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Secondhand stem cell sale
MENLO PARK, Calif.—About a year after announcing its intent to leave the stem-cell therapy market, Geron Corp. also recently stated its intentions with regard to its discontinued human embryonic stem cell programs: It will sell them to BioTime Inc., a stem cell developer based in the San Francisco Bay Area that was founded by former Geron scientists.
Geron announced in mid-November a non-binding letter of intent to sell the programs to BioTime's recently formed subsidiary, BioTime Acquisition Corp. (BAC), for $5 million in cash, $30 million in shares, warrants to purchase 8 million shares at a predetermined price, rights to use certain human embryonic stem cell lines and minority stakes in two subsidiaries of BioTime.
If the non-binding agreement is finalized, BioTime would own approximately 71.6 percent, and a private investor would own approximately 7 percent, of the outstanding BAC common stock, for an additional $5 million investment. BioTime would also receive warrants that would enable it to increase its ownership in BAC by approximately 2 percent, which would dilute the Geron stockholders' ownership in BAC to 19.2 percent. BAC would also be committed to pay to Geron royalties on the sale of products that are commercialized in reliance upon Geron patents acquired by BAC.
A publicly traded company since 1992, BioTime is headquartered in the San Francisco Bay Area and has subsidiary offices in Singapore, China and Israel. The company's focus is on regenerative medicine, particularly in the areas of advanced macular degeneration, cancer, cartilage repair and multiple sclerosis. Through its ReCyte Therapeutics subsidiary, BioTime is also working to reverse the developmental aging of human cells in age-related vascular and blood disorders such as coronary disease and heart failure. BioTime also sells its proprietary human embryonic cell and progenitor cell lines to researchers, scientists, universities and companies.
In November 2011, Geron announced it would exit the stem cell research arena, despite having an ongoing U.S. Food and Drug Administration-approved clinical trial for spinal cord injury. The company had received millions in loan funding for the program from the California Institute for Regenerative Medicine (CIRM), a taxpayer-funded institute for stem cell research in California. Geron repaid the CIRM loan—with interest—and decided instead to focus on the development of other programs, including its experimental cancer drug, imetelstat.
In December, Geron announced that in mid-stage clinical trials, 100 percent of patients responded to the drug, and most patients who had a specific gene mutation responded to the drug. The results came from 14 patients with essential thrombocytopenia who were not helped by other treatments or could not tolerate the side effects of those treatments.
At press time, no news of specific signing and closing terms and conditions was announced.