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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 10-Q/A
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO __________ .
COMMISSION FILE NUMBER: 0-20859
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GERON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 75-2287752
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
230 CONSTITUTION DRIVE, MENLO PARK, CA 94025
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (650) 473-7700
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK $0.001 PAR VALUE
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
<TABLE>
<S> <C>
Class: Common Stock $0.001 par value Outstanding at May 8, 2000: 21,423,981 shares
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GERON CORPORATION
INDEX
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<CAPTION>
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PART I. FINANCIAL INFORMATION
Item 1: Consolidated Financial Statements........................................... 3
Condensed Consolidated Balance Sheets as of March 31, 2000 and December 31, 3
1999........................................................................
Condensed Consolidated Statements of Operations for the three months ended
March 31, 2000 and 1999..................................................... 4
Condensed Consolidated Statements of Cash Flows for the three months ended 5
March 31, 2000 and 1999.....................................................
Notes to Consolidated Financial Statements.................................. 6
Item 2: Management's Discussion and Analysis of Financial Condition and Results of 9
Operations..................................................................
Item 3: Quantitative and Qualitative Disclosures About Market Risk.................. 25
PART II. OTHER INFORMATION
Item 1: Legal Proceedings........................................................... 26
Item 2: Changes In Securities and Use of Proceeds................................... 26
Item 3: Defaults upon Senior Securities............................................. 26
Item 4: Submission of Matters to a Vote of Security Holders......................... 26
Item 5: Other Information........................................................... 26
Item 6: Exhibits and Reports on Form 8-K............................................ 26
SIGNATURES................................................................................ 27
</TABLE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GERON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
RESTATED
MARCH 31, DECEMBER 31,
2000 1999
----------- ------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents ............. $ 52,525 $ 7,835
Short-term investments ................ 2,478 31,452
Interest and other receivables ........ 950 743
Other current assets .................. 569 399
--------- ---------
Total current assets .......... 56,522 40,429
Long-term investments ................... 22,916 3,636
Property and equipment, net ............. 3,567 3,783
Deposits and other assets ............... 939 576
Intangibles ............................. 14,561 15,277
--------- ---------
$ 98,505 $ 63,701
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ...................... $ 2,052 $ 1,321
Accrued liabilities ................... 2,814 2,723
Current portion of capital lease
obligations and equipment loans ..... 1,131 1,183
Current portion of accrued
research funding commitment ......... 2,699 2,721
--------- ---------
Total current liabilities ..... 8,696 7,948
Noncurrent portion of capital lease
obligations and equipment loans ..... 1,613 1,787
Accrued research funding commitment ..... 12,159 12,413
Convertible debentures .................. 6,313 15,327
Commitments
Stockholders' equity:
Common stock ............................ 21 17
Additional paid-in-capital .............. 182,940 131,183
Notes receivable from stockholders ...... -- (70)
Deferred compensation ................... (721) (853)
Accumulated deficit ..................... (112,453) (103,969)
Accumulated other comprehensive
(loss)/income ....................... (63) (82)
--------- ---------
Total stockholders' equity .... 69,724 26,226
--------- ---------
$ 98,505 $ 63,701
========= =========
</TABLE>
See accompanying notes.
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GERON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------------
RESTATED
2000 1999
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Revenues from collaborative agreements ...... $ 1,250 $ 1,494
License fees and royalties .................. 21 1
------------ ------------
Total revenues .......................... 1,271 1,495
Operating expenses:
Research and development .................. 5,812 4,425
General and administrative ................ 4,424 943
------------ ------------
Total operating expenses ................ 10,236 5,368
------------ ------------
Loss from operations ........................ (8,965) (3,873)
Interest and other income ................... 833 676
Interest and other expense .................. (352) (146)
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Net loss .................................... $ (8,484) $ (3,343)
Accretion of redemption value of
redeemable convertible preferred stock .... -- (51)
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Net loss applicable to common
stockholders .......................... $ (8,484) $ (3,394)
============ ============
Basic and diluted net loss per share ........ $ (0.45) $ (0.25)
============ ============
Weighted average shares used in
computing basic and diluted net loss
per share ................................. 18,709,106 13,663,948
============ ============
</TABLE>
See accompanying notes.
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GERON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CHANGE IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
(IN THOUSANDS)
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<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------
RESTATED
2000 1999
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Cash flows from operating activities:
Net loss .............................................................. $ (8,484) $ (3,343)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ...................................... 376 285
Interest from convertible debentures ............................... 62 60
Issuance of common and preferred stock in exchange
for services rendered ............................................ 2,253 191
Accretion of interest on research funding obligation ............... 123 --
Deferred compensation .............................................. 132 132
Changes in assets and liabilities:
Other current and noncurrent assets ................................ (24) (222)
Other current and noncurrent liabilities ........................... 1,531 153
Translation adjustment ............................................. (22) --
-------- --------
Net cash used in operating activities ................................... (4,053) (2,744)
Cash flows from investing activities:
Capital expenditures .................................................. (160) (1,501)
Purchases of securities available-for-sale ............................ (9,383) (12,552)
Proceeds from sales/calls of securities available-for-sale ............ 7,102 --
Proceeds from maturities of securities available-for-sale ............. 12,000 8,100
Accrued research funding payments ..................................... (383) --
-------- --------
Net cash provided by (used in) investing activities ..................... 9,176 (5,953)
Cash flows from financing activities:
Proceeds from equipment loans ......................................... 79 1,037
Payments of obligations under capital leases and equipment loans ...... (305) (336)
Proceeds from issuance of common and preferred stock, net ............. 39,793 15
-------- --------
Net cash provided by financing activities ............................... 39,567 716
-------- --------
Net increase (decrease) in cash and cash equivalents .................... 44,690 (7,981)
Cash and cash equivalents at the beginning of the period ................ 7,835 16,360
-------- --------
Cash and cash equivalents at the end of the period ...................... $ 52,525 $ 8,379
======== ========
</TABLE>
See accompanying notes.
