* Shares down as much as 28 pct on stem cell retreat
* Shares hit 5-year low
* Co says stem cell research has "tremendous promise"
Nov 15 Shares of Geron Corp , the first
company conduct human embryonic stem cell trials, fell by as
much as 28 percent on Tuesday, a day after the biotech company
said it was getting out of stem cell research to focus on
Geron executives said on a conference call on Tuesday that
getting out of the stem cell field was strictly a business
decision. Investments pay off much faster in oncology than in
stem cells, they said.
"We're making these changes because in the current
environment of economic scarcity and uncertain economic
conditions, we need to focus our resources on advancing our
Phase 2 trials ... Both of these (cancer) drug candidates
target major medical needs and have important clinical
milestones that are occurring over the next 20 months," Geron
Chief Executive Officer John Scarlett told analysts.
The company said it saw promise in its two cancer programs,
imetelstat and GRN1005.
Geron is testing imetelstat in mid-stage trials for breast
cancer and non-small cell lung cancer, while GRN1005 is being
tested in a mid-stage trial as a treatment for brain cancer.
By narrowing its focus to oncology, Geron expects to have
sufficient financial resources to see the research through
without having to raise additional capital, Scarlett said.
"These were business decisions we took on behalf of our
shareholders ... We still think the (stem cell) field has
tremendous promise," added Scarlett, who took the helm a couple
of months ago.
After the market closed on Monday, the company said it was
quitting embroyonic stem cell research, and cut 66 full-time
positions, or 38 percent of its workforce.
"This is a shock to the (stem cell research industry)
system ... because the unequivocal leader in the embryonic stem
cell space is now getting out of the stem cell space," WBB
Securities analyst Steve Brozak said.
Geron officials said it was a difficult decision since
Geron has been widely recognized as a leader in the field and
said it was actively seeking partners or buyers to drive its
programs forward. The company said it is engaged in "a number
of conversations" with potential partners.
According to Brozak, investors' focus will now be on which
company will take the stem cell leadership mantle and how Geron
shareholders will benefit from that transaction.
Brozak said BioTime Inc would be a potential
partner for Geron, as the company is the closest in terms of
its understanding the science and has sufficient resources.
Companies such as Athersys Inc , Pluristem
Therapeutics Inc and Australia's Mesoblast Ltd are also currently developing stem cell therapies.
Geron management said one of its small stem cell programs
treating spinal cord injury has already treated four of the
eight patients it had approval to treat. A new partner would
have the option to continue the trial.
Geron was the first company to start a U.S.-approved
clinical trial using human embryonic stem cells in patients
with spinal cord injury. In October, Geron reported data from
an early-stage trial that showed its embryonic stem cell-based
therapy was safe in all four patients who received the
The company said on Monday it would close further
enrollment of patients for its GRNOPC1 trial for spinal cord
Embryonic stem cell therapy has been controversial because
some of these cells are derived from human embryos, often by
destroying them. Last month, Europe's top court banned
patenting stem cells involving destruction of embryos.
However, researchers see great potential in stem cells,
which have the ability to multiply into different type of cells
and act as a repair system for the human body. The World Health
Organization estimates these cells may one day be used to treat
diseases such as Parkinson's and Alzheimer's, which are
With its restructuring, Geron Chief Financial officer David
Greenwood said Geron's projected use of balance sheet cash for
2011 will increase to a range of about $65 million to $70
million. He said he expects to end 2011 with cash in excess of
Shares of Menlo Park, California-based Geron, which touched
a five-year low of $1.59, were down 49 cents, or 22 percent, to
$1.71 on Nasdaq in afternoon trading. BioTime shares were up
7.1 percent to $4.52 on the NYSE Amex.