BioTime Will Have to Compete for California Cash for Geron's Dormant Clinical Trial

Posted on November 18, 2012 by Fredricko

The California stem cell agency said
today it does not plan to reactivate the $25 million loan to assist
in Geron's spinal injury clinical trial despite an impending deal that would turn the effort over to BioTime, Inc.

Kevin McCormack, senior director for
public communications for the agency, said BioTime will have to
compete in an upcoming award round if it wants to win California
dollars.

Responding to a question from the
California Stem Cell Report, McCormack said,

“That (earlier) loan was specific to
Geron and when the trial was ended the loan ended too. Of course if
Biotime and Geron do complete their deal then Biotime would be free
to apply to us for a new disease team grant.”

McCormack later added that BioTime
could also compete in other appropriate rounds, including the
strategic partnership round just posted by CIRM. It provides for four
awards of up to $15 million. Funding could come as early as October
of next year. The strategic partnership round is a business-friendly
effort that is aimed at attracting “industry engagement and
investment.” The deadline for letters of intent is Dec. 18.

The stem cell agency made its $25
million loan to Geron in 2011 just a few months before the Menlo Park
firm abandoned its human embryonic stem cell trial for financial
reasons. (The full text of the loan agreement can be found here.) The company has repaid the loan with interest.

The company has tried to sell the
assets associated with the clinical trial since last November. The only public
interest that has surfaced has come from BioTime, Inc., of Alameda,
Ca. Michael West, founder of Geron, is the CEO of BioTime. Tom
Okarma, CEO of Geron from 1999 to 2011, is CEO of the BioTime
subsidiary that would assume the clinical trial.

News from clinical trial is expected to
be published soon, according to a story in the San Francisco Business
Times by Ron Leuty. He quoted CIRM President Alan Trounson as saying
that “some findings” from the trial would be published next month
in a medical journal.

Geron's stock traded at $1.24 at the
time of this writing today, up from $1.21 yesterday. BioTime's stock
stood at $2.99, up from $2.97.

Source:
http://feedproxy.google.com/~r/blogspot/uqpFc/~3/DS-6n2DoRy0/biotime-will-have-to-compete-for.html

BioTime Will Have to Compete for California Cash for Geron’s Dormant Clinical Trial

Posted on November 18, 2012 by Fredricko

Kevin McCormack, senior director for
public communications for the agency, said BioTime will have to
compete in an upcoming award round if it wants to win California
dollars.

Responding to a question from the
California Stem Cell Report, McCormack said,

“That (earlier) loan was specific to
Geron and when the trial was ended the loan ended too. Of course if
Biotime and Geron do complete their deal then Biotime would be free
to apply to us for a new disease team grant.”

Geron's stock traded at $1.24 at the
time of this writing today, up from $1.21 yesterday. BioTime's stock
stood at $2.99, up from $2.97.

Source:
http://feedproxy.google.com/~r/blogspot/uqpFc/~3/DS-6n2DoRy0/biotime-will-have-to-compete-for.html

Geron, BioTime Deal Moves Forward with Letter of Intent

Posted on November 18, 2012 by Fredricko

Geron Corp., which once pioneered human
embryonic stem cell research, is close to selling off its hESC business in a complicated deal involving two former CEOs of the company and
BioTime, Inc., of Alameda, Ca.

The two publicly traded firms yesterday
announced a “letter of intent” involving a transaction in which
BioTime would acquire the assets of Geron's hESC clinical trial that
the company suddenly abandoned last year. The firm also laid off 66 people,
about 40 percent of its staff.

Abandonment of the program came only a
few months after the $3 billion California stem cell agency loaned Geron $25 million to assist in the trial. The agency could
restore the loan for the trial, but the Geron-BioTime announcement
did not mention that possibility. The California Stem Cell Report has
asked the agency for comment.

The letter of intent came one year and
one day after Geron announced that it was giving up the hESC spinal injury trial because of financial reasons. The Menlo Park, Ca., firm
has been trying to sell its hESC assets since then. BioTime has
been the only firm to express public interest. The Geron trial was
the first hESC trial approved by the FDA.

The proposed deal involves Michael
West, who founded Geron and is now head of Biotime, and Tom Okarma,
who was CEO of Geron from 1999 to 2011. Okarma is now head of BioTime
Acquisition Corp.,(BAC) a subsidiary of BioTime.

Also involved is an unnamed private investor who would provide $10 million.

Here is how yesterday's press release
described the deal in which BioTime would acquire Geron's
“intellectual property and other assets related to Geron’s
discontinued human embryonic stem cell programs.”

“ BioTime would contribute
to BAC $5 million in cash, $30 million of BioTime common
shares, warrants to purchase eight (8) million common shares
of BioTime at a pre-specified price, rights to use certain
human embryonic stem cell lines, and minority stakes in two of
BioTime’s subsidiaries. In addition, a private investor would
invest $5 million in cash in BAC.

“Following consummation of the
potential transaction, Geron stockholders would receive
shares representing 21.4% of the common stock of BAC as well as
warrants to purchase 8 million shares of BioTime common
stock at a pre-specified price. BioTime would own
approximately 71.6%, and a private investor would own approximately
7.0% of the outstanding BAC common stock for their $5
million investment. BioTime would also receive
warrants that would enable it to increase its ownership in BAC by
approximately 2%, which would reduce the Geron stockholders’
ownership in BAC to 19.2%. 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.”

Prior to release of the letter of
intent, an article earlier this week by Vickie Brower in The Scientist said,

“The offer couldn’t come at a
better time for Geron, which in recent months has started to feel
pressure from its shareholders to boost its stock price and move
products through the pipeline. Since last November, when the company
announced its decision to shutter its hESC and regenerative medicine
business and funnel its resources into developing telomerase-related
treatments for cancer, the stock price has dropped more than 50
percent to $1.30 a share. Geron claimed the move was simply to save
money, but many took the decision—which effectively terminated a
clinical trial of an hESC treatment for spinal cord injury—as a
setback for the entire field."

News coverage of yesterday's
announcement was light. Here is a link to a piece by Ryan McBride on
Fierce Biotech.

Geron's stock price closed at $1.21
yesterday and rose to $1.24 in after hours trading. BioTime closed at
$2.97. No after hours trading was reported for BioTime.

Source:
http://feedproxy.google.com/~r/blogspot/uqpFc/~3/b-E7JaABIOI/geron-biotime-deal-moves-forward-with.html