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GERON CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying condensed consolidated unaudited balance sheet as of
March 31, 2000 and condensed consolidated statements of operations for the three
month period ended March 31, 2000 and 1999 have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March 31, 2000 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2000 or any other period. These financial statements and
notes should be read in conjunction with the financial statements for the year
ended December 31, 1999, included in the Company's Annual Report on Form 10-K.
The consolidated financial statements include the accounts of Geron
Corporation, and its wholly owned subsidiary, Geron Bio-Med Ltd., a company
organized under the laws of the United Kingdom. All material intercompany
accounts, transactions, and expenses have been eliminated in consolidation.
The financial statements of the Company's subsidiary outside the United
States are measured using the local currency as the functional currency. Assets
and liabilities of this subsidiary are translated at the rates of exchange at
the balance sheet date. The resultant translation adjustments are included in
accumulated other comprehensive income/(loss), a separate component of
stockholders' equity. Income and expense items are translated at average monthly
rates of exchange.
Certain reclassifications of prior year amounts have been made to conform
to current year presentation.
This report on Form 10-Q/A is being filed to restate the Consolidated
Financial Statements of the Company which were included in the Company's report
on Form 10-Q for the three months ended March 31, 2000 which was filed on May
15, 2000. The restatement was made to adjust the amounts recorded for a non-cash
charge for the value of stock and warrants issued during the second quarter of
2000, but earned for consulting services provided in the quarter ended March 31,
2000. This resulted in an increase to general and administrative expenses and
net loss of $1.9 million. Net loss has been restated to $8.5 million or $(0.45)
per share rather than a net loss of $6.6 million or $(0.35) per share, which was
reported in the Company's originally filed report on Form 10-Q. There was no
change to cash or total stockholders' equity.
NET LOSS PER SHARE
Basic earnings (loss) per share is calculated using the weighted average
number of common shares outstanding. Because the Company is in a net loss
position, diluted earnings per share is also calculated using the weighted
average number of common shares outstanding and excludes the effects of options,
warrants and convertible securities which are antidilutive. Had the Company been
in a net income position, diluted earnings per share would have included the
shares used in the computation of basic net loss per share as well as an
additional 2,104,315 and 1,508,453 shares for 2000 and 1999, respectively,
related to outstanding options and warrants not included above (as determined
using the treasury stock method at the estimated average market value).
COMPREHENSIVE LOSS
Comprehensive income (loss) is comprised of net income (loss) and other
comprehensive income (loss). Other comprehensive income (loss) includes certain
changes in equity that are excluded from net income (loss). Specifically,
unrealized holding losses on our available-for-sale securities of $88,000, which
were reported separately in stockholders' equity, and cumulative translation
adjustment of $25,000 are included in accumulated other comprehensive income
(loss). Comprehensive income (loss) for years ended December 31, 1999, 1998 and
1997 has been reflected in the consolidated statement of stockholders' equity.
REVENUE RECOGNITION
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 ("SAB 101"). SAB 101 summarizes certain areas of the
Staff's views in applying generally accepted accounting principles
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to revenue recognition. The Company has not completed its assessment of the
impact of SAB 101, but does not expect that the implementation of SAB 101 will
have a material effect.
2. CASH EQUIVALENTS AND INVESTMENTS
The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. The Company
places its cash and cash equivalents in interest-bearing money market funds,
municipal notes and commercial paper. As of March 31, 2000, the Company's
investments consisted primarily of corporate notes with maturities ranging from
three to 16 months.
3. CONVERTIBLE DEBENTURES
SERIES A AND B DEBENTURES AND WARRANTS
On December 10, 1998, the Company entered into an agreement to sell $15.0
million in convertible zero coupon debentures and warrants to purchase 1,250,000
shares of Common Stock at an exercise price of $12.00 per share to investment
funds managed by three institutional investors. One-half of the proceeds were
funded upon signing the agreement, at which time $7.5 million of series A
convertible debentures and warrants to purchase 625,000 shares of Common Stock
were issued. In June 1999, $7.5 million of series B convertible debentures and
warrants to purchase 625,000 shares of Common Stock were sold under the
agreement entered into in December 1998.
All of the series A convertible debentures had been converted into Common
Stock as of December 31, 1999. During the first quarter of 2000, an aggregate
principal amount of $3.0 million of series B convertible debentures converted
into 300,000 shares of Geron Common Stock at $10.00 per share. As of March 31,
2000, no series B convertible debentures remained outstanding.
During the first quarter of 2000, institutional investors exercised all of
the warrants issued with the series A and series B convertible debentures. The
Company received $15.0 million in proceeds from these warrant exercises.
SERIES C DEBENTURES AND WARRANTS
On September 30, 1999, the Company sold $12.5 million in series C
convertible two-percent coupon debentures and warrants to purchase 1,100,000
shares of Common Stock to an institutional investor. The debentures are
convertible at any time by the holder at a fixed conversion price of $10.25 per
share. The debentures convert at the Company's option when the Common Stock has
traded at a certain premium to the fixed conversion price for ten consecutive
trading days.
The warrants to purchase 1,000,000 shares of Common Stock are exercisable
at $12.50 per share and the warrants to purchase 100,000 shares of Common Stock
are exercisable at $12.75 per share. The warrants are exercisable for Common
Stock at the option of the holder until June 2, 2001.
During the first quarter 2000, an aggregate principal amount of $6.25
million of series C convertible debentures plus accrued interest converted into
615,069 shares of Geron Common Stock at $10.25 per share. As of March 31, 2000,
an aggregate principal amount of $6.25 million of series C convertible
debentures remained outstanding.
During the first quarter of 2000, all of the warrants issued with the
series C convertible debentures were exercised. The Company received $13.8
million in proceeds from the warrant exercises.
