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Embryonic stem cell pioneers receive offer for abandoned programme from former executives

22 October 2012
Appeared in BioNews 678

Two former CEOs of US drug company Geron are bidding to revive its stem cell assets. Dr Michael West and Dr Thomas Okarma, who now work for BioTime, issued an open letter to Geron's shareholders putting forward an offer for the company's stem cell research programme, which has been suspended since 2011.

Dr West founded Geron in 1990, where he was director and vice-president until 1998 when he moved to Advanced Cell Technology. He was appointed CEO of BioTime, a biotechnology company focusing on regenerative medicine based in California, USA in 2007. Dr Okarma was CEO of Geron between 1999 and 2011. However, following Geron's move away from stem cell research, Dr Okarma joined Biotime in September 2012.

Both men have spent much of their careers trying to bring products derived from embryonic stem cells to the clinic. The letter to Geron's shareholders states they see this bid as an opportunity to 'put the now dormant Geron stem cell assets back on track'.

The proposal outlines an arrangement in which certain stem cell assets owned by BioTime would be combined with those of Geron and controlled by a new publicly traded company called BioTime Acquisition (BAC), to be led by Dr Okarma.

Under the proposal, Geron shareholders would receive a 21.4 percent stake in the new company and subscription rights to purchase further stock in BAC, with the potential to increase their ownership up to 45 percent. BioTime would contribute $40 million in BioTime common shares, together with BioTime warrants valued at $13 million and shares in BioTimes subsidiaries.

Although the final decision rests with Geron's board of directors, the letter urges shareholders to contact the board in a bid to encourage them to accept the proposal. The letter reminds shareholders that 'nearly a year has now passed, and Geron has not announced any transaction that would provide value to either Geron or its shareholders from those stem cell assets'.

Geron is yet to respond. However, the company's share prices rose following the announcement, leading to speculation that Geron's investors are interested in negotiating a deal.

Geron is currently focussed on developing anti-cancer drugs, but it was previously an important player in stem cell research and had pioneered development into stem cell based treatment for spinal cord injury. Dr West and Dr Okarma believe that acceptance of their bid would 'speed the development and commercialisation of innovative new products to treat degenerative diseases'.

SOURCES & REFERENCES
BioTime, Inc. Issues Open Letter to Shareholders of Geron Corporation
BioTime (press release) |  18 October 2012
BioTime makes bid for Geron's stem cell assets
California Stem Cell Report (blog) |  18 October 2012
BioTime makes offer for Geron stem cell assets
CBS News |  18 October 2012
Former Geron execs bid for abandoned stem cell program
Nature News Blog |  18 October 2012
Stem Cell Divestiture May Benefit Geron Shareholders More than the Company
Propthink |  18 October 2012
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