BioTime Signs Definitive Agreement With Geron Regarding Stem Cell Assets

  BioTime Signs Definitive Agreement With Geron Regarding Stem Cell Assets

                  Investor Commits to $10 Million Financing

Business Wire

ALAMEDA, Calif. -- January 7, 2013

BioTime, Inc. (NYSE MKT: BTX) and its recently formed subsidiary BioTime
Acquisition Corporation (BAC) jointly announced today that they have entered
into a definitive Asset Contribution Agreement with Geron Corporation (Nasdaq:
GERN) to acquire the intellectual property, including patents and patent
applications, and other assets related to Geron’s human embryonic stem (hES)
cell programs consistent with the financial terms outlined in the letter of
intent announced on November 15, 2012.

Under the definitive agreement, Geron will contribute to BAC intellectual
property, certain cell lines and other assets, including the Phase 1 clinical
trial of hES cell-derived oligodendrocytes in patients with acute spinal cord
injury, and Geron’s autologous cellular immunotherapy program. BioTime will
contribute to BAC $5 million in cash, 8,902,077 BioTime common shares to be
held by BAC, five-year warrants to purchase 8,000,000 common shares of BioTime
at a price of $5.00 per share (“BioTime Warrants”), rights to use certain
clinical grade hES cell lines, a sublicense to use certain patents for stem
cell differentiation technology, and minority stakes in two of BioTime’s
subsidiaries, OrthoCyte Corporation and Cell Cure Neurosciences Ltd. BAC will
also pay to Geron royalties on the sale of products that are commercialized,
if any, in reliance upon Geron patents contributed or licensed to BAC. A
private investor has also agreed to provide an equity investment of $5 million
in BAC and a $5 million equity investment in BioTime in conjunction with the
transaction.

Geron pioneered the field of regenerative medicine in the mid-1990s by
organizing the first effort to isolate human embryonic stem (hES) cells. hES
cells are early-stage stem cells that are capable of becoming all of the cell
types in the human body, and therefore are widely recognized as a means of
manufacturing cells that are potentially useful in regenerating tissue
function for a wide array of degenerative diseases. Currently, Geron’s hESC
patent portfolio includes over 400 patents and patent applications that will
be transferred or sublicensed to BAC. Geron obtained the first approval from
the Food and Drug Administration for human clinical trials of a product
manufactured from hES cells.

Geron’s former hES cell programs included oligodendrocyte progenitor cells for
central nervous system disorders, cardiomyocytes for heart disease, pancreatic
islet cells for diabetes, dendritic cells as an immunotherapy vehicle, and
chondrocytes for cartilage repair. BAC may pursue the development of
therapeutic products from some or all of these cell types, depending upon a
number of factors, including the expected cost of development, sufficiency of
financing, the state of development of the technology acquired, regulatory
considerations, anticipated market size, and competition from other companies
in the applicable fields. BAC may also seek to develop other therapeutic
products, taking into account the same or other applicable considerations.

“Our consistent goal at BioTime has been to consolidate the pluripotent stem
cell technology platform,” stated Michael West, Ph.D., Chief Executive Officer
of BioTime, Inc. “With this contribution of assets, the combined intellectual
property estate in the BioTime family of companies will be among the strongest
in the field of Regenerative Medicine; establishing our leadership in the
industry and advancing product development.”

“We are excited aboutour approach toward consolidating themost
importanttechnologies in Regenerative Medicine,” said Thomas Okarma, M.D.,
Ph.D., president and CEO of BAC. “Regenerative Medicineholds great promise
for patientsand now, with our significant collection of world class stem cell
technologies, IP, and experienced management, we arepositioned tohelp
realize that promise.”

Closing of the transactions under the definitive agreement is subject to
certain negotiated closing conditions, including the registration of the BAC
Series A common stock, the BioTime common shares contributed to BAC, and the
BioTime Warrants under the Securities Act of 1933, as amended, and certain
approvals by BioTime shareholders. The transaction is expected to close no
later than September 30, 2013.

Upon closing of the transaction, Geron will receive BAC Series A common stock,
and BioTime and the private investor will receive BAC Series B common stock in
the transaction. The Series A and Series B common stock will be identical,
except that BAC will be entitled to make certain distributions or pay
dividends on its Series A common stock without making a distribution or paying
a dividend on its Series B common stock.

Following the closing of the transaction, Geron will distribute on a pro rata
basis to its stockholders the shares of BAC Series A common stock received in
the transaction. Following that distribution by Geron, BAC will distribute on
a pro rata basis to the holders of those shares the BioTime Warrants. The
Series B common stock will be convertible into Series A common stock following
the distribution of the BioTime Warrants.