4. PRIVATE FINANCING
In March 2000, Geron sold a total of 380,855 shares of Common Stock and
warrants to purchase 300,000 shares of its common stock to a single investor for
$9.0 million. Warrants to purchase 100,000 shares of Common Stock are
exercisable at $12.50 per share and the warrants to purchase 200,000 shares of
Common Stock are exercisable at $67.09 per share.
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5. SEGMENT INFORMATION
The Company adopted Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS
131") in its fiscal year ended December 31, 1998. SFAS 131 establishes standards
for reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision making group, in making decisions
how to allocate resources and assess performance. The Company's chief decision
maker, as defined under SFAS 131, is the Chief Executive Officer. To date, the
Company has viewed its operations as principally one segment, the discovery and
development of therapeutic and diagnostic products for applications in oncology,
drug discovery and regenerative medicine. As a result, the financial information
disclosed herein materially represents all of the financial information related
to the Company's principal operating segment.
6. UNAUDITED PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma consolidated statement of operations data for the
three months ended March 31, 1999 set forth below gives effect to the
acquisition of Roslin Bio-Med Ltd. as if it occurred on January 1, 1999.
<TABLE>
<CAPTION>
(IN THOUSANDS, THREE MONTHS ENDED
EXCEPT PER SHARE AMOUNTS) MARCH 31, 1999
------------------
<S> <C>
Revenues................................... $ 1,495
Net loss................................... $(10,147)
Basic and diluted net loss per share....... $ (0.66)
</TABLE>
7. CONSOLIDATED STATEMENT OF CASH FLOW DATA
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<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
(IN THOUSANDS) MARCH 31, 2000 MARCH 31, 1999
------------------ ------------------
<S> <C> <C>
Supplementary investing and
financing activities
Common stock issued for services ............. $ 709 $ --
Accretion of premium on convertible
preferred stock ............................ $ -- $ 51
Conversion of convertible debentures, net .... $ 9,076 $ --
Net unrealized gain (loss) on
available-for-sale securities .............. $ (25) $ 67
</TABLE>
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GERON CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
This Form 10-Q contains forward-looking statements that involve risks and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend" and similar expressions to identify forward-looking
statements. These statements appear throughout the Form 10-Q and are statements
regarding our intent, belief, or current expectations, primarily with respect to
our operations and related industry developments. You should not place undue
reliance on these forward-looking statements, which apply only as of the date of
this Form 10-Q. Our actual results could differ materially from those
anticipated in these forward-looking statements for many reasons, including the
risks faced by us and described under the heading "Risk Factors" in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999, in the section of this Item 2 titled "Additional Factors That May Affect
Future Results," and elsewhere in this Form 10-Q.
The following discussion should be read in conjunction with the unaudited
financial statements and notes thereto included in Part I, Item 1 of this
Quarterly Report and with Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999.
We are a biopharmaceutical company focused on discovering, developing and
commercializing therapeutic and diagnostic products for applications in
oncology, drug discovery and regenerative medicine. Our product development
programs are based upon three patented, independent and synergistic
technologies: telomerase, human pluripotent stem cells and nuclear transfer.
Since inception, substantially all of our revenues have been generated
from license and research agreements with collaborators. In addition, we receive
license payments and royalties from license and marketing agreements with
various diagnostic and research tool collaborators. We recognize revenue from
the license and research agreements with collaborators as the related research
and development costs are incurred under the collaborative agreements.
In January 2000, we extended our three-way license and research
collaboration agreement with Kyowa Hakko and Pharmacia. The agreement extends
the research and compound selection periods by one additional year to March 2002
and provides for additional research funding. In January 2000, we received $1.25
million from Pharmacia. In April 2000, we received $2.0 million from Kyowa Hakko
as a result of their extension.
In March 2000, we sold a total of 380,855 shares of our common stock and
300,000 warrants to purchase our common stock to a single investor for $9.0
million. We structured the sale of securities in two parts. We priced the first
$6.4 million of common stock at $50.32 per share, and set the exercise price for
200,000 warrants at $67.09 per share. We priced the remaining $2.6 million of
common stock at $10.25 per share, and set the exercise price for the remaining
100,000 warrants at $12.50 per share. The common stock and the common stock
underlying the warrants are not registered for resale and are subject to a
two-year prohibition on sale by agreement. As of March 31, 2000, all of the
warrants remained outstanding.
During the first quarter of 2000, institutional investors exercised series
A warrants to purchase 625,000 shares of Geron common stock, series B warrants
to purchase 625,000 shares of Geron common stock and series C warrants to
purchase 1,100,000 shares of Geron common stock. In total, we received $28.8
million in proceeds from the exercise of these warrants.
In the first quarter of 2000, an institutional investor converted an
aggregate principal amount of $6.25 million plus accrued interest of series C
convertible debentures into 615,069 shares of Geron common stock. In addition,
an institutional investor converted an aggregate principal amount of $3.0
million of series B convertible debentures into 300,000 shares of Geron common
stock. As of March 31, 2000, an aggregate principal amount of $6.25 million of
series C convertible debentures and no series B convertible debentures remained
outstanding.
This report on Form 10-Q/A is being filed to restate the Consolidated
Financial Statements of the Company which were included in the Company's report
on Form 10-Q for the three months ended March 31, 2000 which was filed on May
15, 2000. The restatement was made to adjust the amounts recorded for a non-cash
charge for the value of stock and warrants issued during the second quarter of
2000, but earned for consulting services provided in the quarter ended March 31,
2000. This resulted in an increase to general and administrative expenses and
net loss of $1.9 million. Net loss has been restated to $8.5 million or $(0.45)
per share rather than a net loss of $6.6 million or $(0.35) per share, which was
reported in the Company's originally filed report on Form 10-Q. There was no
change to cash or total stockholders' equity.
