From cancer research to the technology behind cloning, biopharmaceutical company Geron seeks to commercialize its research. Though in its infancy, the company is driving a business plan which it believes can lead to cancer treatment, human cells for testing, and growing your own organs for transplants -- products for three almost unimaginable markets. Partnerships with Roche and Celera are a promising start for this young company, which reported its second-quarter losses today. Investors should watch for more signs of future promise in the coming quarters.
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The year-to-year improvement is a little misleading, however. Last year the company acquired Roslin Bio-Med, a commercial arm of Scotland's Roslin Institute (famous for cloning Dolly, the sheep, and other farm friends) for $23 million. Eliminating that expense, this year's losses would have represented an increase over last year. But these numbers are meaningless for a biotech company like Geron at this stage of development.
Immortal cells
Geron works with the stuff of your biotech dreams: telomerase, human pluripotent stem cells, and nuclear transfer. In plain English, telomerase is the enzyme associated with the life and death of cells. You have telomeres at the ends of your chromosomes that are like the plastic tips that keep your shoelaces from unraveling (if you don't have Velcro).
The telomeres shorten as your cells age, and eventually the cells stop dividing. Adding telomerase elongates the telomeres and makes the cells immortal. Yes, I said immortal, and it's worked over and over in Geron's lab. So it makes sense that in cancer, telomerase apparently never gets turned off and the cells grow without end, and Geron seeks to turn telomerase off in cancer cells but on elsewhere.
Grow your own
Embryos contain stem cells, undifferentiated cells from which every cell in the body can be made. This power naturally leads to their more technical name, "pluripotent" embryonic stem cells. In the undifferentiated state, they have telomerase. Once they differentiate, the telomerase is turned off. Geron wants to use its expertise in telomerase and stem cells for two powerful applications: First, to grow cells for research and testing, and second, to use your own stem cells to grow replacement organs that your body won't reject. Way cool.
These are two humungous plans. I mean, heart or liver transplant rejection? No more. You can grow your own. And think of the revolution for the drug testing and approval process. Pharmaceutical houses can test cloned human cells and organs before any human is actually exposed. The efficiencies for drug development and the Food and Drug Administration (FDA) approval process are mind-boggling.
This is why quarter-to-quarter reports for Geron mean little now, especially when it has $74 million in cash and cash equivalents to fund its sci-fi lab work at least to the end of 2002.
Investors should watch the growth of partnerships, such as Geron's with Roche Holdings, Pharmacia (NYSE: PHA), and especially June's deal with Celera Genomics (Nasdaq: CRA), with its undisclosed numbers. These are the deals that Geron depends on to stay afloat while it works with its partners to develop and commercialize products. Foolish investors should carefully scrutinize the company's 10-Q and 10-K reports for all news of the partnerships and products, and be prepared to wait for real signs that the laboratory-replicated dreams might pay off.
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