Replies to post #13351 on Biotech Values

[DewDiligence]

Reaction to the MRK-GERN deal:

http://biz.yahoo.com/ap/050718/geron_merck.html?.v=1

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Geron, Merck in Vaccine Partnership

Monday July 18, 8:15 am ET

Geron Shares Soar in Premarket Activity on Cancer Vaccine Development Agreement With Merck

MENLO PARK, Calif. (AP) -- Geron Corp. shares surged 21 percent in Monday premarket activity, after the biopharmaceutical company said it will team with Merck & Co. to develop a cancer vaccine against telomerase.

Telomerase is an enzyme, active in most cancer cells, that maintains telomere length at the ends of chromosomes. This activity allows the cancer to grow and metastasize over long periods of time.

Under terms of the agreement, Geron will receive an upfront payment, milestone payments upon reaching certain development and regulatory targets, and royalties. Merck also has agreed to acquire equity in Geron at a future date as part of Geron's next round of financing. Additional financial terms were not disclosed.

Geron shares shot up $1.83, or 21.3 percent, to $10.43 in early electronic trading. Merck shares closed Friday at $31.91 on the New York Stock Exchange.

"We at Merck are excited about what Geron has demonstrated with telomerase in cancer. Our objective is to combine our technologies with the hope of bringing a product to market that may have application across a large number of cancers," said Stephen Friend, executive vice president of Advanced Technology and Oncology at Merck Research Laboratories. "This is a project of high interest and commitment at Merck, and is indicative of Merck's strategic direction in developing new anti-cancer therapies."

In addition, Merck acquired an exclusive option to negotiate a separate agreement for Geron's dendritic cell-based telomerase vaccine currently in Phase I/II clinical trials at Duke University Medical Center. Geron will receive an option payment from Merck in consideration for the option. The structure and terms of an agreement for the dendritic cell vaccine will be negotiated if Merck decides to exercise its rights under the option.

Geron currently has two anti-cancer products in the clinic that target telomerase: GRN163L, a telomerase inhibitor drug that has just received FDA clearance to begin testing in patients with chronic lymphocytic leukemia, and GRNVAC1, a telomerase therapeutic vaccine currently in multiple Phase I/II trials at Duke in patients with prostate cancer.
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