Geron Corp., the company that started the first U.S.-approved trial of human embryonic stem cells, fell the most in more than 11 years after research costs and regulatory complexities caused it to end the program.
Geron will focus resources on development of its cancer drugs, the Menlo Park, California-based company said in a statement yesterday. It 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.
The first trial testing Geron’s embryonic stem-cell therapy in spinal-cord injury patients began 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,” Scarlett 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 20 percent to $1.75 at the close in New York, its biggest single-day decline since March 2000. The shares have fallen 66 percent this year.
Geron hasn’t 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. Geron is in talks with a number of potential partners, the CEO said today on a conference call with analysts and investors. He declined to comment further.
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 Marlborough, Massachusetts-based Advanced Cell Technology Inc., 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 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.”