By Michael Fitzhugh
Geron (NASDAQ:GERN) is quitting its pioneering stem cell therapeutics programs to focus on the relatively near-term promise of cancer drugs.
The Menlo Park, California company is seeking partners to take on GRNOPC1, an early-stage human embryonic stem cell-based therapy for acute spinal cord injuries, as well as four other programs with indications including heart disease, diabetes.
“Stem cells continue to hold great medical promise,” say Geron's CEO, John Scarlett. But a scarcity of capital and economic uncertainties has convinced the company to focus on its two mid-stage cancer candidates, Imetelstat and GRN1005. Geron anticipates having $150 million left at the end of 2011, enough to fund it through important clinical development milestones for both during the next 20 months.
Investors dumped shares of the company after the change in course was announced. Geron shares fell 58 cents, or 26 percent, to $1.62 following the news.
Geron’s course-change will leave Advanced Cell Technology as the only other U.S. company to get the FDA’s blessing to conduct human stem cell trials.
Unwinding its stem cell program will cost about $8 million and eliminate about 66 full-time jobs, 38 percent of its workforce, the company estimates.
Geron plans to close its GRNOPC1 trial for spinal cord injury to further enrollment, but will continue to follow patients enrolled in the study, accrue data, and update the FDA and the medical community on their progress, the company said.
Finding a partner willing to bet on a potentially promising but risky portfolio of stem cell therapies may be difficult for Geron. In May 2008, the FDA placed a clinical hold on early-stage trials of GRNOPC1, spooking investors and sending Geron shares tumbling 22 percent. Trials were resumed when the company finally got a green light to proceed again in July 2010.
In the United States, potential partners may be put off by public concerns over the morality of destroying embryos and the ongoing battle over federally funded embryonic stem cell research remain. Potential European partners are also likely to be discouraged, given the recent ruling by the Court of Justice of the European Union, which determined that E.U. researchers couldn’t patent inventions relying on the destruction of human embryos.
Moving forward, Geron will focus on several mid-stage trials. Imetelstat is now being tested in non-small cell lung cancer, breast cancer, essential thrombocythemia, and multiple myeloma; Two trials of GRN1005 will also begin this year, one in brain metastases arising from non-small cell lung cancer and the other for brain metastases from breast cancer.
“By narrowing our focus to the oncology therapeutic area, we anticipate having sufficient financial resources to reach these important near-term value inflection points for shareholders without the necessity of raising additional capital,” says Scarlett, “This would not be possible if we continue to fund the stem cell programs at the current levels.”