As filed with the Securities and Exchange Commission on October 30, 2007
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GERON CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
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Delaware 75-2287752
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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230 Constitution Drive
Menlo Park, California 94025
(650) 473-7700
(Address, Including Zip Code and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
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Thomas B. Okarma
President and Chief Executive Officer
Geron Corporation
230 Constitution Drive
Menlo Park, California 94025
(650) 473-7700
(Name, Address, Including Zip Code and Telephone Number,
Including Area Code, of Agent for Service)
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Copies to:
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Alan C. Mendelson, Esq.
Latham & Watkins LLP
140 Scott Drive
Menlo Park, California 94025
(650) 328-4600
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Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If this Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become effective upon
filing with the Commission pursuant to Rule 462(e) under the Securities Act,
check the following box. |_|
If this Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the
Securities Act, check the following box. |_|
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CALCULATION OF REGISTRATION FEE
===========================================================================================
Proposed Proposed
Amount to Maximum Maximum Amount of
Title of Securities be Offering Price Aggregate Registration
to be Registered Registered(1) per share Offering Price Fee
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Common Stock, par
value $.001 per
share, issuable
upon exercise of
warrants 50,000 shares $7.35(2) $367,500 $11.28 (3)
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(1) In the event of a stock split, stock dividend, or similar transaction
involving Geron's common stock, in order to prevent dilution, the number of
shares registered shall automatically be increased to cover the additional
shares in accordance with Rule 416(a) under the Securities Act.
(2) The offering price is estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c) and based upon the average
of the high and low prices reported by Nasdaq Global Market on October 26,
2007.
(3) Calculated in accordance with Rule 457(o) under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDER MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED OCTOBER 30, 2007
UP TO 50,000 SHARES OF
GERON CORPORATION
COMMON STOCK
Our common stock is traded on the Nasdaq Global Market under the symbol
"GERN." On October 26, 2007, the closing price of our common stock was $7.45.
This prospectus relates to the sale of up to 50,000 shares of our common
stock by Lazard Freres & Co. LLC. We will not receive any of the proceeds from
the sale of these shares covered by this prospectus.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 1.
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Neither the Securities and Exchange Commission (the "SEC") nor any state
securities commission has approved or disapproved of these securities or passed
upon the accuracy or adequacy of the prospectus. Any representation to the
contrary is a criminal offense.
----------------------
The date of this prospectus is October __, 2007.
TABLE OF CONTENTS
Page
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ABOUT GERON..................................................................1
RISK FACTORS.................................................................1
FORWARD-LOOKING STATEMENTS..................................................17
USE OF PROCEEDS.............................................................17
DESCRIPTION OF OUR COMMON STOCK.............................................17
SELLING STOCKHOLDER.........................................................18
PLAN OF DISTRIBUTION........................................................19
LEGAL MATTERS...............................................................20
EXPERTS.....................................................................20
LIMITATION ON LIABILITY AND DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES..............................20
WHERE YOU CAN FIND MORE INFORMATION.........................................20
DOCUMENTS WE HAVE INCORPORATED BY REFERENCE.................................21
ABOUT GERON
Geron is developing first-in-class biopharmaceuticals for the treatment of
cancer and chronic degenerative diseases, including spinal cord injury, heart
failure and diabetes. We are advancing telomerase targeted therapies, including
an anti-cancer drug and a cancer vaccine, through multiple clinical trials. We
are also the world leader in the development of human embryonic stem cell-based
therapeutics, with our spinal cord injury treatment anticipated to be the first
such product to enter clinical development.
We were incorporated in 1990 under the laws of Delaware. Our principal
executive offices are located at 230 Constitution Drive, Menlo Park, California
94025 and our telephone number is (650) 473-7700.
RISK FACTORS
Our business is subject to various risks, including those described below.
You should carefully consider these risk factors, together with all of the other
information included in this Registration Statement. Any of these risks could
materially adversely affect our business, operating results and financial
condition.
OUR BUSINESS IS AT AN EARLY STAGE OF DEVELOPMENT.
Our business is at an early stage of development, in that we do not yet have
product candidates in late-stage clinical trials or on the market. We have begun
clinical testing of our lead anti-cancer drug, GRN163L, in patients with chronic
lymphocytic leukemia, solid tumor malignancies and non-small cell lung cancer.
We have begun clinical testing of our telomerase cancer vaccine, GRNVAC1, in
patients with acute myelogenous leukemia. We have no other product candidates in
clinical testing. Our ability to develop product candidates that progress to and
through clinical trials is subject to our ability to, among other things:
o succeed in our research and development efforts;
o select therapeutic compounds or cell therapies for development;
o obtain required regulatory approvals;
o manufacture product candidates; and
o collaborate successfully with clinical trial sites, academic
institutions, physician investigators, clinical research organizations
and other third parties.
Potential lead drug compounds or other product candidates and technologies
will require significant preclinical and clinical testing prior to regulatory
approval in the United States and other countries. Our product candidates may
prove to have undesirable and unintended side effects or other characteristics
adversely affecting their safety, efficacy or cost-effectiveness that could
prevent or limit their commercial use. In addition, our product candidates may
not prove to be more effective for treating disease or injury than current
therapies. Accordingly, we may have to delay or abandon efforts to research,
develop or obtain regulatory approvals to market our product candidates. In
addition, we will need to determine whether any of our potential products can be
manufactured in commercial quantities at an acceptable cost. Our research and
development efforts may not result in a product that can be approved by
regulators or marketed successfully. Because of the significant scientific,
regulatory and commercial milestones that must be reached for any of our
development programs to be successful, any program may be abandoned, even after
we have expended significant resources on the program, such as our investments
in telomerase technology and human embryonic stem cells, which could cause a
sharp drop in our stock price.
The science and technology of telomere biology and telomerase, human
embryonic stem cells and nuclear transfer are relatively new. There is no
precedent for the successful commercialization of therapeutic product candidates
based on our technologies. These development programs are therefore particularly
risky. In addition, we, our licensees or our collaborators must undertake
significant research and development activities to develop product candidates
based on our technologies, which will require additional funding and may take
years to accomplish, if ever.
1
WE HAVE A HISTORY OF LOSSES AND ANTICIPATE FUTURE LOSSES, AND CONTINUED LOSSES
COULD IMPAIR OUR ABILITY TO SUSTAIN OPERATIONS.
We have incurred operating losses every year since our operations began in
1990. As of September 30, 2007, our accumulated deficit was approximately $428.4
million. Losses have resulted principally from costs incurred in connection with
our research and development activities and from general and administrative
costs associated with our operations. We expect to incur additional operating
losses and, as our development efforts and clinical testing activities continue,
our operating losses may increase in size.
Substantially all of our revenues to date have been research support payments
under collaboration agreements and revenues from our licensing arrangements. We
may be unsuccessful in entering into any new corporate collaboration or license
agreement that results in revenues. We do not expect that the revenues generated
from these arrangements will be sufficient alone to continue or expand our
research or development activities and otherwise sustain our operations.
While we receive royalty revenue from licenses of diagnostic product
candidates, telomerase-immortalized cell lines and other licensing activities,
we do not currently expect to receive sufficient royalty revenues from these
licenses to sustain our operations. Our ability to continue or expand our
research and development activities and otherwise sustain our operations is
dependent on our ability, alone or with others, to, among other things,
manufacture and market therapeutic products.
We also expect to experience negative cash flow for the foreseeable future as
we fund our operating losses and capital expenditures. This will result in
decreases in our working capital, total assets and stockholders' equity, which
may not be offset by future financings. We will need to generate significant
revenues to achieve profitability. We may not be able to generate these
revenues, and we may never achieve profitability. Our failure to achieve
profitability could negatively impact the market price of our common stock. Even
if we do become profitable, we cannot assure you that we would be able to
sustain or increase profitability on a quarterly or annual basis.
WE WILL NEED ADDITIONAL CAPITAL TO CONDUCT OUR OPERATIONS AND DEVELOP OUR
PRODUCTS, AND OUR ABILITY TO OBTAIN THE NECESSARY FUNDING IS UNCERTAIN.
