Geron Buys Scottish Firm, Spinoff of Dolly’s Maker
In a marriage of powerful but controversial technologies, Geron Corp. said Tuesday that it has acquired Roslin Bio-Med, a spinoff of the Scottish institute responsible for the cloned sheep, Dolly.
The goal is to combine the expertise of the two small biotechnology companies to clone human cells that can be used to repair damaged hearts, livers and kidneys--and perhaps one day grow replacement organs for transplantation.
Menlo Park, Calif.-based Geron, which gained attention last year by growing human embryo and fetal cells in test tubes, agreed to purchase Roslin Bio-Med for 2.1 million shares of stock, worth about $25.7 million at Tuesday’s closing price. Geron shares closed Tuesday at $12.25 on Nasdaq, down 13 cents.
Geron also will invest an additional $20 million in research to be conducted at the Roslin Institute in Roslin, Scotland, during the next six years. In return, Geron will acquire rights to the cloning method that produced Dolly--a process that takes the DNA from an adult animal and inserts it into an egg cell or ovum to create an offspring genetically identical to the adult.
The Roslin Institute is an independent, nonprofit research institute funded by the Scottish government, affiliated with the University of Edinburgh. Roslin Bio-Med is a year-old biotech start-up founded by the institute and 3i Group, one of Europe’s biggest venture capital firms in the biotech arena. Roslin Bio-Med holds exclusive license to the cloning that led to Dolly.
Another company based in Britain, PPL Therapeutics, continues to hold an exclusive license to the Roslin cloning technique when applied to producing human proteins in animal milk, a low-cost approach to manufacturing human hormones and blood factors for use as pharmaceuticals.
Geron executives acknowledge that there are many years of laboratory experiments ahead even before replacement cell therapy, which is far simpler than growing whole organs, can be tested. Even if the research moves ahead quickly, the first human trials of tissue repair using the combined technologies are at least five years away, says Thomas Okarma, Geron’s vice president for research.
He and others at the company emphasize that neither Geron nor its new Scottish subsidiary, now called Geron Bio-Med, has any plans to clone a human.
Hambrecht & Quist analyst Richard A. van den Broek said the newly expanded company holds promising technology, but returns are not likely soon. Thomas J. Dietz, an analyst with Pacific Growth Equities, agreed. “It is extremely interesting technology, but it is years and years away from meeting an unmet medical need. They have a longer time horizon than most investors are looking at today,” Dietz said.
Geron, which employs 85 scientists, has seen sharp rises in its stock in the past with the announcement of scientific advances, only to watch the share price slowly drop off.
When Geron announced in November that it had found a way to grow embryonic and fetal cells in the laboratory, it not only raised the price of its shares, but also triggered an international debate about the ethics of such research--just as Roslin’s cloning of Dolly in 1996 raised questions about the cloning of humans.
