Geron Gives Reason for FDA Hold on Stem-Cell Trial; Shares Rise
By Rob Waters
Aug. 27 (Bloomberg) — Geron Corp. rose as much as 5 percent in Nasdaq trading after saying a hold placed by U.S. regulators on its plan for the first human embryonic stem-cell study was due to “non-proliferative” cysts in test animals.
The Food and Drug Administration cleared Geron in January to test its stem-cell treatment in patients with spinal cord injuries. The company, based in Menlo Park, California, announced the regulatory hold on Aug. 18.
The microscopic cysts seen in an early experiment in a few animals that received the cell-based treatment, GRNOPC1, were found in larger numbers of animals in a recent study. The cysts weren’t linked to complications, the company said in a statement today. A more recent study of rats using a new batch of test chemicals showed no cysts, the company said.
Stephen Brozak, an analyst with WBB Securities LLC in Westfield, New Jersey, said investors would be reassured that the animals didn’t develop a type of tumor known as a teratoma.
“I think it provides people with a reasonable explanation,” Brozak said. “Everybody was afraid of the T- word, teratomas, and it clearly wasn’t that.” Brozak has a “strong buy” rating on the shares.
Geron rose 12 cents, or 1.7 percent, to $7.05 at 11 a.m. New York time in Nasdaq Stock Market composite trading, and traded as high today as $7.28. The shares fell 10 percent after the company announced the FDA’s hold on Aug. 18.