We will require substantial capital resources in order to conduct our
operations and develop our product candidates, and we cannot assure you that our
existing capital resources, interest income and equipment financing arrangement
will be sufficient to fund our current and planned operations. The timing and
degree of any future capital requirements will depend on many factors,
including:
o the accuracy of the assumptions underlying our estimates for our
capital needs in 2007 and beyond;
o the magnitude and scope of our research and development programs;
o the progress we make in our research and development programs,
preclinical development and clinical trials;
o our ability to establish, enforce and maintain strategic arrangements
for research, development, clinical testing, manufacturing and
marketing;
o the number and type of product candidates that we pursue;
2
o the time and costs involved in obtaining regulatory approvals; and
o the costs involved in preparing, filing, prosecuting, maintaining,
defending and enforcing patent claims.
We do not have any committed sources of capital. Additional financing through
strategic collaborations, public or private equity financings, capital lease
transactions or other financing sources may not be available on acceptable
terms, or at all. The receptivity of the public and private equity markets to
proposed financings is substantially affected by the general economic, market
and political climate and by other factors which are unpredictable and over
which we have no control. Additional equity financings, if we obtain them, could
result in significant dilution to stockholders. Further, in the event that
additional funds are obtained through arrangements with collaborative partners,
these arrangements may require us to relinquish rights to some of our
technologies, product candidates or proposed products that we would otherwise
seek to develop and commercialize ourselves. If sufficient capital is not
available, we may be required to delay, reduce the scope of or eliminate one or
more of our programs, any of which could have a material adverse effect on our
business.
WE DO NOT HAVE EXPERIENCE AS A COMPANY CONDUCTING LARGE-SCALE CLINICAL TRIALS,
OR IN OTHER AREAS REQUIRED FOR THE SUCCESSFUL COMMERCIALIZATION AND MARKETING OF
OUR PRODUCT CANDIDATES.
We will need to receive regulatory approvals for any product candidates
before they may be marketed and distributed. Such approval will require, among
other things, completing carefully controlled and well-designed clinical trials
demonstrating the safety and efficacy of each product candidate. This process is
lengthy, expensive and uncertain. We have no experience as a company in
conducting large-scale, late stage clinical trials, and our experience with
early-stage clinical trials with small numbers of patients is limited. Such
trials would require either additional financial and management resources, or
reliance on third-party clinical investigators, clinical research organizations
(CROs) or consultants. Relying on third-party clinical investigators or CROs may
force us to encounter delays that are outside of our control.
We also do not currently have marketing and distribution capabilities for our
product candidates. Developing an internal sales and distribution capability
would be an expensive and time-consuming process. We may enter into agreements
with third parties that would be responsible for marketing and distribution.
However, these third parties may not be capable of successfully selling any of
our product candidates.
BECAUSE WE OR OUR COLLABORATORS MUST OBTAIN REGULATORY APPROVALS TO MARKET OUR
PRODUCTS IN THE UNITED STATES AND OTHER COUNTRIES, WE CANNOT PREDICT WHETHER OR
WHEN WE WILL BE PERMITTED TO COMMERCIALIZE OUR PRODUCTS.
Federal, state and local governments in the United States and governments in
other countries have significant regulations in place that govern many of our
activities and may prevent us from creating commercially viable products from
our discoveries.
The regulatory process, particularly for biopharmaceutical product candidates
like ours, is uncertain, can take many years and requires the expenditure of
substantial resources. Any product candidate that we or our collaborators
develop must receive all relevant regulatory agency approvals before it may be
marketed in the United States or other countries. Biological drugs and
non-biological drugs are rigorously regulated. In particular, human
pharmaceutical therapeutic product candidates are subject to rigorous
preclinical and clinical testing and other requirements by the Food and Drug
Administration (FDA) in the United States and similar health authorities in
other countries in order to demonstrate safety and efficacy. Because certain of
our product candidates involve the application of new technologies or are based
upon a new therapeutic approach, they may be subject to substantial additional
review by various government regulatory authorities, and, as a result, the
process of obtaining regulatory approvals for them may proceed more slowly than
for product candidates based upon more conventional technologies. We may never
obtain regulatory approval to market our product candidates.
3
Data obtained from preclinical and clinical activities is susceptible to
varying interpretations that could delay, limit or prevent regulatory agency
approvals. In addition, delays or rejections may be encountered as a result of
changes in regulatory agency policy during the period of product development
and/or the period of review of any application for regulatory agency approval
for a product candidate.
Delays in obtaining regulatory agency approvals could:
o significantly harm the marketing of any products that we or our
collaborators develop;
o impose costly procedures upon our activities or the activities of our
collaborators;
o diminish any competitive advantages that we or our collaborators may
attain; or
o adversely affect our ability to receive royalties and generate
revenues and profits.
Even if we commit the necessary time and resources, the required regulatory
agency approvals may not be obtained for any product candidates developed by us
or in collaboration with us. If we obtain regulatory agency approval for a new
product, this approval may entail limitations on the indicated uses for which it
can be marketed that could limit the potential commercial use of the product.
Approved products and their manufacturers are subject to continual review,
and discovery of previously unknown problems with a product or its manufacturer
may result in restrictions on the product or manufacturer, including withdrawal
of the product from the market. The sale by us or our collaborators of any
commercially viable product will be subject to government regulation from
several standpoints, including the processes of:
o manufacturing;
o advertising and promoting;
o selling and marketing;
o labeling; and
o distribution.
If, and to the extent that, we are unable to comply with these regulations,
our ability to earn revenues will be materially and negatively impacted.
Failure to comply with regulatory requirements can result in severe civil and
criminal penalties, including but not limited to:
o recall or seizure of products;
o injunction against manufacture, distribution, sales and marketing; and
o criminal prosecution.
The imposition of any of these penalties could significantly impair our
business, financial condition and results of operations.
ENTRY INTO CLINICAL TRIALS WITH ONE OR MORE PRODUCT CANDIDATES MAY NOT RESULT IN
ANY COMMERCIALLY VIABLE PRODUCTS.
We may never generate revenues from product sales because of a variety of
risks inherent in our business, including the following risks:
o clinical trials may not demonstrate the safety and efficacy of our
product candidates;
4
o completion of clinical trials may be delayed, or costs of clinical
trials may exceed anticipated amounts;
o we may not be able to obtain regulatory approval of our product
candidates, or may experience delays in obtaining such approvals;
o we may not be able to manufacture our product candidates economically
on a commercial scale;
o we and any licensees of ours may not be able to successfully market
our products;
o physicians may not prescribe our products, or patients or third party
payors may not accept such products;
o others may have proprietary rights which prevent us from marketing our
products; and
o competitors may sell similar, superior or lower-cost products.
With respect to our telomerase cancer vaccine product candidate, clinical
testing has been limited to early-stage testing for a small number of patients.
The results of this testing may not be indicative of successful outcomes in
later stage trials. We have begun clinical testing of our telomerase inhibitor
compound, GRN163L. This is the first clinical trial for this product. We have
not commenced clinical testing for any other product candidate.
RESTRICTIONS ON THE USE OF HUMAN EMBRYONIC STEM CELLS, POLITICAL COMMENTARY
AND THE ETHICAL AND SOCIAL IMPLICATIONS OF RESEARCH INVOLVING HUMAN EMBRYONIC
STEM CELLS COULD PREVENT US FROM DEVELOPING OR GAINING ACCEPTANCE FOR
COMMERCIALLY VIABLE PRODUCTS BASED UPON SUCH STEM CELLS AND ADVERSELY AFFECT
THE MARKET PRICE OF OUR COMMON STOCK.
Some of our most important programs involve the use of stem cells that are
derived from human embryos. The use of human embryonic stem cells gives rise to
ethical and social issues regarding the appropriate use of these cells. Our
research related to human embryonic stem cells may become the subject of adverse
commentary or publicity, which could significantly harm the market price for our
common stock.
Some political and religious groups have voiced opposition to our technology
and practices. We use stem cells derived from human embryos that have been
created for in vitro fertilization procedures but are no longer desired or
suitable for that use and are donated with appropriate informed consent for
research use. Many research institutions, including some of our scientific
collaborators, have adopted policies regarding the ethical use of human
embryonic tissue. These policies may have the effect of limiting the scope of
research conducted using human embryonic stem cells, thereby impairing our
ability to conduct research in this field.
