BioTime Makes Bid for Geron's Stem Cell Assets

Biotime, Inc., and two men who were leading players in history of Geron Corp. today made a surprise, public bid for the stem cell assets of their former firm.

Michael West
West photo

Tom Okarma
AP file photo

The men are Michael West and Thomas Okarma. West founded Geron in 1990 and was its first CEO. West is now CEO of Biotime. Okarma was CEO of Geron from 1999 to 2011. Okarma joined Biotime on Sept. 28 to lead its acquistion efforts. Both Geron, based in Menlo Park, Ca., and Biotime, based in Alameda, Ca., are publicly traded.

West and Okarma sent an open letter this morning to Geron shareholders and issued a press release making a pitch for the Geron's stem cell assets. Geron jettisoned its hESC program nearly a year ago and closed its clinical trial program for spinal injuries. The move shocked the California stem cell agency, which just a few months earlier had signed an agreement to loan the firm $25 million to help fund the clinical trial. The portion of the loan that was distributed was repaid with interest.

At the time, Geron said it would try to sell off the hESC program, but no buyers have surfaced publicly. Personnel in the program have been laid off or found employment elsewhere.

The West-Okarma letter to shareholders said that under the deal,

“Geron would transfer its stem cell assets to BAC(a new subsidiary of Biotime headed by Okarma), in exchange for which you along with the other Geron shareholders would receive shares of BAC common stock representing approximately 21.4% of the outstanding BAC capital stock. BioTime would contribute to BAC the following assets in exchange for the balance of outstanding BAC capital stock:

• “$40 million in BioTime common shares;
• “Warrants to purchase BioTime common shares (“BioTime Warrants”);
• “Rights to certain stem cell assets of BioTime, and shares of two BioTime subsidiaries engaged in the development of therapeutic products from stem cells.”

The letter asked Geron shareholders to write the firm's board of directors to urge them to approve the offer.

Geron had no immediate response to the proposal. Asked for comment, Kevin McCormack, spokesman for the California stem cell agency, said the deal “had nothing to do with us.” However, in the past, CIRM has indicated that it could find a way to transfer the loan to an entity that would continue spinal injury clinical trial. CIRM President Alan Trounson was also involved at one point in trying to assist in a deal.

Geron's shares rose 12 cents to $1.54 today while Biotime's shares lost four cents to $3.95.

Here are links to the two news stories that have appeared so far on the proposed deal: Associated Press, Marketwatch.