EVENTS | VIEW CALENDAR
Geron finalizes stem cell asset divestment
MENLO PARK, Calif.—Geron Corp. announced today the closing of the transaction divesting its stem cell assets. This concludes an agreement established back in January in which Geron inked an asset contribution agreement with BioTime, Inc. and Asterias Biotherapeutics, Inc.
Per the terms of the agreement, on the transaction's close, Geron presented Asterias with intellectual property and tangible assets associated with its discontinued human embryonic stem cell programs, including cell lines and a Phase I clinical trial in patients with acute spinal cord injury; intellectual property related to its autologous cellular immunotherapy program and a related Phase I/II clinical trial in patients with acute myelogenous leukemia; and non-therapeutic applications of pluripotent stem cells. In return, Geron received roughly 6.5 million shares of Asterias Series A common stock and will be eligible for royalties if any products are commercialized that are based on the patents acquired from Geron. Geron will distribute the Series A common stock received from Asterias to its shareholders on a pro- rata basis.
Asterias received from BioTime approximately 8.9 million shares of BioTime common stock, five-year warrants for the purchase of eight million additional shares of BioTime common stock at an exercise price of $5 per share, rights to use select human embryonic stem cell lines and minority stakes in two of BioTime's subsidiaries. Additionally, the principal amount of a $5 million loan to Asterias from BioTime was cancelled. In return, BioTime has received roughly 21.8 million shares of Asterias Series B common stock and three-year warrants to purchase 3.15 million additional shares at an exercise price of $5 per share.
This transaction concludes a decision made back in 2011, when Geron announced that it would be discontinuing development of its stem cell programs and seeking partners for its assets in order to focus instead on its first-in-class oncology programs. The decision came after a strategic review of the company's research and clinical-stage assets, and resulted in the firing of 66 employees, roughly 38 percent of Geron's workforce.
John Scarlett, M.D., CEO of Geron, attributed the decision to "the current environment of capital scarcity and uncertain economic conditions," noting that "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. This would not be possible if we continue to fund the stem cell programs at the current levels." Scarlett also noted that the decision had nothing to do with a lack of promise in the field.
The decision ended a long run in the field of stem cell research for the company, as it was one of the first companies on the clinical scene, beginning the first clinical trial of an embryonic stem cell-derived therapy in 2010.