In addition, the United States government and its agencies have until
recently refused to fund research which involves the use of human embryonic
tissue. President Bush announced on August 9, 2001 that he would permit federal
funding of research on human embryonic stem cells using the limited number of
embryonic stem cell lines that had already been created, but relatively few
federal grants have been made so far. The President's Council on Bioethics
monitors stem cell research, and the guidelines and regulations it recommends
may include restrictions on the scope of research using human embryonic or fetal
tissue. Certain states are considering, or have in place, legislation relating
to stem cell research, including California whose voters approved Proposition 71
to provide state funds for stem cell research in November 2004. It is not yet
clear what, if any, affect such state actions may have on our ability to
commercialize stem cell products. In the United Kingdom and other countries, the
use of embryonic or fetal tissue in research (including the derivation of human
embryonic stem cells) is regulated by the government, whether or not the
research involves government funding.
5
Government-imposed restrictions with respect to use of embryos or human
embryonic stem cells in research and development could have a material adverse
effect on us, including:
o harming our ability to establish critical partnerships and
collaborations;
o delaying or preventing progress in our research and development; and
o causing a decrease in the price of our stock.
IMPAIRMENT OF OUR INTELLECTUAL PROPERTY RIGHTS MAY ADVERSELY AFFECT THE
VALUE OF OUR TECHNOLOGIES AND PRODUCT CANDIDATES AND LIMIT OUR ABILITY
TO PURSUE THEIR DEVELOPMENT.
Protection of our proprietary technology is critically important to our
business. Our success will depend in part on our ability to obtain and enforce
our patents and maintain trade secrets, both in the United States and in other
countries. In the event that we are unsuccessful in obtaining and enforcing
patents, our business would be negatively impacted. Further, our patents may be
challenged, invalidated or circumvented, and our patent rights may not provide
proprietary protection or competitive advantages to us.
The patent positions of pharmaceutical and biopharmaceutical companies,
including ours, are highly uncertain and involve complex legal and technical
questions. In particular, legal principles for biotechnology patents in the
United States and in other countries are evolving, and the extent to which we
will be able to obtain patent coverage to protect our technology, or enforce
issued patents, is uncertain. In the U.S., recent court decisions in patent
cases, significant amendments to the regulations governing the process of
obtaining patents, as well as proposed legislative changes to the patent system
only exacerbate this uncertainty.
In Europe, the European Patent Convention prohibits the granting of European
patents for inventions that concern "uses of human embryos for industrial or
commercial purposes." The European Patent Office is presently interpreting this
prohibition broadly, and is applying it to reject patent claims that pertain to
human embryonic stem cells. However, this broad interpretation is being
challenged through the European Patent Office appeals system. As a result, we do
not yet know whether or to what extent we will be able to obtain patent
protection for our human embryonic stem cell technologies in Europe.
Publication of discoveries in scientific or patent literature tends to lag
behind actual discoveries by at least several months and sometimes several
years. Therefore, the persons or entities that we or our licensors name as
inventors in our patents and patent applications may not have been the first to
invent the inventions disclosed in the patent applications or patents, or the
first to file patent applications for these inventions. As a result, we may not
be able to obtain patents for discoveries that we otherwise would consider
patentable and that we consider to be extremely significant to our future
success.
Where several parties seek U.S. patent protection for the same technology,
the U.S. Patent and Trademark Office (the Patent Office) may declare an
interference proceeding in order to ascertain the party to which the patent
should be issued. Patent interferences are typically complex, highly contested
legal proceedings, subject to appeal. They are usually expensive and prolonged,
and can cause significant delay in the issuance of patents. Moreover, parties
that receive an adverse decision in an interference can lose important patent
rights. Our pending patent applications, or our issued patents, may be drawn
into interference proceedings which may delay or prevent the issuance of
patents, or result in the loss of issued patent rights. As more groups become
engaged in scientific research and product development in the areas of
telomerase biology and/or embryonic stem cells, the risk of our patents being
challenged through patent interferences, oppositions, reexaminations or other
means will likely increase.
6
The interference process can also be used to challenge a patent that has been
issued to another party. For example, in 2004 we were party to two interferences
declared by the Patent Office at our request. These interferences involved two
of our pending applications relating to nuclear transfer technology and two
issued patents, held by the University of Massachusetts (U. Mass) and licensed
to Advanced Cell Technology, Inc. (ACT) of Worcester, Massachusetts. We
requested these interferences in order to clarify our patent rights to this
technology and to facilitate licensing to companies wishing to utilize this
technology in animal cloning. The Board of Patent Appeals and Interferences
issued final judgments in each of these cases, finding in both instances that
all of the claims in the U. Mass patents in question were unpatentable, and
upholding the patentability of Geron's pending claims. These judgments were
appealed by U. Mass and ACT, but the appeals have now been dismissed as part of
a settlement agreement, resulting in invalidation of the U. Mass patents.
Outside of the United States, certain jurisdictions, such as Europe, New
Zealand and Australia, permit oppositions to be filed against the granting of
patents. Because our intent is to commercialize products internationally,
securing both proprietary protection and freedom to operate outside of the
United States is important to our business. We are involved in both opposing the
grant of patents to others through such opposition proceedings and in defending
our patent applications against oppositions filed by others. For example, we
have recently been involved in two patent oppositions before the European Patent
Office (EPO) with a Danish company, Pharmexa. Pharmexa (which acquired the
Norwegian company GemVax in 2005) is developing a cancer vaccine that employs a
short telomerase peptide to induce an immune response against telomerase and has
announced plans to begin Phase III clinical trials. Pharmexa obtained a European
patent with broad claims to the use of telomerase vaccines for the treatment of
cancer, and Geron opposed that patent in 2004. In 2005, the Opposition Division
(OD) of the EPO revoked the claims originally granted to Pharmexa, but permitted
Pharmexa to add new, narrower claims limited to five specific small peptide
fragments of telomerase. The decision was appealed to the Technical Board of
Appeals (TBA). In August 2007, the TBA ruled, consistent with the decision of
the OD, that Pharmexa was not entitled to the originally granted broad claims
but was only entitled to the narrow claims limited to the five small peptides.
In parallel, Pharmexa opposed a European patent held by Geron, the claims of
which cover many facets of human telomerase, including the use of telomerase
peptides in cancer vaccines. In June 2006, the OD of the EPO revoked three of
the granted claims in Geron's patent, specifically the three claims covering
telomerase peptide cancer vaccines. We have appealed that decision to the TBA,
and that appeal is still pending. Because this appeal is ongoing, the outcome
cannot be determined at this time. We are also seeking to obtain patent coverage
in Europe for telomerase peptides through a European divisional patent
application. If those patent claims are issued, they too may be subject to an
opposition proceeding.
European opposition and appeal proceedings can take several years to reach
final decision. The oppositions discussed above reflect the complexity of the
patent landscape in which we operate, and illustrate the risks and
uncertainties. We are also involved in other patent oppositions in Europe,
Australia and New Zealand.
Patent opposition proceedings are not currently available in the U.S. patent
system, but legislation is pending to introduce them. However, issued U.S.
patents can be reexamined by the Patent Office at the request of a third party.
Patents owned or licensed by Geron may therefore be subject to reexamination. As
in any legal proceeding, the outcome of patent reexaminations is uncertain, and
a decision adverse to our interests could result in the loss of valuable patent
rights. In July 2006, requests were filed on behalf of the Foundation for
Taxpayer and Consumer Rights for reexamination of three issued U.S. patents
owned by the Wisconsin Alumni Research Foundation (WARF) and relating to human
embryonic stem cells. These three patents (U.S. Patent Nos. 5,843,780, 6,200,806
and 7,029,913) are licensed to Geron pursuant to a January 2002 license
agreement with WARF. The license agreement conveys exclusive rights to Geron
under the WARF patents for the development and commercialization of therapeutics
based on neural cells, cardiomyocytes and pancreatic islet cells, derived from
human embryonic stem cells, as well as nonexclusive rights for other product
opportunities. In October 2006, the Patent Office initiated the reexamination
proceedings and in March 2007 it issued initial non-final actions rejecting all
claims of each of the three patents in reexamination. In May 2007, WARF filed
responses to the Patent Office rejections. We are cooperating with WARF in these
actions and expect that WARF will continue to vigorously defend its patent
position, including appealing any adverse decision from the Patent Office.