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Our results of operations have fluctuated from period to period and may
continue to fluctuate in the future based upon the timing and composition of
funding under our various collaborative agreements, as well as the progress of
our research and development efforts and variations in the level of expenses
related to developmental efforts during any given period. Results of operations
for any period may be unrelated to results of operations for any other period.
In addition, historical results should not be viewed as indicative of future
operating results. We are subject to risks common to companies in our industry
and at our stage of development, including risks inherent in our research and
development efforts, reliance upon our collaborative partners, enforcement of
our patent and proprietary rights, need for future capital, potential
competition and uncertainty of regulatory approvals or clearances. In order for
a product to be commercialized based on our research, we and our collaborators
must conduct preclinical tests and clinical trials, demonstrate the efficacy and
safety of our product candidates, obtain regulatory approvals or clearances and
enter into manufacturing, distribution and marketing arrangements, as well as
obtain market acceptance. We do not expect to receive revenues or royalties
based on therapeutic products for a period of years, if at all.
RESULTS OF OPERATIONS
REVENUES
We recognized revenues from collaborative agreements of $1.3 million for
the three months ended March 31, 2000, compared to $1.5 million for the
comparable period in 1999. Revenues in 2000 represented research support
payments from our collaborative agreement with Pharmacia. Revenues in 1999
represented research support payments from our collaborative agreements with
Pharmacia and Kyowa Hakko. Lower revenues in 2000 were a result of reduced
research funding from Kyowa Hakko. We expect revenues from collaborative
agreements to increase in the remainder of 2000 as compared to 1999 as a result
of the renewed research commitments from Kyowa Hakko and Pharmacia. As a result
of the extensions of our agreements with these parties, these agreements provide
for additional funding from Kyowa Hakko and Pharmacia.
We receive license payments and royalties from license and marketing
agreements with various diagnostic collaborators. We received royalties of
$21,000 for the three months ended March 31, 2000, from Kyowa Medex, Intergen,
Roche Diagnostics, and PharMingen (a Becton Dickinson company) on the sale of
diagnostic kits to the research-use-only market, compared to $1,000 for the
comparable period in 1999. We did not receive any license fees in the first
quarter of 2000 or for the comparable period in 1999.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses were $5.8 million for the three months
ended March 31, 2000, compared to $4.4 million for the comparable period in
1999. The increase in research and development expenses in the 2000 period
compared to the 1999 period was primarily the result of amortization of the
research obligation to the Roslin Institute of $700,000, increased personnel
related costs of $200,000, additional research expenditures of $190,000 at Geron
Bio-Med and increased scientific supplies of $150,000. We expect research and
development expenses to increase significantly in the future as a result of
continued development of our therapeutic and diagnostic programs.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses were $4.4 million for the three months
ended March 31, 2000, compared to $943,000 for the comparable period in 1999.
The increase in general and administrative expenses in the 2000 period compared
to the 1999 period was primarily the result of increased business consulting
costs of $3.0 million, $240,000 in administrative expenses at Geron Bio-Med,
increased personnel related costs of $150,000, and increased public and investor
relations costs of $100,000.
INTEREST AND OTHER INCOME
Interest income was $793,000 for the three months ended March 31, 2000,
compared to $556,000 for the comparable period in 1999. The increase in interest
income for 2000 compared to 1999 was primarily the result of higher cash
balances in 2000 than 1999 as a result of receiving proceeds of $28.8 million
from the exercise of warrants and $9.0 million from the sale of common stock to
a private investor. Interest earned in the future will depend on any future
funding cycles and prevailing interest rates. We also received $40,000 in
research payments
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under government grants for the three months ended March 31, 2000, compared to
$120,000 for the comparable period in 1999. We expect income from government
grants to decrease in the future.
INTEREST AND OTHER EXPENSE
Interest and other expense was $352,000 for the three months ended March
31, 2000, compared to $146,000 for the comparable period in 1999. The increase
in interest and other expense for 2000 compared to 1999 was primarily the result
of imputing interest for the accretion of our research funding obligation to the
Roslin Institute of $123,000, and accrual of interest on series C convertible
debentures of $54,000.
NET LOSS
Net loss was $8.5 million for the three months ended March 31, 2000,
compared to $3.3 million for the comparable period in 1999. The increase in net
loss for 2000 compared to 1999 was primarily the result of increased operating
expenses combined with a decline in revenues from collaborative agreements. We
expect net loss to increase in the future as a result of increased operating
expenses.
LIQUIDITY AND CAPITAL RESOURCES
Cash, cash equivalents and investments at March 31, 2000 were $77.9
million compared to $42.9 million at December 31, 1999. The increase in cash,
cash equivalents and investments in 2000 was the result of proceeds received
from the exercise of warrants and the sale of common stock to a private
investor. We have an investment policy to invest these funds in liquid,
investment-grade securities, such as interest-bearing money market funds,
commercial paper and federal agency notes.
Net cash used in operations was $4.1 million for the three months ended
March 31, 2000 compared to $2.7 million for the comparable period in 1999. The
increase was primarily due to a higher net loss recognized in 2000 as a result
of increased operating expenses in 2000 with a decrease in revenues from
collaborative agreements offset partially by non-cash stock related charges. We
expect net cash used in operations to increase as a result of increased research
and development expenditures.
Through March 31, 2000, we have invested approximately $9.9 million in
property and equipment, of which approximately $7.5 million was financed through
equipment financing. For the three months ended March 31, 2000, additions of
equipment and leasehold improvements totaled approximately $160,000, most of
which were financed through equipment financing arrangements. Minimum annual
payments due under the equipment financing arrangements are expected to total
$1.2 million, $895,000, $772,000, $182,000 and $2,000 in 2000, 2001, 2002, 2003
and 2004, respectively. As of March 31, 2000, we had approximately $1.0 million
available for borrowing under our equipment financing arrangements. The drawdown
period under the equipment financing arrangements expires on July 31, 2000. We
intend to renew the commitment for new equipment financing arrangements in 2000
to further fund equipment purchases. If we are unable to renew the commitment,
then we will need to spend our own resources for equipment purchases.
