Geron Corporation announced that it is discontinuing research and development on stem cell programs and plans to focus on its oncology programs. The company added that it is actively “. . . seeking partners for these novel assets.” This is likely to be good news for regenerative medicine companies, such as Pluristem, StemCells, Aastrom Biosciences and InVivo Therapeutics, analysts say. Since Geron’s announcement, InVivo’s shares have risen sharply.
Geron has been a leader, if not the leader, in stem cell research in the USA.
Geron said that the US (and global) economy, the way it is, is not ideal for diversification, and the company decided to focus more on its core field – oncology.
John A. Scarlett, M.D. CEO of the Geron Corporation, said:
“In the current environment of capital scarcity and uncertain economic conditions, we intend to focus our resources on advancing our Phase 2 clinical trials of imetelstat and GRN1005. These two novel and promising oncology drug candidates target major unmet medical needs and have important clinical development milestones occurring over the next 20 months.
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.”
After carrying out a strategic review of several factors, including costs, the complexities involved in clinical, manufacturing and regulatory issues, value inflection timelines – all associated with Geron’s research and clinical-stage assets, the company decided to narrow its focus. Put simply – the company said its decision was due to high costs and the commercial uncertainty in this field.
Sixty-six full time positions (38% of workforce) have been eliminated, the company announced. This will incur a one-time cash expenditure of about $5 million in the fourth quarter of this year, plus another $3 million during the first six months of next year.
Geron says it is looking for partners with financial resources as well as technical knowhow to further develop its stem cell programs.
Dr. Scarlett said:
Geron is seeking partners with the technical and financial resources to enable further development of its stem cell programs. “Our employees, collaborators and shareholders can be proud of the pioneering role they have played to advance our stem cell technology into the clinic. Stem cells continue to hold great medical promise.
We believe that our leadership role in the field and the quality of our stem cell assets-which are widely recognized as being among the most innovative, comprehensive and advanced cell therapy programs in the world-will be an important point of differentiation in our discussions to partner these assets.”
The company says it will maintain a core group of employees so that these stem cell programs can be transferred to future partners. This core of staff will be kept on until the second quarter of next year.
There will be no further enrollment for its GRNOPC1 trial for spinal cord injury, Geron explained. However, all patients who are currently enrolled will continue to participate in the ongoing trial.
Written by Christian Nordqvist