Because these reexaminations are ongoing, the outcome of these matters cannot be
determined at this time. Reduction or loss of claim scope in these WARF
embryonic stem cell patents would negatively impact Geron's proprietary position
in this technology.
7
Successful challenges to our patents through interferences, oppositions or
reexamination proceedings could result in a loss of patent rights in the
relevant jurisdiction(s). If we are unsuccessful in actions we bring against the
patents of other parties, we may be subject to litigation, or otherwise
prevented from commercializing potential products in the relevant jurisdiction,
or may be required to obtain licenses to those patents or develop or obtain
alternative technologies, any of which could harm our business.
Furthermore, if such challenges to our patent rights are not resolved
promptly in our favor, our existing business relationships may be jeopardized
and we could be delayed or prevented from entering into new collaborations or
from commercializing certain products, which could materially harm our business.
Patent litigation may also be necessary to enforce patents issued or licensed
to us or to determine the scope and validity of our proprietary rights or the
proprietary rights of others. We may not be successful in any patent litigation.
Patent litigation can be extremely expensive and time-consuming, even if the
outcome is favorable to us. An adverse outcome in a patent litigation, patent
opposition, patent interference, or any other proceeding in a court or patent
office could subject our business to significant liabilities to other parties,
require disputed rights to be licensed from other parties or require us to cease
using the disputed technology, any of which could severely harm our business.
IF WE FAIL TO MEET OUR OBLIGATIONS UNDER LICENSE AGREEMENTS, WE MAY LOSE OUR
RIGHTS TO KEY TECHNOLOGIES ON WHICH OUR BUSINESS DEPENDS.
Our business depends on several critical technologies that are based in part
on patents licensed from third parties. Those third-party license agreements
impose obligations on us, such as payment obligations and obligations to
diligently pursue development of commercial products under the licensed patents.
If a licensor believes that we have failed to meet our obligations under a
license agreement, the licensor could seek to limit or terminate our license
rights, which could lead to costly and time-consuming litigation and,
potentially, a loss of the licensed rights. During the period of any such
litigation our ability to carry out the development and commercialization of
potential products could be significantly and negatively affected. If our
license rights were restricted or ultimately lost, our ability to continue our
business based on the affected technology platform would be severely adversely
affected.
WE MAY BE SUBJECT TO LITIGATION THAT WILL BE COSTLY TO DEFEND OR PURSUE AND
UNCERTAIN IN ITS OUTCOME.
Our business may bring us into conflict with our licensees, licensors, or
others with whom we have contractual or other business relationships, or with
our competitors or others whose interests differ from ours. If we are unable to
resolve those conflicts on terms that are satisfactory to all parties, we may
become involved in litigation brought by or against us. That litigation is
likely to be expensive and may require a significant amount of management's time
and attention, at the expense of other aspects of our business. The outcome of
litigation is always uncertain, and in some cases could include judgments
against us that require us to pay damages, enjoin us from certain activities, or
otherwise affect our legal or contractual rights, which could have a significant
adverse effect on our business.
WE MAY BE SUBJECT TO INFRINGEMENT CLAIMS THAT ARE COSTLY TO DEFEND, AND
WHICH MAY LIMIT OUR ABILITY TO USE DISPUTED TECHNOLOGIES AND PREVENT US
FROM PURSUING RESEARCH AND DEVELOPMENT OR COMMERCIALIZATION OF
POTENTIAL PRODUCTS.
Our commercial success depends significantly on our ability to operate
without infringing patents and the proprietary rights of others. Our
technologies may infringe the patents or proprietary rights of others. In
addition, we may become aware of discoveries and technology controlled by third
parties that are advantageous to our programs. In the event our technologies
infringe the rights of others or we require the use of discoveries and
technology controlled by third parties, we may be prevented from pursuing
research, development or commercialization of potential products or may be
required to obtain licenses to those patents or other proprietary rights or
develop or obtain alternative technologies. We have obtained licenses from
several universities and companies for technologies that we anticipate
incorporating into our potential products, and we initiate negotiation for
licenses to other technologies as the need or opportunity arises. We may not be
able to obtain a license to patented technology on commercially favorable terms,
or at all. If we do not obtain a necessary license, we may need to redesign our
technologies or obtain rights to alternate technologies, the research and
adoption of which could cause delays in product development. In cases where we
are unable to license necessary technologies, we could be prevented from
developing certain potential products. Our failure to obtain alternative
technologies or a license to any technology that we may require to research,
develop or commercialize our product candidates would significantly and
negatively affect our business.
8
MUCH OF THE INFORMATION AND KNOW-HOW THAT IS CRITICAL TO OUR BUSINESS
IS NOT PATENTABLE AND WE MAY NOT BE ABLE TO PREVENT OTHERS FROM
OBTAINING THIS INFORMATION AND ESTABLISHING COMPETITIVE ENTERPRISES.
We sometimes rely on trade secrets to protect our proprietary technology,
especially in circumstances in which we believe patent protection is not
appropriate or available. We attempt to protect our proprietary technology in
part by confidentiality agreements with our employees, consultants,
collaborators and contractors. We cannot assure you that these agreements will
not be breached, that we would have adequate remedies for any breach, or that
our trade secrets will not otherwise become known or be independently discovered
by competitors, any of which would harm our business significantly.
WE DEPEND ON OUR COLLABORATORS AND JOINT VENTURE PARTNERS TO HELP US
DEVELOP AND TEST OUR PRODUCT CANDIDATES, AND OUR ABILITY TO DEVELOP AND
COMMERCIALIZE POTENTIAL PRODUCTS MAY BE IMPAIRED OR DELAYED IF
COLLABORATIONS ARE UNSUCCESSFUL.
Our strategy for the development, clinical testing and commercialization of
our product candidates requires that we enter into collaborations with corporate
or joint venture partners, licensors, licensees and others. We are dependent
upon the subsequent success of these other parties in performing their
respective responsibilities and the continued cooperation of our partners. By
way of examples: Merck is principally responsible for developing cancer vaccines
targeted to telomerase other than the dendritic cell-based vaccines that we are
developing; Cell Genesys is principally responsible for developing oncolytic
virus therapeutics utilizing the telomerase promoter; and Roche is responsible
for developing cancer diagnostics using our telomerase technology. Our
collaborators may not cooperate with us or perform their obligations under our
agreements with them. We cannot control the amount and timing of our
collaborators' resources that will be devoted to activities related to our
collaborative agreements with them. Our collaborators may choose to pursue
existing or alternative technologies in preference to those being developed in
collaboration with us.
Under agreements with collaborators and joint venture partners, we may rely
significantly on these parties to, among other activities:
o conduct research and development activities in conjunction with us;
o design and conduct advanced clinical trials in the event that we reach
clinical trials;
o fund research and development activities with us;
o manage and license certain patent rights;
o pay us fees upon the achievement of milestones; and
o market with us any commercial products that result from our
collaborations or joint ventures.
9
The development and commercialization of potential products will be delayed
if collaborators or joint venture partners fail to conduct these activities in a
timely manner or at all. In addition, our collaborators could terminate their
agreements with us and we may not receive any development or milestone payments.
If we do not achieve milestones set forth in the agreements, or if our
collaborators breach or terminate their collaborative agreements with us, our
business may be materially harmed.
OUR RELIANCE ON THE ACTIVITIES OF OUR NON-EMPLOYEE CONSULTANTS,
RESEARCH INSTITUTIONS, AND SCIENTIFIC CONTRACTORS, WHOSE ACTIVITIES ARE
NOT WHOLLY WITHIN OUR CONTROL, MAY LEAD TO DELAYS IN DEVELOPMENT OF OUR
PRODUCT CANDIDATES.
