Geron Shares Rise 28% on Stem-Cell Research

Shares of struggling Geron Corp. skyrocketed 28% on Tuesday after it published research indicating that it could produce liver cells from stem cells in a way that may help scientists test drugs for liver toxicity.

In the journal Cell Transplantation, the biotech company described how its scientists produce hepatocytes, the basic functional cells of the liver, from human embryonic stem cells. Hepatocytes have multiple characteristics, including the ability to metabolize enzymes.

Geron’s scientists have found that certain proteins in liver cells also are produced by those derived from stem cells. The enzymes can be used to test whether a potential drug can be metabolized by the liver or whether it is toxic.

If Geron’s method is successful, scientists could reproduce large numbers of liver cells that would enable drug companies to test drugs for toxicity much earlier in the development process. This would potentially cut down the expense of taking drugs that turn out to be toxic through clinical trials.

The news pushed the stock price up $1.46 to $6.75 on Nasdaq.

The company, based in Menlo Park, Calif., is widely acknowledged as a leader in human embryonic stem cells and is often cited as owning the cloning technology that created Dolly the sheep. However, as with many biotech companies, Geron has struggled.

In fact, on Jan. 21, Geron announced that 40 researchers and support staff were being laid off “in order to concentrate its resources” on developing a cancer drug and stem-cell related therapies.

That move appeared to pay off when on March 18 Geron announced that new research showed that the company’s experimental cancer vaccine could be effective against all types of cancer. Its shares at that time soared nearly $3.