July 30 (Bloomberg) -- Geron Corp. said it was cleared by U.S. regulators to proceed with the first human test of an embryonic stem-cell therapy, aimed at patients with spinal-cord injuries. The shares rose 17 percent.
The Food and Drug Administration lifted a clinical hold on the study imposed last August when the company revealed that mice used in experimental work had developed cysts, Geron said in a statement. The company may start recruiting patients with new spinal cord injuries in about one month, said Thomas Okarma, Geron’s president and chief executive officer, in a telephone interview today.
The FDA’s action will allow the company to proceed with a long-awaited milestone -- the first authorized clinical trial in the world using stem cells derived from human embryos. The approval comes after almost a year of Geron’s testing and genetic analysis to resolve FDA questions, and paves the way for future trials.
“This is an important milestone for the whole field to have an embryonic stem cell therapeutic in clinical trials,” said Alan Trounson, president of the California Institute for Regenerative Medicine, the state stem-cell funding agency, in an e-mailed statement. Geron hasn’t received any funding from the agency.
Geron rose 83 cents, or 17 percent, to $5.63 at 4 p.m. in Nasdaq stock market composite trading. The shares fell 35 percent in the last twelve months.
New Therapy Type
The FDA action strengthens Geron’s ability to start similar trials in the future, Okarma said. It also leaves regulators with a better grasp of how to review a completely new type of therapy.
“It’s helped both of us to get up the learning curve together,” Okarma said. “We’ve brought the FDA to a higher level of understanding which has been very positive and mutually beneficial. And phew, it’s about time.”
The FDA originally gave the go-ahead to Geron to start the trial on Jan. 23, 2009, three days after Barack Obama was sworn in as U.S. president. The approval appeared to turn the corner on the policies of the administration of former President George W. Bush, who limited federal funding for embryonic stem-cell research, discouraging investment in the technology, said Stephen Brozak, an analyst with WBB Securities in New York.
The Bush administration’s objections to embryonic stem-cell research, followed by the cautious approach the FDA took in reviewing Geron’s clinical trial proposal, served to strengthen Geron while keeping other companies out of the field, Brozak said.
“They had the entire U.S. government operating opposed to their interests,” Brozak said in a telephone interview today. “There is no single scientific endeavor that has more scrutiny than stem cells and they are the first through that breach.”
Brozak has a “strong buy” recommendation on Geron and a target price of $19, the highest of any analyst. His firm has also done investment banking for Geron.
If patients are helped by the stem-cell treatment in Geron’s pilot trial and the study is seen as a success, Geron’s shares are likely to soar with “volume of biblical proportions,” Brozak said.
In that scenario, the company’s biggest challenge may be to fend off takeover bids, he said.
Two Other Companies
Two other U.S. companies are working with embryonic stem cells. Advanced Cell Technology of Marlborough, Massachusetts, is awaiting FDA approval to start a clinical trial in patients with Stargardt’s macular dystrophy, an eye disorder that causes severe vision loss. The company announced July 28 it had provided the FDA with additional information the agency needed to review the company’s application to start a trial.
Advanced Cell expects the agency to approve the application or ask for new information within a month, William Caldwell, Advanced Cell’s chief executive officer, said in a July 28 telephone interview.
The company plans to start a 12-patient trial in the last three months of this year and has enough cash to run the trial, Caldwell said. Advanced Cell can tap into lines of credit to run a second-stage trial with 40 to 80 patients if the first one shows the cells are safe, he said.
Advanced Cell shares rose less than 1 penny to 7.4 cents in over-the-counter trading.
Viacyte, formerly known as Novocell Inc., a closely held San Diego company, is working on methods of turning embryonic stem cells into insulin-secreting cells for the treatment of diabetes.
Geron has developed a process to make embryonic stem cells into glial cells, a type of nerve cell that helps support the work of neurons. In spinal cord injuries, nerve cells can no longer transmit information down the spine, resulting in paralysis.
Geron’s clinical trial will start with patients who have badly damaged, not severed, their spinal cords in the region that starts below the neck. The planned protocol would allow the company to inject a small number of stem cells, then increase the dosage in later patients.
If this effort is successful and ongoing work in animals continues to show promise, the company may also be allowed to treat patients with injuries to their spinal cord in the cervical region above the shoulders, Okarma said.
Geron wants to conduct future trials in patients with other neurological conditions including multiple sclerosis and Alzheimer’s disease, Okarma said. The company also is developing heart cells made from embryonic cells to treat patients with heart disease.
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