We have agreed to fund scientific research at academic and research
institutions. Under these research arrangements, we are obligated to make
minimum annual payments of approximately $3.1 million and $2.5 million in 2000
and 2001, respectively. As of March 31, 2000, we have made payments of
approximately $698,000 to academic and research institutions.
In March 2000, we sold a total of 380,855 shares of our common stock and
300,000 warrants to purchase our common stock to a single investor for $9
million. We structured the sale of securities in two parts. We priced the first
$6.4 million of common stock at $50.32 per share, and set the exercise price for
200,000 warrants at $67.09 per share. We priced the remaining $2.6 million of
common stock at $10.25 per share, and set the exercise price for the remaining
100,000 warrants at $12.50 per share. The common stock and the stock underlying
the warrants are not registered for resale and are subject to a two-year
prohibition on sale by agreement. As of March 31, 2000, all of the warrants
remained outstanding.
During the first quarter of 2000, institutional investors exercised series
A warrants to purchase 625,000 shares of Geron common stock, series B warrants
to purchase 625,000 shares of Geron common stock and series C warrants
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to purchase 1,100,000 shares of Geron common stock. In total, we received $28.8
million in proceeds from the exercise of these warrants.
In the first quarter of 2000, an institutional investor converted an
aggregate principal amount of $6.25 million plus accrued interest of series C
convertible debentures into 615,069 shares of Geron common stock. In addition,
an institutional investor converted an aggregate principal amount of $3.0
million of series B convertible debentures into 300,000 shares of Geron common
stock. As of March 31, 2000, an aggregate principal amount of $6.25 million of
series C convertible debentures and no series B convertible debentures remained
outstanding.
We estimate that our existing capital resources, payments expected to be
made under the Kyowa Hakko and Pharmacia collaborative agreements, interest
income and equipment financing will be sufficient to fund our current level of
operations through June 2002. Changes in our research and development plans or
other changes affecting our operating expenses may result in the expenditure of
available resources before such time, and in any event, we will need to raise
substantial additional capital to fund our operations in the future. We intend
to seek additional funding through strategic collaborations, public or private
equity financings, capital lease transactions or other financing sources that
may be available.
YEAR 2000 COMPUTER SYSTEMS COMPLIANCE
All of our computer hardware and software has been upgraded for Year 2000
compliance. All of our key vendors have provided assurance that they are Year
2000 compliant. While we are aware of no Year 2000 related problems at the
commencement of the Year 2000, we are maintaining our contingency plans in the
event any problems arise in the future.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
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 Form 10-Q. Any of these risks could materially
adversely affect our business, operating results and financial condition.
OUR BUSINESS IS AT AN EARLY STAGE OF DEVELOPMENT AND WE MAY NOT DEVELOP ANY
PRODUCTS THAT REACH CLINICAL TRIALS
The study of the mechanisms of cellular aging and cellular immortality,
including telomere biology and telomerase, the study of human pluripotent stem
cells, and the process of nuclear transfer are relatively new areas of research.
Our business is at an early stage of development. We have not yet produced any
products that have progressed to clinical trials and we may never do so. Our
ability to produce products that progress to clinical trials is subject to our
ability to, among other things:
- continue to have success with our research and development efforts;
- select therapeutic compounds for development;
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- obtain the required regulatory approvals; and
- manufacture and market resulting products.
If and when potential lead drug compounds or product candidates are
identified through our research programs, they will require significant
preclinical and clinical testing prior to regulatory approval in the United
States and elsewhere. In addition, we will also need to determine whether any of
these potential products can be manufactured in commercial quantities at an
acceptable cost. Our efforts may not result in a product that can be marketed.
Because of the significant scientific, regulatory and commercial milestones that
must be reached for any of our research programs to be successful, any program
may be abandoned, even after significant resources have been expended.
WE HAVE A HISTORY OF OPERATING LOSSES AND ANTICIPATE FUTURE LOSSES; CONTINUED
LOSSES COULD IMPAIR OUR ABILITY TO SUSTAIN OPERATIONS
We have incurred net operating losses every year since our operations
began in 1990. As of March 31, 2000, our accumulated deficit was approximately
$112.5 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 over the next several years as our research and
development efforts and preclinical testing activities are expanded.
Substantially all of our revenues to date have been research support payments
under the collaboration agreements with Kyowa Hakko and Pharmacia. The
agreements provide that through 2001, Kyowa Hakko and Pharmacia will provide
additional funding. We may be unsuccessful in entering into any new corporate
collaboration that results in revenues. Even if we are able to obtain new
collaboration arrangements with third parties the revenues generated from these
arrangements will be insufficient to continue or expand our research activities
and otherwise sustain our operations.
We are unable to estimate at this time the level of revenue to be received
from the sale of diagnostic products, and do not currently expect to receive
significant revenues from the sale of research-use-only kits. Our ability to
continue or expand our research 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 may never receive material revenues from product sales or that
revenues, if any, may not be sufficient to continue or expand our research
activities and otherwise sustain our operations.
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 products. While we estimate that our existing capital
resources, payments under the Kyowa Hakko and Pharmacia collaborative
agreements, interest income and equipment financing arrangements will be
sufficient to fund our current level of operations through June 2002, we cannot
guarantee that this will be the case. The timing and degree of any future
capital requirements will depend on many factors, including:
- the accuracy of the assumptions underlying our estimates for our
capital needs in 2000 and beyond;
- continued scientific progress in our research and development
programs;
- the magnitude and scope of our research and development programs;
- our ability to maintain and establish strategic arrangements for
research, development, clinical testing, manufacturing and
marketing;
- our progress with preclinical and clinical trials;
- the time and costs involved in obtaining regulatory approvals;
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- the costs involved in preparing, filing, prosecuting, maintaining,
defending and enforcing patent claims; and
- the potential for new technologies and products.
