) announced that it has signed an Asset Contribution Agreement
) and BioTime's recently formed subsidiary, BioTime Acquisition
Per the terms of the agreement, Geron's stem cell assets will
be divested to BAC on the closing of the deal. The deal is
scheduled to close by September 30, 2013.
Once the deal is closed, Geron will provide BAC with the
intellectual property and other assets related to its
discontinued human embryonic stem cell programs. BioTime will
provide BAC with cash ($5 million), shares (8.9 million),
warrants to purchase 8 million shares at a price of $5.00 per
share, rights to use certain human embryonic stem cell lines, and
minority stakes in two subsidiaries of BioTime.
Meanwhile, Geron stockholders would have a 21% stake in BAC.
Geron will also be entitled to receive royalties on the sale of
products covered by the patents acquired by BAC from Geron.
Apart from Geron, BioTime would have a 72% stake in BAC and
the remaining 7% would be owned by a private investor (for an
investment of $5 million). BioTime will also have warrants which
would allow the company to increase its stake in BAC by 2%.
However, this would lead to a 2% dilution in Geron's stake.
Geron, an erstwhile leader in stem cell research, had
announced its intention to exit the stem cell therapy market in
mid-Nov 2011. The company's decision was based on a strategic
Neutral on Geron
We currently have a Neutral recommendation on Geron, which
carries a Zacks Rank #2 (Buy). The company suffered two pipeline
setbacks in 2012 - the first when its phase II breast cancer
study with imetelstat had to be discontinued and the second with
the scrapping of the second candidate in its pipeline - GRN1005.
The company now has only imetelstat in its pipeline. Although the
company presented promising results on the candidate in December
2012, we prefer to remain on the sidelines until we gain more
visibility on the late-stage development potential of
Currently, biopharma companies like
Peregrine Pharmaceuticals, Inc.
Palatin Technologies, Inc,
) carry a Zacks Rank #1 (Strong Buy).
(BTX): ETF Research Reports
GERON CORP (GERN): Free Stock Analysis Report
PEREGRINE PHARM (PPHM): Free Stock Analysis
PALATIN TECH (PTN): Free Stock Analysis
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