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A monumental decision by Geron Corporation (NASDAQ:GERN) has drastically altered the landscape of embryonic stem cell research and sent shares to below the $2 mark in a hurry, but it also has heavy implications on the race to bring an effective treatment for spinal cord injuries ((NYSE:SCI)) to market.

On Monday afternoon Geron announced that the company would, effective immediately, discontinue further development of its stem cell lines and will instead focus all resources on its "first-in-class" oncology programs. This marks a huge shift for the company, as it had become arguably the recognized leader in embryonic stem cell research and development when the FDA made the historic decision a few years ago to grant approval for Geron to commence the first-ever clinical trial based on embryonic stem cell lines.

At the time, GERN shares flew high and fast enough that the company sported a near billion dollar market cap for a while, and the company's oncology pipeline just about became an afterthought behind the potential of the developing stem cell-based SCI treatment.

It became apparent on Monday, however, that Geron's resources could not support the advancement of both pipelines simultaneously, and being further along in development, the oncology line won out.

Due recognition, however, goes to the fact that Geron will now be looking to partner its stem cell programs, but as noted in some reports released since the blockbuster news, potential partners are looking for later stage results than what can currently be provided.

This development has major implications for the development of embryonic stem cell research and technology, but it also makes the race to a potential cure for spinal cord injuries (SCI) a 'one man show', with InVivo Therapeutics (OTCQB:NVIV) standing firm with the Geron program now on hiatus.

InVivo, as I've recently discussed, is awaiting the go-ahead from the FDA to move its scaffolding technology to human trials, after preclinical studies in rats and primates have proven to be highly successful. The scaffold being developed by InVivo, as described by company founder and former paralysis patient himself Frank Reynolds, is customized to fit each spinal injury and stabilizes the spinal cord in a manner to promote healing during the crucial stages immediately following an injury where a victim's spinal cord is still in 'spinal shock.'

It's been theorized that ninety percent of SCI patients are not initially paralyzed following an injury, rather they only become paralyzed by secondary injuries caused by inflammation, bleeding and scarring during the stages of spinal shock. InVivo's scaffolding device looks to heal the spinal cord in a timely manner before those secondary injuries take effect. It is also convenient enough to be administered in conjunction with the current standard of care and can be administered right there in the emergency or operating rooms shortly after a patient first arrives for treatment.

During the primate testing, pre-clinical phase of treatment, 100% of the monkeys treated with the scaffold in were up and running within 12 weeks following paralyzation. The results were astounding enough that a quick transition into human trials was planned, and it's just a matter of the FDA green light at this point for the trials to begin.

One advantage that InVivo has in potentially bringing its treatment into the heart of an annual ten billion dollar market is that the scaffold is being developed as a medical device, not as a pharmaceutical. The path to regulatory approval for medical devices is far shorter than that for new drugs, which would have had InVivo's technology on the market years before Geron's anyway, although Geron's shocker leaves InVivo with relatively little competition, for the time being; and with Geron now not considered a player in the SCI market until a partner materializes, a lot more attention could start to be paid to InVivo.

InVivo is also developing a hydrogel, for which preclinical data in primates is also prepared to be presented FDA review. According to comments made by CEO Frank Reynolds in a recent seminar, primates treated with the hydrogel have actually demonstrated the best recoveries from paralyzation. The hydrogel looks to be a worthy follow-up to the scaffold application.

Additionally, the company is finalizing a peripheral nerve study, which will support and FDA application in the summer of 2012, and also look for InVivo to seek approvals for combination therapies (stem cells, for instance) to be used in conjunction with the scaffolding device, should it successfully make it through human trials and then to market.

The possibilities presented by combining InVivo's scaffold with other drug and cell therapies has already led to a strategic partnership with the Miami Project, an organization that has to date raised nearly half a billion dollars in search of a cure for SCI-induced paralysis. This collaboration will study InVivo’s tissue engineering technology in conjunction with the Miami Project’s Schwann cells and was featured last month at the Buoniconti Fund to Cure Paralysis 26th Annual Great Sports Legends Dinner fundraising event.

In commenting on the Miami Project collaboration, CEO Frank Reynolds noted, “We look forward to the results of our preclinical work with the Miami Project, and are hopeful that the combination of the scaffold and Schwann cells will improve the therapeutic effect of both technologies. Our scaffold has shown excellent results in non-human primates and in a rodent contusion model treating paralysis following acute spinal cord injury. We remain on target to begin a 10-patient pilot study in acute spinal cord injury in 2012.”

In moving to human trials, InVivo was already set to start making some noise as a company with a potential cure for severe SCIs, but with Geron announcing the surprising news on Monday that it does not intend to continue developing its technology without a partner, the race to the cure for paralysis might not be a race anymore - it might now be NVIV's game to lose.

And things are just now heating up.

Source: Geron's Shift Opens The Door Wide For InVivo