We rely extensively upon and have relationships with scientific consultants
at academic and other institutions, some of whom conduct research at our
request, and other consultants who assist us in formulating our research and
development and clinical strategy or other matters. These consultants are not
our employees and may have commitments to, or consulting or advisory contracts
with, other entities that may limit their availability to us. We have limited
control over the activities of these consultants and, except as otherwise
required by our collaboration and consulting agreements, can expect only limited
amounts of their time to be dedicated to our activities.
We face intense competition for qualified individuals from numerous
pharmaceutical, biopharmaceutical and biotechnology companies, as well as
academic and other research institutions. We may not be able to attract and
retain these individuals on acceptable terms. Failure to do so could materially
harm our business.
In addition, we have formed research collaborations with many academic and
other research institutions throughout the world. These research facilities may
have commitments to other commercial and non-commercial entities. We have
limited control over the operations of these laboratories and can expect only
limited amounts of their time to be dedicated to our research goals.
We also rely on other companies for certain process development,
manufacturing or other technical scientific work, especially with respect to our
GRN163L, GRNVAC1 and GRNOPC1 programs. We have contracts with these companies
that specify the work to be done and results to be achieved, but we do not have
direct control over their personnel or operations.
If any of these third parties are unable or refuse to contribute to projects
on which we need their help, our ability to generate advances in our
technologies and develop or manufacture our product candidates could be
significantly harmed.
THE LOSS OF KEY PERSONNEL COULD SLOW OUR ABILITY TO CONDUCT RESEARCH AND DEVELOP
PRODUCT CANDIDATES.
Our future success depends to a significant extent on the skills, experience
and efforts of our executive officers and key members of our scientific staff.
Competition for personnel is intense and we may be unable to retain our current
personnel or attract or assimilate other highly qualified management and
scientific personnel in the future. The loss of any or all of these individuals
could harm our business and might significantly delay or prevent the achievement
of research, development or business objectives.
FAILURE TO ACHIEVE AND MAINTAIN EFFECTIVE INTERNAL CONTROLS IN
ACCORDANCE WITH SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002 COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND STOCK PRICE.
Section 404 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act)
requires that we establish and maintain an adequate internal control structure
and procedures for financial reporting and include a report of management on our
internal control over financial reporting. Our annual report on Form 10-K must
contain an assessment by management of the effectiveness of our internal control
over financial reporting and must include disclosure of any material weaknesses
in internal control over financial reporting that we have identified. In
addition, our independent registered public accounting firm must annually
provide an opinion on the effectiveness of our internal control over financial
reporting.
10
We identified a material weakness in our internal control over financial
reporting as of December 31, 2006 which pertains to controls relating to the
process of accounting for complex non-routine transactions. As of March 31, 2007
we implemented a plan to remediate the identified material weakness. The
requirements of Section 404 of the Sarbanes-Oxley Act are ongoing and also apply
to future years. We expect that our internal control over financial reporting
will continue to evolve as our business develops. Although we are committed to
continue to improve our internal control processes and we will continue to
diligently and vigorously review our internal control over financial reporting
in order to ensure compliance with the Section 404 requirements, any control
system, regardless of how well designed, operated and evaluated, can provide
only reasonable, not absolute, assurance that its objectives will be met.
Therefore, we cannot be certain that in the future material weaknesses or
significant deficiencies will not exist or otherwise be discovered. If material
weaknesses or other significant deficiencies occur, these weaknesses or
deficiencies could result in misstatements of our results of operations,
restatements of our consolidated financial statements, a decline in our stock
price, or other material effects on our business, reputation, results of
operations, financial condition or liquidity.
OUR PRODUCTS ARE LIKELY TO BE EXPENSIVE TO MANUFACTURE, AND THEY MAY
NOT BE PROFITABLE IF WE ARE UNABLE TO SIGNIFICANTLY REDUCE THE COSTS TO
MANUFACTURE THEM.
Our telomerase inhibitor compound, GRN163L, and our hESC-based products are
likely to be more expensive to manufacture than most other drugs currently on
the market today. Oligonucleotides are relatively large molecules with complex
chemistry, and the cost of manufacturing an oligonucleotide like GRN163L is
greater than the cost of making most small-molecule drugs. Our present
manufacturing processes are conducted at a small scale and are at an early stage
of development. We hope to substantially reduce manufacturing costs through
process improvements, as well as through scale increases. If we are not able to
do so, however, and, depending on the pricing of the potential product, the
profit margin on the telomerase inhibitor may be significantly less than that of
most drugs on the market today. Similarly, we currently make differentiated
cells from hESCs on a laboratory scale, at a high cost per unit measure. The
cell-based therapies we are developing based on hESCs will probably require
large quantities of cells. We continue to develop processes to scale up
production of the cells in a cost-effective way. We may not be able to charge a
high enough price for any cell therapy product we develop, even if it is safe
and effective, to make a profit. If we are unable to realize significant profits
from our potential product candidates, our business would be materially harmed.
SOME OF OUR COMPETITORS MAY DEVELOP TECHNOLOGIES THAT ARE SUPERIOR TO
OR MORE COST-EFFECTIVE THAN OURS, WHICH MAY IMPACT THE COMMERCIAL
VIABILITY OF OUR TECHNOLOGIES AND WHICH MAY SIGNIFICANTLY DAMAGE OUR
ABILITY TO SUSTAIN OPERATIONS.
The pharmaceutical and biotechnology industries are intensely competitive.
Other pharmaceutical and biotechnology companies and research organizations
currently engage in or have in the past engaged in efforts related to the
biological mechanisms that are the focus of our programs in oncology and human
embryonic stem cell therapies, including the study of telomeres, telomerase,
human embryonic stem cells, and nuclear transfer. In addition, other products
and therapies that could compete directly with the product candidates that we
are seeking to develop and market currently exist or are being developed by
pharmaceutical and biopharmaceutical companies and by academic and other
research organizations.
Many companies are developing alternative therapies to treat cancer and, in
this regard, are competitors of ours. According to public data from the FDA and
NIH, there are more than 200 approved anti-cancer products on the market in the
United States, and several thousand in clinical development. Many of the
pharmaceutical companies developing and marketing these competing products
(including GlaxoSmithKline, Bristol-Myers Squibb Company and Novartis AG, among
others) have significantly greater financial resources and expertise than we do
in:
o research and development;
o manufacturing;
11
o preclinical and clinical testing;
o obtaining regulatory approvals; and
o marketing and distribution.
Smaller companies may also prove to be significant competitors, particularly
through collaborative arrangements with large and established companies.
Academic institutions, government agencies and other public and private research
organizations may also conduct research, seek patent protection and establish
collaborative arrangements for research, clinical development and marketing of
products similar to ours. These companies and institutions compete with us in
recruiting and retaining qualified scientific and management personnel as well
as in acquiring technologies complementary to our programs.
In addition to the above factors, we expect to face competition in the
following areas:
o product efficacy and safety;
o the timing and scope of regulatory consents;
o availability of resources;
o reimbursement coverage;
o price; and
o patent position, including potentially dominant patent positions of
others.
As a result of the foregoing, our competitors may develop more effective or
more affordable products, or achieve earlier patent protection or product
commercialization than we do. Most significantly, competitive products may
render any product candidates that we develop obsolete, which would negatively
impact our business and ability to sustain operations.
WE MAY NOT BE ABLE TO OBTAIN OR MAINTAIN SUFFICIENT INSURANCE ON
COMMERCIALLY REASONABLE TERMS OR WITH ADEQUATE COVERAGE AGAINST
POTENTIAL LIABILITIES IN ORDER TO PROTECT OURSELVES AGAINST PRODUCT
LIABILITY CLAIMS.
Our business exposes us to potential product liability risks that are
inherent in the testing, manufacturing and marketing of human therapeutic and
diagnostic products. We may become subject to product liability claims if the
use of our potential products is alleged to have injured subjects or patients.
This risk exists for product candidates tested in human clinical trials as well
as potential products that are sold commercially. We currently have limited
clinical trial liability insurance and we may not be able to maintain this type
of insurance for any of our clinical trials. In addition, product liability
insurance is becoming increasingly expensive. As a result, we may not be able to
obtain or maintain product liability insurance in the future on acceptable terms
or with adequate coverage against potential liabilities that could have a
material adverse effect on our business.