Following these distributions, BioTime will own approximately 71.6%, Geron
stockholders will own approximately 21.4%, and the private investor will own
approximately 7.0%, of the outstanding BAC common stock. BioTime and the
private investor will also receive warrants to purchase additional shares of
BAC Series B common stock that would enable them to increase their collective
ownership in BAC by approximately 2.2%, which would reduce the Geron
stockholders’ ownership in BAC to approximately 19.2%.

BAC plans to seek to list its Series A common stock, and BioTime intends to
seek to list the BioTime Warrants, on a national securities exchange.

In anticipation of use by BAC, BioTime is entering into a three-year lease of
an office and research facility in Menlo Park, Calif.

In a separate and related transaction, BioTime and BAC have each entered into
Stock and Warrant Purchase Agreements with a private investor to provide each
company with $5 million in equity financing. Under the terms of the BioTime
agreement, the investor will invest $5 million in BioTime by purchasing an
aggregate of 1,350,000 BioTime common shares at a purchase price of
approximately $3.70 per share and warrants to purchase 650,000 additional
BioTime common shares with an exercise price of $5.00 per share and a three
year term. The shares and warrants will be sold to the investor in two
tranches. In the first tranche, the investor will purchase 540,000 BioTime
common shares and warrants to purchase approximately 260,000 BioTime common
shares for $2 million subject to the conditions of the Stock and Warrant
Purchase Agreement. The second BioTime investment tranche of $3 million will
be funded in conjunction with the closing of the stem cell asset transaction
with Geron. Closing of the second tranche of the share and warrant purchase is
subject to certain additional conditions; these conditions include the closing
of the stem cell asset transaction. This $5 million investment will be used to
fund BioTime’s $5 million cash contribution to BAC.

Under the terms of its Stock Purchase Agreement with BAC, the investor will
contribute $5 million in cash to BAC in exchange for 2,136,000 shares of BAC
Series B common stock that, upon issuance, will represent approximately 7% of
the BAC common stock outstanding at the closing, plus warrants to purchase
approximately 350,000 additional shares of BAC Series B common stock at an
exercise price of $5.00 per share, with a three year term. Closing of the
financing in BAC will occur in conjunction with the closing of the stem cell
asset transaction with Geron, and is subject to certain conditions, including
the closing of the stem cell asset transaction.

Kaye Scholer LLP and Thompson, Welch, Soroko & Gilbert LLP are acting as legal
counsel to BioTime in connection with the transaction.

Additional Information and Where to Find It

All parties desiring details regarding the transaction are urged to review the
definitive agreement when it is available on the Securities and Exchange
Commission’s (the “SEC’s”) website at www.sec.gov. In connection with the
proposed transaction, BioTime will file with the SEC a proxy statement, and
plans to file with the SEC other documents regarding the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND
OTHER FILED DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Shareholders
will be able to obtain a free-of-charge copy of the proxy statement and other
relevant documents (when available) filed with the SEC from the SEC’s website
at www.sec.gov. Shareholders will also be able to obtain a free-of-charge copy
of the proxy statement and other relevant documents (when available) by
directing a request by mail or email to  BioTime’s Chief Financial Officer at
1301 Harbor Bay Parkway, Alameda, California 94502 or pgarcia@biotimemail.com.
BioTime and Geron and certain of their respective directors and executive
officers may, under the rules of the SEC, be deemed to be “participants” in
the solicitation of proxies from shareholders of BioTime in favor of the share
issuance and other proposals in connection with the proposed transaction.
Information regarding BioTime’s directors and executive officers is contained
in BioTime’s definitive proxy statement filed with the SEC on April 30, 2012.
Information about Geron’s directors and executive officers is set forth in
Geron’s proxy statement for its 2012 Annual Meeting of Stockholders, which was
filed with the SEC on April 24, 2012. The proxy statement and other relevant
documents (when available) filed with the SEC are available free of charge
with the SEC are available free of charge at the SEC’s website at www.sec.gov,
and from Geron by contacting Investor Relations by mail at Geron Corporation,
149 Commonwealth Drive, Suite 2070, Menlo Park, California 94025, Attn:
Investor Relations Department, or by going to Geron’s Investor Relations page
on its corporate website at www.geron.com. Additional information regarding
the interests of such potential participants will be included in the proxy
statement and the other relevant documents filed with the SEC (when
available).