We intend to acquire additional funding through strategic collaborations,
public or private equity financings and capital lease transactions. Additional
financing may not be available on acceptable terms, or at all. Additional equity
financings 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 products that we would otherwise seek to
develop or 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
research or development programs, each of which could have a material adverse
effect on our business.
OUR INABILITY TO IDENTIFY AN EFFECTIVE INHIBITOR FOR TELOMERASE MAY PREVENT US
FROM DEVELOPING A VIABLE CANCER TREATMENT PRODUCT, WHICH WOULD ADVERSELY IMPACT
OUR FUTURE BUSINESS PROSPECTS
As a result of our drug discovery efforts to date, we have identified
compounds in laboratory studies that demonstrate potential for inhibiting
telomerase in humans. However, additional development efforts will be required
before we select a lead compound for preclinical development and clinical trials
as a telomerase inhibitor for cancer. We will have to conduct additional
research before we can select a compound and we may never identify a compound
that will enable us to fully develop a commercially viable treatment for cancer.
If and when selected, a lead compound may prove to have undesirable and
unintended side effects or other characteristics affecting its safety or
effectiveness that may prevent or limit its commercial use. In terms of safety,
our discoveries may result in cancer treatment solutions that cause unacceptable
side effects for the human body. Our discoveries may also not be as effective as
is necessary to market a commercially viable product for the treatment of
cancer. As a result, telomerase inhibition may need to be used in conjunction
with other cancer therapies. Accordingly, it may become extremely difficult for
us to proceed with preclinical and clinical development, to obtain regulatory
approval or to market a telomerase inhibitor for the treatment of cancer. If we
abandon our research for cancer treatment for any of these reasons or for other
reasons, our business prospects would be materially and adversely affected.
IF OUR ACCESS TO NECESSARY TISSUE SAMPLES, INFORMATION OR LICENSED TECHNOLOGIES
IS RESTRICTED, WE WILL NOT BE ABLE TO DEVELOP OUR BUSINESS
To continue the research and development of our therapeutic and diagnostic
products, we need access to normal and diseased human and other tissue samples,
other biological materials and related clinical and other information. We
compete with many other companies for these materials and information. We may
not be able to obtain or maintain access to these materials and information on
acceptable terms, if at all. In addition, government regulation in the United
States and foreign countries could result in restricted access to, or
prohibiting the use of, human and other tissue samples. If we lose access to
sufficient numbers or sources of tissue samples, or if tighter restrictions are
imposed on our use of the information generated from tissue samples, our
business will 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.
We believe that other pharmaceutical and biotechnology companies and research
organizations currently engage in or have in the past engaged in efforts related
to the biological mechanisms of cell aging and cell immortality, including the
study of telomeres, telomerase, human pluripotent stem cells, and nuclear
transfer. In addition, other products and therapies that could compete directly
with the products 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 also developing alternative therapies to treat cancer
and, in this regard, are competitors of ours. Many of the pharmaceutical
companies developing and marketing these competing products have significantly
greater financial resources and expertise than we do in:
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- research and development;
- manufacturing;
- preclinical and clinical testing;
- obtaining regulatory approvals; and
- marketing.
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.
There is also competition for access to libraries of compounds to use for
screening. Should we fail to secure and maintain access to sufficiently broad
libraries of compounds for screening potential targets, our business would be
materially harmed.
In addition to the above factors, we expect to face competition in the
following areas:
- product efficacy and safety;
- the timing and scope of regulatory consents;
- availability of resources;
- reimbursement coverage;
- price; and
- 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 us. Most significantly, competitive products may render
the products that we develop obsolete.
THE ETHICAL, LEGAL AND SOCIAL IMPLICATIONS OF OUR RESEARCH USING PLURIPOTENT
STEM CELLS AND NUCLEAR TRANSFER COULD PREVENT US FROM DEVELOPING OR GAINING
ACCEPTANCE FOR COMMERCIALLY VIABLE PRODUCTS IN THIS AREA
Our programs in regenerative medicine may involve the use of human
pluripotent stem cells that would be derived from human embryonic or fetal
tissue. The use of human pluripotent stem cells gives rise to ethical, legal and
social issues regarding the appropriate use of these cells. In the event that
our research related to human pluripotent stem cells becomes the subject of
adverse commentary or publicity, the market price for our common stock could be
significantly harmed.
Some groups have voiced opposition to our technology and practices. The
concepts of cell regeneration, cell immortality, and genetic cloning have
stimulated significant ethical debates in both the social and political arenas.
We use human pluripotent stem cells derived through a process that uses either
donated embryos that are no longer necessary following a successful in vitro
fertilization procedure or donated fetal material as the starting material.
Further, many research institutions, including some of our scientific
collaborators, have adopted policies regarding the ethical use of human
embryonic and fetal tissue. These policies may have the effect of limiting the
scope of research conducted using human pluripotent stem cells, resulting in
reduced scientific progress. In addition, the United States government and its
agencies currently do not fund research which involves the use of human
embryonic tissue and may in the future regulate or otherwise restrict or
prohibit the public or private use of human embryonic or fetal tissue. Our
inability to conduct research
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using human pluripotent stem cells due to such factors as government regulation
or otherwise could have a material adverse effect on us. Finally we acquired
Roslin Bio-Med to gain the rights to nuclear transfer technology. The Roslin
Institute produced Dolly the sheep in 1997 -- the first mammal cloned from an
adult cell in history. Geron acquired exclusive rights to this technology for
all areas except human cloning and certain other limited applications. Although
we will not be pursuing human reproductive cloning, all of the techniques we
continue to develop for use in agricultural cloning and our nuclear transfer
work for organ regeneration are directly applicable to human cloning should some
other group in the future decide to pursue this avenue. Negative associations
with any or all of these practices could:
- harm our ability to establish critical partnerships and
collaborations;
- prompt government regulation of our technologies;
- cause delays in our research and development; and
- cause a decrease in the price of our stock.
