of the deal with Geron, the stem cell agency received 537,893 warrants to buy Geron stock at $3.98 each. The warrants expire in 2021.

Here are other news articles on completion of the transaction, which was announced earlier this year: by Jef Akst at The Scientist, by Damian Garde at Fierce Biotech.

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