Geron Corp. (GERN), the company that started the first U.S.-approved trial of human embryonic stem cells, fell as much as 23 percent in early trading after research costs and regulatory complexities caused it to end the program.
The company will focus resources on development of its cancer drugs, Geron said in a statement yesterday. Geron, based in Menlo Park, California, will cut 66 full-time jobs, or 38 percent of its workforce, and take a cash charge of $5 million in the fourth quarter and $3 million in the first half of 2012.
Geron began the first trial testing its embryonic stem-cell therapy in spinal-cord injury patients last April. In October, it reported that none of the four patients in the trial had experienced negative reactions to the therapy, consisting of two million cells injected into their spines at the damaged site. Geron Chief Executive Officer John Scarlett said financial concerns were at the heart of company’s decision.
“We’re not doing this because we were souring on the field, or as a result of any problems -- we have not had any safety issues at all,” John Scarlett, Geron’s chief executive officer, said in a telephone interview yesterday. “We need to focus our resources on advancing these phase 2 clinical trials of our two cancer drugs.”
Geron dropped as much as 50 cents to $1.70 and was down 15 percent to $1.87 at 8:12 a.m. New York time, before the opening of regular trading.
Geron hasn’t yet reported on the effectiveness of the treatment, dubbed GRNOPC1. The company will close the study to new patients and is looking for partners to take it over, Scarlett said.
The company has two cancer therapies in or beginning the second of three trials generally required for U.S. approval. One treatment, called Imetelstat, is being tested in non-small cell lung cancer, breast cancer, the blood disorder thrombocythemia and multiple myeloma. The other medicine, GRN1005, is being tested against brain metastases stemming from non-small cell lung cancer as well as from breast cancer.
“There’s a relatively tough economic environment -- it’s certainly uncertain,” Scarlett said.
The company will end 2011 with $150 million in cash, according to the statement.
Robert Lanza, chief scientific officer of Advanced Cell Technology Inc. (ACTC), the second company to win permission from the U.S. Food and Drug Administration to test human embryonic stem cells in people, said the news wasn’t surprising, given the small patient population affected with spinal cord injuries.
“It was a very difficult choice to go in and treat spinal cord injury,” Lanza said in an interview. “There was considerable concern in the scientific community that that might not have been the ideal first indication.”
Advanced Cell, based in Marlborough, Massachusetts, is testing the use of stem cells in patients with macular degeneration, a leading cause of vision loss.
Geron has “labored on the stem cell front for the last 18 years,” Steve Brozak, an analyst with WBB Securities in Clark, New Jersey, said in a telephone interview yesterday. “The ground zero for embryonic stem-cell research is now packaging it for sale.”
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