This communication is for informational purposes only and does not constitute
an offer to sell any BAC common stock or warrants or any BioTime common shares
or warrants or a solicitation of any vote or approval, nor is it a substitute
for a prospectus that may be included in a registration statement that may be
filed by BAC or BioTime with the SEC under the Securities Act with respect to
the proposed transaction, or a proxy statement that will be provided to
BioTime shareholders. BioTime and BAC are not offering to sell, or soliciting
an offer to buy, any securities in any state where the offer or sale is not
permitted.

About BioTime, Inc.

BioTime, headquartered in Alameda, Calif., is a biotechnology company focused
on regenerative medicine and blood plasma volume expanders. Its broad platform
of stem cell technologies is enhanced through subsidiaries focused on specific
fields of application. BioTime develops and markets research products in the
fields of stem cells and regenerative medicine, including a wide array of
proprietary PureStem™ cell lines, HyStem^® hydrogels, culture media, and
differentiation kits. BioTime is developing Renevia™ (formerly known as
HyStem^®-Rx), a biocompatible, implantable hyaluronan and collagen-based
matrix for cell delivery in human clinical applications. BioTime's therapeutic
product development strategy is pursued through subsidiaries that focus on
specific organ systems and related diseases for which there is a high unmet
medical need. BioTime's majority owned subsidiary Cell Cure Neurosciences Ltd.
is developing therapeutic products derived from stem cells for the treatment
of retinal and neural degenerative diseases. BioTime's subsidiary OrthoCyte
Corporation is developing therapeutic applications of stem cells to treat
orthopedic diseases and injuries. Another subsidiary, OncoCyte Corporation,
focuses on the diagnostic and therapeutic applications of stem cell technology
in cancer, including the diagnostic product PanC-Dx™ currently being developed
for the detection of cancer in blood samples. ReCyte Therapeutics, Inc. is
developing applications of BioTime's proprietary induced pluripotent stem cell
technology to reverse the developmental aging of human cells to treat
cardiovascular and blood cell diseases. BioTime's subsidiary LifeMap Sciences,
Inc., markets GeneCards^®, the leading human gene database, and has developed
an integrated database suite to complement GeneCards^® that includes the
LifeMap Discovery™ database of embryonic development, stem cell research and
regenerative medicine, and MalaCards, the human disease database. LifeMap is
also marketing BioTime research products. BioTime's lead product, Hextend^®,
is a blood plasma volume expander manufactured and distributed in the U.S. by
Hospira, Inc., and in South Korea by CJ CheilJedang Corporation under
exclusive licensing agreements. Additional information about BioTime can be
found on the web at www.biotimeinc.com.

About BioTime Acquisition Corporation

BioTime Acquisition Corporation is a newly formed wholly owned subsidiary of
BioTime, Inc., through which BioTime plans to pursue opportunities and acquire
assets and businesses in the fields of stem cells and regenerative medicine.

BioTime Forward-Looking Statements

Any statements that are not historical fact (including, but not limited to
statements that contain words such as “will,” “believes,” “plans,”
“anticipates,” “expects,” “estimates”) should also be considered to be
forward-looking statements. Statements in this press release regarding BioTime
or BAC’s plans, expectations or timing relating to BAC’s acquisition of the
stem cell assets and related transactions are forward-looking statements and
these statements involve risks and uncertainties, including, without
limitation, the ability of the parties to close the transaction in a timely
manner or at all, the possibility that conditions to closing of the proposed
transaction, including the approval of BioTime’s shareholders, and the
effectiveness of registration statements to be filed by BioTime and BAC with
the SEC, may not be satisfied, as well as risks inherent in the development
and/or commercialization of potential products, uncertainty in the results of
clinical trials or regulatory approvals, need and ability to obtain future
capital, and maintenance of intellectual property rights. Additional factors
that could cause actual results to differ materially from the results
anticipated in these forward-looking statements are contained in BioTime’s
periodic reports filed with the SEC under the heading “Risk Factors” and and
other filings that BioTime or BAC may make with the SEC. Undue reliance should
not be placed on these forward-looking statements which speak only as of the
date they are made, and the facts and assumptions underlying these statements
may change. Except as required by law, BioTime and BAC each disclaims any
intent or obligation to update these forward-looking statements.

To receive ongoing BioTime corporate communications, please click on the
following link to join our email alert list:
http://phx.corporate-ir.net/phoenix.zhtml?c=83805&p=irol-alerts.

Contact:

BioTime, Inc.
Peter Garcia, 510-521-3390, ext. 367
Chief Financial Officer
pgarcia@biotimemail.com
or
Judith Segall, 510-521-3390, ext. 301
jsegall@biotimemail.com
 
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