Also, if regulatory bodies were to ban nuclear transfer processes, our
research using nuclear transfer technology could be cancelled and our business
could be significantly harmed.
PUBLIC ATTITUDES TOWARDS GENE THERAPY MAY NEGATIVELY AFFECT REGULATORY
APPROVAL OR PUBLIC PERCEPTION OF OUR PRODUCTS
The commercial success of our product candidates will depend in part on
public acceptance of the use of gene therapies for the prevention or treatment
of human diseases. Public attitudes may be influenced by claims that gene
therapy is unsafe, and gene therapy may not gain the acceptance of the public or
the medical community. Adverse events in the field of gene therapy that have
occurred or may occur in the future also may result in greater governmental
regulation of our product candidates and potential regulatory delays relating to
the testing or approval of our product candidates.
Negative public reaction to gene therapy in the development of certain of
our therapies could result in greater government regulation, stricter clinical
trial oversight, commercial product labeling requirements of gene therapies and
could cause a decrease in the demand for any products that we may develop. The
subject of genetically modified organisms has received negative publicity in
Europe, which has aroused public debate. The adverse publicity in Europe could
lead to greater regulation and trade restrictions on imports of genetically
altered products. If similar adverse public reaction occurs in the United
States, genetic research and resultant products could be subject to greater
domestic regulation and could cause a decrease in the demand for our potential
products.
EVEN IF WE REACH CLINICAL TRIALS WITH ONE OR MORE OF OUR PRODUCTS, THEY MAY NOT
RESULT IN ANY COMMERCIALLY VIABLE PRODUCTS
We do not expect to generate any significant revenues from product sales
for a period of several years. We may never generate revenues from product sales
or become profitable because of a variety of risks inherent in our business,
including risks that:
- clinical trials may not demonstrate the safety and efficacy of our
products;
- completion of clinical trials may be delayed, or costs of clinical
trials may exceed anticipated amounts;
- we may not be able to obtain regulatory approval of our products, or
may experience delays in obtaining such approvals;
- we may not be able to manufacture our drugs economically on a
commercial scale;
- we and our licensees may not be able to successfully market our
products;
- physicians may not prescribe our products, or patients may not
accept such products;
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- others may have proprietary rights which prevent us from marketing
our products; and
- competitors may sell similar, superior or lower-cost products.
IMPAIRMENT OF OUR INTELLECTUAL PROPERTY RIGHTS MAY LIMIT OUR ABILITY TO PURSUE
THE DEVELOPMENT OF OUR INTENDED TECHNOLOGIES AND PRODUCTS
Our success will depend on our ability to obtain and enforce patents for our
discoveries; however, legal principles for biotechnology patents in the United
States and in other countries are not firmly established and the extent to which
we will be able to obtain patent coverage is uncertain
Protection of our proprietary compounds and 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. The patent positions of pharmaceutical and
biopharmaceutical companies, including ours, are highly uncertain and involve
complex legal and technical questions for which legal principles are not firmly
established. We may not continue to develop products or processes that are
patentable, and it is possible that patents will not issue from any of our
pending applications, including allowed patent applications. Further, our
current patents, or patents that issue on pending applications, may be
challenged, invalidated or circumvented, and our current or future patent rights
may not provide proprietary protection or competitive advantages to us. In the
event that we are unsuccessful in obtaining and enforcing patents, our business
would be negatively impacted.
Patent applications in the United States are maintained in secrecy until
patents issue. Publication of discoveries in the 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
file patent applications for these inventions. As a result, we may not be able
to obtain patents from discoveries that we otherwise would consider patentable
and that we consider to be extremely significant to our future success.
Patent prosecution or litigation may also be necessary to obtain patents,
enforce any patents issued or licensed to us or to determine the scope and
validity of our proprietary rights or the proprietary rights of another. We may
not be successful in any patent prosecution or litigation. Patent prosecution
and litigation in general can be extremely expensive and time consuming, even if
the outcome is favorable to us. An adverse outcome in a patent prosecution,
litigation 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.
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 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 research programs. In the event our technologies do infringe
on 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 these patents or other proprietary rights or develop or
obtain alternative technologies. We may not be able to obtain alternative
technologies or any required license on commercially favorable terms, if at all.
If we do not obtain the necessary licenses or alternative technologies, we may
be delayed or prevented from pursuing the development of some potential
products. Our breach of an existing license or failure to obtain alternative
technologies or a license to any technology that we may require to develop or
commercialize our products will significantly and negatively affect our
business.
Patent law relating to the scope and enforceability of claims in the
technology fields in which we operate is still evolving, and the degree of
future protection for any of our proprietary rights is highly uncertain. In this
regard, patents may not issue from any of our patent applications. As a result,
our success may become dependent on our ability to obtain licenses for using the
patented discoveries of others. We are aware of patent applications and
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patents that have been filed by others with respect to our technologies and we
may have to obtain licenses to use these technologies. Moreover, other patent
applications may be granted priority over patent applications that we or any of
our licensors have filed. Furthermore, others may independently develop similar
or alternative technologies, duplicate any of our technologies or design around
the patented technologies we have developed. In the event that we are unable to
acquire licenses to critical technologies that we cannot patent ourselves, we
may be required to expend significant time and resources to develop similar
technology, and we may not be successful in this regard. If we cannot acquire or
develop the necessary technology, we may be prevented from pursuing some of our
business objectives. Moreover, one of our competitors could acquire or license
the necessary technology. Any of these events could materially harm our
business.
We may be subject to claims or litigation as a result of entering into
license agreements with third parties or infringing on the patents of others.
