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Reviewing the News, Geron Corporation (Nasdaq: GERN)

The turmoil in the last 2-3 weeks markets makes it hard sometimes to focus GERN’s short-term share price appreciation.  An expanding indication for GRNOPC1 is good news as the FDA placed a clinical hold on the early-stage trial of this compound. The outstanding warrant exchange accounting for approximately 3/4 of all warrants strengthened the balance sheet with GERN selling additional shares of common to investors at a premium for gross proceeds of $10 M, generating a 2.7 M shares lock-up provision with the new block of shares being purchased and issuance of a call option to the investors to purchase an additional $5 M of common stock.  Adding to the these events,  the GRN163L  compound is being tested on human cells and on rodents showing very striking results; attacking not only the bulk of the tumor cells, but also the rare cancer stem cells that are believed to be responsible for most of a cancer’s growth.

Revisiting January, this newly announced Discovery Research and Training Grant … is to investigate the therapeutic potential of its human embryonic stem cell (hESC)-based product, GRNOPC1, for Alzheimer’s disease. Under the collaboration, GRNOPC1 will be evaluated in mouse models.

  • Geron is currently developing GRNOPC1 for the potential treatment of spinal cord injury and is expanding  its  applications  in neurological disease,
  • GRNOPC1 contains the precursors to human glial cells, which have been shown to mature and repair the lesion site in rodent models of spinal cord injury,
  • There are striking parallels between recent data on mouse stem cells in Alzheimer’s disease models and what is known about GRNOPC1,
  • Alzheimer’s mouse models have been used extensively for investigating potential therapeutic approaches because they recapitulate key pathologies that are associated with progressive loss of memory in the human disease, including the extensive loss of neurons,
  • The studies were set up to investigate whether a stem cell-based therapy could potentially rescue or replace the cells that are lost in Alzheimer’s disease and thereby improve memory,
  • The improvement in memory and the increase in synaptic density observed after injection of neural stem cells were found to be mediated by the neurotrophic factor BDNF which is secreted from the transplanted cells; GRNOPC1 has been found to secrete BDNF as well as other neurotrophic factors,

GERN also exchanged outstanding warrants held by certain institutional investors for shares of its common stock.

  • The institutional investors delivered warrants to purchase approximately 5.6 M shares of common stock for cancellation in exchange for the issuance by the company of 2.7 M shares of its common stock,
  • The same investors will purchase 1.5 M shares of common stock at an 8 % premium to market, or $6.75 per share,
  • The purchase includes a call option to acquire an additional $5 M of common stock at the premium price. The option expires on 10/31/10,

Geron also announced the publication of preclinical data demonstrating that its telomerase inhibitor drug, imetelstat (GRN163L), inhibited activity and reduced tumor size in xenograft models of glioblastoma as well as inhibiting the activity of glioblastoma stem cells in culture. The data authored by collaborators at the University of Texas Southwestern Medical Center at Dallas was published in the 1/1/10  issue of Clinical Cancer Research.

  • Recent evidence suggests that glioblastomas contain rare populations of cells with a capacity for endless self-renewal, known as cancer stem cells or tumor initiating cells, and may be responsible for tumor growth and recurrence,
  • Cancer stem cells also show resistance to many conventional anti-cancer agents and are therefore important targets for this novel therapies.