TO BE SUCCESSFUL, OUR PRODUCT CANDIDATES MUST BE ACCEPTED BY THE HEALTH
CARE COMMUNITY, WHICH CAN BE VERY SLOW TO ADOPT OR UNRECEPTIVE TO NEW
TECHNOLOGIES AND PRODUCTS.
Our product candidates and those developed by our collaborative or joint
venture partners, if approved for marketing, may not achieve market acceptance
since hospitals, physicians, patients or the medical community in general may
decide not to accept and utilize these products. The product candidates that we
are attempting to develop represent substantial departures from established
treatment methods and will compete with a number of conventional drugs and
therapies manufactured and marketed by major pharmaceutical companies. The
degree of market acceptance of any of our developed potential products will
depend on a number of factors, including:
12
o our establishment and demonstration to the medical community of the
clinical efficacy and safety of our product candidates;
o our ability to create products that are superior to alternatives
currently on the market;
o our ability to establish in the medical community the potential
advantage of our treatments over alternative treatment methods; and
o reimbursement policies of government and third-party payors.
If the health care community does not accept our potential products for any
of the foregoing reasons, or for any other reason, our business would be
materially harmed.
IF WE FAIL TO OBTAIN ACCEPTABLE PRICES OR ADEQUATE REIMBURSEMENT FOR
OUR PRODUCT CANDIDATES, THE USE OF OUR POTENTIAL PRODUCTS COULD BE
SEVERELY LIMITED.
Our ability to successfully commercialize our product candidates will depend
significantly on our ability to obtain acceptable prices and the availability of
reimbursement to the patient from third-party payors. Significant uncertainty
exists as to the reimbursement status of newly-approved health care products,
including pharmaceuticals. If our potential products are not considered
cost-effective or if we fail to generate adequate third-party reimbursement for
the users of our potential products and treatments, then we may be unable to
maintain price levels sufficient to realize an appropriate return on our
investment in product development.
In both U.S. and other markets, sales of our potential products, if any, will
depend in part on the availability of reimbursement from third-party payors,
examples of which include:
o government health administration authorities;
o private health insurers;
o health maintenance organizations; and
o pharmacy benefit management companies.
Both federal and state governments in the United States and governments in
other countries continue to propose and pass legislation designed to contain or
reduce the cost of health care. Legislation and regulations affecting the
pricing of pharmaceuticals and other medical products may be adopted before any
of our potential products are approved for marketing. Cost control initiatives
could decrease the price that we receive for any product candidate we may
develop in the future. In addition, third-party payors are increasingly
challenging the price and cost-effectiveness of medical products and services
and any of our potential products may ultimately not be considered
cost-effective by these third parties. Any of these initiatives or developments
could materially harm our business.
OUR ACTIVITIES INVOLVE HAZARDOUS MATERIALS, AND IMPROPER HANDLING OF
THESE MATERIALS BY OUR EMPLOYEES OR AGENTS COULD EXPOSE US TO
SIGNIFICANT LEGAL AND FINANCIAL PENALTIES.
Our research and development activities involve the controlled use of
hazardous materials, chemicals and various radioactive compounds. As a
consequence, we are subject to numerous environmental and safety laws and
regulations, including those governing laboratory procedures, exposure to
blood-borne pathogens and the handling of biohazardous materials. We may be
required to incur significant costs to comply with current or future
environmental laws and regulations and may be adversely affected by the cost of
compliance with these laws and regulations.
13
Although we believe that our safety procedures for using, handling, storing
and disposing of hazardous materials comply with the standards prescribed by
state and federal regulations, the risk of accidental contamination or injury
from these materials cannot be eliminated. In the event of such an accident,
state or federal authorities could curtail our use of these materials and we
could be liable for any civil damages that result, the cost of which could be
substantial. Further, any failure by us to control the use, disposal, removal or
storage, or to adequately restrict the discharge, or assist in the cleanup, of
hazardous chemicals or hazardous, infectious or toxic substances could subject
us to significant liabilities, including joint and several liability under
certain statutes. Any such liability could exceed our resources and could have a
material adverse effect on our business, financial condition and results of
operations. Additionally, an accident could damage our research and
manufacturing facilities and operations.
Additional federal, state and local laws and regulations affecting us may be
adopted in the future. We may incur substantial costs to comply with these laws
and regulations and substantial fines or penalties if we violate any of these
laws or regulations.
OUR STOCK PRICE HAS HISTORICALLY BEEN VERY VOLATILE.
Stock prices and trading volumes for many biopharmaceutical companies
fluctuate widely for a number of reasons, including factors which may be
unrelated to their businesses or results of operations such as media coverage,
legislative and regulatory measures and the activities of various interest
groups or organizations. This market volatility, as well as general domestic or
international economic, market and political conditions, could materially and
adversely affect the market price of our common stock and the return on your
investment.
Historically, our stock price has been extremely volatile. Between January
1998 and October 2007, our stock has traded as high as $75.88 per share and as
low as $1.41 per share. Between January 1, 2003 and October 25, 2007, the price
has ranged between a high of $16.80 per share and a low of $1.41 per share. The
significant market price fluctuations of our common stock are due to a variety
of factors, including:
o the demand in the market for our common stock;
o the experimental nature of our product candidates;
o fluctuations in our operating results;
o market conditions relating to the biopharmaceutical and pharmaceutical
industries;
o announcements of technological innovations, new commercial products,
or clinical progress or lack thereof by us, our collaborative partners
or our competitors;
o announcements concerning regulatory developments, developments with
respect to proprietary rights and our collaborations;
o comments by securities analysts;
o general market conditions;
o political developments related to human embryonic stem cell research;
o public concern with respect to our product candidates; or
o the issuance of common stock to partners, vendors or to investors to
raise additional capital.
14
In addition, the stock market is subject to other factors outside our control
that can cause extreme price and volume fluctuations. Securities class action
litigation has often been brought against companies, including many
biotechnology companies, which experience volatility in the market price of
their securities. Litigation brought against us could result in substantial
costs and a diversion of management's attention and resources, which could
adversely affect our business.
THE SALE OF A SUBSTANTIAL NUMBER OF SHARES MAY ADVERSELY AFFECT THE MARKET PRICE
FOR OUR COMMON STOCK.
Sale of a substantial number of shares of our common stock in the public
market, or the perception that such sales could occur, could significantly and
negatively affect the market price for our common stock. As of October 25, 2007,
we had 200,000,000 shares of common stock authorized for issuance and 75,352,575
shares of common stock outstanding. In addition, as of October 25, 2007, we have
reserved for future issuance approximately 26,148,293 shares of common stock for
our stock plans, potential milestone payments and outstanding warrants.
In addition, we have issued common stock to certain parties, such as vendors
and service providers, as payment for products and services. Under these
arrangements, we typically agree to register the shares for resale soon after
their issuance. We may continue to pay for certain goods and services in this
manner, which would dilute your interest in us. Also, sales of the shares issued
in this manner could negatively affect the market price of our stock.
OUR UNDESIGNATED PREFERRED STOCK MAY INHIBIT POTENTIAL ACQUISITION
BIDS; THIS MAY ADVERSELY AFFECT THE MARKET PRICE FOR OUR COMMON STOCK
AND THE VOTING RIGHTS OF HOLDERS OF OUR COMMON STOCK.
Our certificate of incorporation provides our Board of Directors with the
authority to issue up to 3,000,000 shares of undesignated preferred stock and to
determine the rights, preferences, privileges and restrictions of these shares
without further vote or action by our stockholders. As of the date of this
filing, 50,000 shares of preferred stock have been designated Series A Junior
Participating Preferred Stock and the Board of Directors still has authority to
designate and issue up to 2,950,000 shares of preferred stock. The issuance of
shares of preferred stock may delay or prevent a change in control transaction
without further action by our stockholders. As a result, the market price of our
common stock may be adversely affected.
In addition, if we issue preferred stock in the future that has preference
over our common stock with respect to the payment of dividends or upon our
liquidation, dissolution or winding up, or if we issue preferred stock with
voting rights that dilute the voting power of our common stock, the rights of
holders of our common stock or the market price of our common stock could be
adversely affected.
PROVISIONS IN OUR SHARE PURCHASE RIGHTS PLAN, CHARTER AND BYLAWS, AND
PROVISIONS OF DELAWARE LAW, MAY INHIBIT POTENTIAL ACQUISITION BIDS FOR
US, WHICH MAY PREVENT HOLDERS OF OUR COMMON STOCK FROM BENEFITING FROM
WHAT THEY BELIEVE MAY BE THE POSITIVE ASPECTS OF ACQUISITIONS AND
TAKEOVERS.
Our Board of Directors has adopted a share purchase rights plan, commonly
referred to as a "poison pill." This plan entitles existing stockholders to
rights, including the right to purchase shares of common stock, in the event of
an acquisition of 15% or more of our outstanding common stock.
Our share purchase rights plan could prevent stockholders from profiting from
an increase in the market value of their shares as a result of a change of
control of us by delaying or preventing a change of control. In addition, our
Board of Directors has the authority, without further action by our
stockholders, to issue additional shares of common stock, and to fix the rights
and preferences of one or more series of preferred stock.
In addition to our share purchase rights plan and the undesignated preferred
stock, provisions of our charter documents and bylaws may make it substantially
more difficult for a third party to acquire control of us and may prevent
changes in our management, including provisions that:
o prevent stockholders from taking actions by written consent;
15
o divide the Board of Directors into separate classes with terms of
office that are structured to prevent all of the directors from being
elected in any one year; and
o set forth procedures for nominating directors and submitting proposals
for consideration at stockholders' meetings.
Provisions of Delaware law may also inhibit potential acquisition bids for us
or prevent us from engaging in business combinations. In addition, we have
severance agreements with several employees and a change of control severance
plan which could require an acquiror to pay a higher price. Either collectively
or individually, these provisions may prevent holders of our common stock from
benefiting from what they may believe are the positive aspects of acquisitions
and takeovers, including the potential realization of a higher rate of return on
their investment from these types of transactions.
WE DO NOT INTEND TO PAY CASH DIVIDENDS ON OUR COMMON STOCK IN THE FORESEEABLE
FUTURE.
We do not anticipate paying cash dividends on our common stock in the
foreseeable future. Any payment of cash dividends will depend upon our financial
condition, results of operations, capital requirements and other factors and
will be at the discretion of the Board of Directors. Furthermore, we may incur
additional indebtedness that may severely restrict or prohibit the payment of
dividends.
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FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference into this
prospectus contain forward-looking statements that are based on current
expectations, estimates and projections about our industry, management's
beliefs, and assumptions made by management. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," and variations
of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions that
are difficult to predict; therefore, actual results may differ materially from
those expressed or forecasted in any forward-looking statements. The risks and
uncertainties include those noted in "Risk Factors" above and in the documents
incorporated by reference. We undertake no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
USE OF PROCEEDS
We are filing the registration statement of which this prospectus is a part
under our contractual obligation to the holder named in the section entitled
"Selling Stockholder." We will not receive any of the proceeds from resale of
these shares of common stock by the selling stockholder.
DESCRIPTION OF OUR COMMON STOCK
The following summary is a general description of our common stock. Complete
details can be found in our Charter and Bylaws, copies of which are on file with
the Commission as exhibits to registration statements previously filed by us.
See "Where You Can Find More Information."
We have authority to issue 200,000,000 shares of common stock, $0.001 par
value per share. As of October 25, 2007, we had 75,352,575 shares of common
stock outstanding.
The holders of our common stock are entitled to one vote per share on all
matters to be voted upon by the stockholder. Subject to preferences that may be
applicable to any outstanding shares of our preferred stock, the holders of
common stock are entitled to receive ratably such dividends, if any, as may be
declared from time to time by our Board of Directors out of funds legally
available for that purpose. In the event of a liquidation, dissolution or
winding up of our company, the holders of our common stock are entitled to share
ratably in all assets remaining after payment of liabilities, subject to
preferences applicable to shares of our preferred stock, if any, then
outstanding. The common stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions
available to the common stock. All outstanding shares of our common stock are,
and the shares of common stock offered by this prospectus will be, fully paid
and nonassessable.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is Computershare Trust
Company, N.A.
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SELLING STOCKHOLDER
The following table sets forth the name of the selling stockholder, the
number of shares of common stock owned beneficially by the selling stockholder
as of October 25, 2007, the number of shares which may be offered pursuant to
this prospectus and the number of shares to be owned by the selling stockholder
after this offering. In the aggregate, the selling stockholder may sell up to
50,000 shares of our common stock pursuant to this prospectus. Since the selling
stockholder may offer all, some or none of its common stock, no definitive
estimate as to the number of shares thereof that will be held by the selling
stockholder after the offering can be provided. In addition, since the date the
selling stockholder provided information regarding its ownership of the shares,
it may have sold, transferred or otherwise disposed of all or a portion of its
shares of common stock in transactions exempt from the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act"). Information
concerning the selling stockholder may change from time to time and, when
necessary, any changed information will be set forth in a prospectus supplement
to this prospectus.
On November 5, 2004, in consideration for investment banking services
provided under an agreement with Lazard Freres & Co. LLC ("Lazard"), we issued
to Lazard a warrant to purchase up to 25,000 shares of our common stock at a
purchase price of $6.12 per share, pursuant to a common stock warrant agreement
dated as of November 5, 2004. On October 23, 2007, under a separate agreement
with Lazard for investment banking services, we issued to Lazard a warrant to
purchase up to 25,000 shares of our common stock at a purchase price of $7.42
per share, pursuant to a common stock warrant agreement dated as of October 23,
2007. Each warrant is exercisable for a period of five years after the date of
issuance. The number of shares that we have registered is based upon the maximum
number of shares issuable upon exercise of these warrants.
To our knowledge, Lazard has sole voting and investment power with respect to
all shares of common stock beneficially owned by it. This information is based
upon information provided by the selling stockholder.
Maximum Number of
Shares Available Shares Owned
Total Number of Pursuant to this After Offering Percentage
Name Shares Held (1) Prospectus (1) (2) (3)
--------------- ----------------- ------------------ ---------------- ----------
Lazard Freres &
Co. LLC 50,000 50,000 0 *
--------------
(1) Based on information available as of October 25, 2007.
(2) Assumes the sale of all shares of common stock offered by this prospectus.
(3) Based on 75,352,575 shares of common stock outstanding as of October 25,
2007.
* Less than 1%.
18
PLAN OF DISTRIBUTION
We are registering a total of 50,000 shares of our common stock on behalf of
the selling stockholder. The selling stockholder and any of its pledgees,
assignees and successors-in-interest may, from time to time, sell any or all of
the shares of common stock offered hereby on any stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The selling stockholder may
use any one or more of the following methods when selling shares:
o sales on the Nasdaq Global Market;
o sales in the over-the-counter market;
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales;
o transactions in which broker-dealers agree with the selling
stockholder to sell a specified number of such shares at a stipulated
price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling stockholder may also sell the shares directly to market makers
acting as principals and/or broker-dealers acting as agents for themselves or
their customers. These broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholder and/or the
purchasers of shares for whom the broker-dealers may act as agents or to whom
they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. It is possible that the selling stockholder will attempt to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then market price. The
selling stockholder cannot assure that all or any of the shares offered in this
prospectus will be issued to, or sold by, the selling stockholder. The selling
stockholder and any brokers, dealers or agents, upon effecting the sale of any
of the shares offered in this prospectus, may be deemed "underwriters" as that
term is defined under the Securities Act or the Exchange Act, or the rules and
regulations under such acts.
The selling stockholder, alternatively, may sell all or any part of the
shares offered in this prospectus through an underwriter. To our knowledge, the
selling stockholder has not entered into any agreement with a prospective
underwriter and we cannot assure you that any such agreement will be entered
into. If the selling stockholder enters into this type of an agreement or
agreements, the relevant details will be set forth in a supplement or revision
to this prospectus.
The selling stockholder and any other persons participating in the sale or
distribution of the shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations under such act, including, without
limitation, Regulation M. These provisions may restrict certain activities of,
and limit the timing of purchases and sales of any of the shares by, the selling
stockholder or any other person. Furthermore, under Regulation M, persons
engaged in a distribution of securities are prohibited from simultaneously
engaging in market making and certain other activities with respect to the
securities for a specified period of time prior to the commencement of the
distributions, subject to specified exceptions or exemptions. All of these
limitations may affect the marketability of the shares.
19
The selling stockholder also may sell all or a portion of its shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
it meets the criteria and conforms to the requirements of Rule 144.
LEGAL MATTERS
Latham & Watkins LLP will pass on the validity of the issuance of the shares
of common stock offered by this prospectus.
EXPERTS
The consolidated financial statements of Geron Corporation appearing in
Geron's Annual Report (Form 10-K) for the year ended December 31, 2006, and
Geron Corporation management's assessment of the effectiveness of internal
control over financial reporting as of December 31, 2006 included therein, have
been audited by Ernst & Young LLP, independent registered public accounting
firm, as set forth in its reports thereon (which conclude, among other things,
that Geron Corporation did not maintain effective internal control over
financial reporting as of December 31, 2006, based on Internal
Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, because of the effects of the material
weakness described therein), included therein, and incorporated herein by
reference. Such consolidated financial statements and management's assessment
have been incorporated herein by reference in reliance upon such reports given
on the authority of such firm as experts in accounting and auditing.
MATERIAL CHANGES
There have been no material changes in our affairs since December 31, 2006,
which have not been described in subsequent reports on Form 8-K and Form 10-Q.
LIMITATION ON LIABILITY AND DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our bylaws provide for indemnification of our directors and officers to the
fullest extent permitted by law. Insofar as indemnification for liabilities
under the Securities Act may be permitted to directors, officers or controlling
persons of Geron pursuant to Geron's Certificate of Incorporation, bylaws and
the Delaware General Corporation Law, Geron has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. We make available free of charge on or through our
Internet website our annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and all amendments to those reports as soon as
reasonably practicable after they are electronically filed with, or furnished
to, the Securities and Exchange Commission. Our Internet website address is
www.geron.com. You may read and copy any document we file at the SEC's public
reference room located at 100 F Street, N.E., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
room. Our SEC filings are also available to the public at the SEC's website at
http://www.sec.gov. You may also inspect copies of these materials and other
information about us at the offices of the Nasdaq Stock Market, Inc., National
Market System, 1735 K Street, N.W., Washington, D.C. 20006-1500.
20
DOCUMENTS WE HAVE INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them which means that we can disclose important information to you by referring
you to those documents instead of having to repeat the information in this
prospectus. The information incorporated by reference is considered to be part
of this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
the selling stockholder sells all the shares:
o Our quarterly reports on Form 10-Q for the quarters ended March 31,
2007 and June 30, 2007;
o Our annual report on Form 10-K for the fiscal year ended December 31,
2006;
o Our current reports on Form 8-K filed on January 5, 2007, February 12,
2007, March 1, 2007, March 9, 2007, April 3, 2007, June 18, 2007 and
October 11, 2007;
o Our definitive proxy statement filed on April 3, 2007;
o The description of our common stock set forth in our registration
statement on Form 8-A, filed with the Commission on June 13, 1996
(File No. 0-20859).
All documents we file under Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act after the date of this registration statement and prior to the filing of a
post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this registration statement and to be a part
of it from the respective dates of filing those documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein modifies
or supersedes that statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
registration statement.
We will furnish without charge to you, on written or oral request, a copy of
any or all of the documents incorporated by reference, including exhibits to
these documents. You should direct any requests for documents to David L.
Greenwood, Chief Financial Officer, Geron Corporation, 230 Constitution Drive,
Menlo Park, California 94025, telephone: (650) 473-7700.
21
50,000 SHARES OF COMMON STOCK
GERON CORPORATION
PROSPECTUS
October 30, 2007
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT
INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER
THAN THE DATE OF THIS PROSPECTUS. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES
IN ANY STATE WHERE THE OFFER IS NOT PERMITTED.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following sets forth the costs and expenses, all of which shall be borne
by the Registrant, in connection with the offering of the securities pursuant to
this Registration Statement:
Registration Fee $ 11
Accounting Fees and Expenses $10,000*
Legal Fees and Expenses $10,000*
Miscellaneous $ 1,500*
Total $21,511
* Estimated
Item 15. Indemnification of Directors and Officers.
Section 145(a) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a Delaware corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no cause to believe his
or her conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if he or she acted under similar standards to
those set forth above, except that no indemnification may be made in respect to
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine that despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to be indemnified for such
expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsection (a) and (b) or in the defense of any
claim, issue or matter therein, he or she shall be indemnified against expenses
actually and reasonably incurred by him or her in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against such officer
or director and incurred by him or her in any such capacity or arising out of
his or her status as such, whether or not the corporation would have the power
to indemnify him or her against such liabilities under Section 145.
As permitted by Section 102(b)(7) of the DGCL, our Certificate of
Incorporation provides that a director shall not be liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director.
However, this provision does not eliminate or limit the liability of a director
for acts or omissions not in good faith or for breaching his or her duty of
loyalty, engaging in intentional misconduct or knowingly violating the law,
paying a dividend or approving a stock repurchase which was illegal, or
obtaining an improper personal benefit. A provision of this type has no effect
on the availability of equitable remedies, such as injunction or rescission, for
breach of fiduciary duty. Our Certificate of Incorporation requires that
directors and officers be indemnified to the maximum extent permitted by
Delaware law.
II-1
Item 16. Exhibits.
See Exhibit Index.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering price
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
Provided, however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
Provided, however, that subparagraphs (i), (ii) and (iii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by
the registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement, or is contained in a form of prospectus filed pursuant to Rule 424(b)
that is a part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be treated as a new registration
statement of the securities offered, and the offering of the securities at that
time to be deemed the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(4) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Menlo Park, California, on October 30, 2007.
GERON CORPORATION
By: /s/ David L. Greenwood
--------------------------------
David L. Greenwood
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PERSONS PRESENT, that the persons whose signatures appear
below do hereby constitute and appoint Thomas B. Okarma and David L. Greenwood,
or any of them, our true and lawful attorneys-in-fact and agents, each with full
power to sign for us or any of us in our names and in any and all capacities,
any and all amendments (including post-effective amendments) to this
Registration Statement, or any related registration statement that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and to file the same, with all exhibits thereto and other documents
required in connection therewith with the Securities and Exchange Commission
hereby do ratifying and confirming all that each of said attorneys-in-fact, or
either of them, or his substitute or substitutes, shall do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Thomas B. Okarma Chief Executive Officer, October 30, 2007
--------------------------- President and Director
Thomas B. Okarma (principal executive officer)
Executive Vice President and
/s/ David L. Greenwood Chief Financial Officer October 30, 2007
--------------------------- (principal financial and
David L. Greenwood accounting officer)
/s/ Alexander E. Barkas Director October 30, 2007
---------------------------
Alexander E. Barkas
/s/ Edward V. Fritzky Director October 30, 2007
---------------------------
Edward V. Fritzky
/s/ Charles J. Homcy Director October 30, 2007
---------------------------
Charles J. Homcy
/s/ Thomas D. Kiley Director October 30, 2007
---------------------------
Thomas D. Kiley
Director
---------------------------
John P. Walker
/s/ Patrick J. Zenner Director October 30, 2007
---------------------------
Patrick J. Zenner
S-1
EXHIBIT INDEX
Exhibits Description
-------- -----------
4.1 Warrant dated November 5, 2004, by and between Registrant and
Lazard Freres & Co. LLC.
4.2 Warrant dated October 23, 2007, by and between Registrant and
Lazard Freres & Co. LLC.
5.1 Opinion of Latham & Watkins LLP.
23.1 Consent of Latham & Watkins LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, Independent Registered Public
Accounting Firm.
24.1 Power of Attorney (included on the signature page to this
Registration Statement).