For example, we signed a licensing and sponsored research agreement relating to
our research relating to pluripotent stem cells with The Johns Hopkins
University School of Medicine in August 1997. Prior to signing this agreement,
we had been informed by a third party that we and Johns Hopkins University would
violate the rights of that third party and another academic institution in doing
so. After a review of the correspondence with the third party and Johns Hopkins
University, as well as related documents, including an issued United States
patent, we believe that both we and Johns Hopkins University have substantial
defenses to any claims that might be asserted by the third party. We have agreed
to provide indemnification to Johns Hopkins University relating to potential
claims. However, any litigation resulting from this matter may divert
significant resources, both financial and otherwise, from our research programs.
We may be unsuccessful if the matter is litigated. If the outcome of litigation
is unfavorable to us, our business could be materially and adversely affected.
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 rely extensively on trade secrets to protect our proprietary
technology, especially in circumstances in which patent protection is not
believed to be appropriate or obtainable. We attempt to protect our proprietary
technology in part by confidentiality agreements with our employees, consultants
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.
SOME OF OUR PATENTS AND PATENT APPLICATIONS RELATING TO TELOMERASE MAY BE
SUBJECT TO CHALLENGE OR BE SUSPENDED BY THE UNITED STATES PATENT AND TRADEMARK
OFFICE, WHICH COULD JEOPARDIZE OUR ABILITY TO COMMERCIALIZE TELOMERASE PRODUCTS
Our patents and patent applications relating to telomerase are critically
important to our development and commercialization of therapeutic and diagnostic
products for applications in oncology and regenerative medicine. Patent
applications covering cloned human telomerase and its uses are pending in
several countries and patent prosecution is ongoing. Although we have been
granted patents in the United Kingdom and Switzerland, we have received
rejections in certain other countries and we may be unable to overcome those
rejections or any others that we may encounter.
The United States Patent and Trademark Office has advised us that the
claims of two of our United States patent applications relating to cloned human
telomerase are allowable, but that further prosecution of these applications has
been suspended pending a determination of whether the initiation of an
interference proceeding is appropriate to ascertain who made the claimed
inventions first. We believe this event indicates, among other things, that the
Patent and Trademark Office has established that at least one other entity has
filed a United States patent application also claiming cloned human telomerase
or its uses. As a result, one or more interferences could be declared, in which
case the United States Patent and Trademark Office would undertake a multi-year
process to decide who made the underlying invention or inventions first. If an
interference is declared one result is that another entity could be awarded the
patents.
Based on the information presently available to us, we believe that we
cloned human telomerase protein prior to any other entity. However, we do not
yet have access to other entities' invention records or their patent application
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files, which are maintained in secrecy by the United States Patent and Trademark
Office. We, therefore, do not have access to all pertinent information for this
analysis. Moreover, as interferences are typically complex, highly contested
legal proceedings subject to appeal, accurately predicting an outcome is not
possible, particularly at this stage. An interference would divert significant
resources, both financial and otherwise, from our research programs.
If interferences or other challenges to our patents are not resolved
promptly in our favor, our existing business relationships could be jeopardized
and we could be delayed or prevented from entering into new collaborations or
from commercializing telomerase products, which could materially harm our
business.
WE DEPEND ON OUR COLLABORATORS TO HELP US COMPLETE THE PROCESS OF DEVELOPING AND
TESTING OUR PRODUCTS AND OUR ABILITY TO DEVELOP AND COMMERCIALIZE PRODUCTS MAY
BE IMPAIRED OR DELAYED IF OUR COLLABORATIVE PARTNERSHIPS ARE UNSUCCESSFUL
Our strategy for the development, clinical testing and commercialization
of our products requires entering into collaborations with corporate 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. 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 our research 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.
Our ability to successfully develop and commercialize telomerase
inhibition products depends on our corporate alliances with Kyowa Hakko and
Pharmacia, and our ability to successfully develop and commercialize telomerase
diagnostic products depends on our corporate alliance with Roche Diagnostics.
Under our collaborative agreements with these collaborators, we rely
significantly on them, among other activities, to:
- design and conduct advanced clinical trials in the event that we
reach clinical trials;
- fund research and development activities with us;
- pay us fees upon the achievement of milestones; and
- co-promote with us any commercial products that result from our
collaborations.
The development and commercialization of products from these
collaborations will be delayed if Kyowa Hakko, Pharmacia or Roche Diagnostics
fail to conduct these collaborative activities in a timely manner or at all. In
addition, Kyowa Hakko, Pharmacia or Roche Diagnostics could terminate these
agreements and we may not receive any development or milestone payments. If we
do not receive research funds or achieve milestones set forth in the agreements,
or if Kyowa Hakko, Pharmacia or Roche Diagnostics or any of our future
collaborators breach or terminate collaborative agreements with us, our business
may be materially harmed.
OUR RELIANCE ON THE RESEARCH ACTIVITIES OF OUR NON-EMPLOYEE SCIENTIFIC ADVISORS
AND OTHER RESEARCH INSTITUTIONS, WHOSE ACTIVITIES ARE NOT WHOLLY WITHIN OUR
CONTROL, MAY LEAD TO DELAYS IN TECHNOLOGICAL DEVELOPMENTS
We rely extensively and have relationships with scientific advisors at
academic and other institutions, some of whom conduct research at our request.
These scientific advisors 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
advisors 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. If our scientific advisors are unable or refuse to contribute to the
development of any of our potential discoveries, our ability to generate
significant advances in our technologies will be significantly harmed.
In addition, we have formed research collaborations with many academic and
other research institutions throughout the world, including the Roslin
Institute. 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 time to be dedicated
to our research goals.
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UNEXPECTED COSTS AND OTHER DIFFICULTIES ARISING FROM OUR ACQUISITION OF ROSLIN
BIO-MED LTD. AND SIMULTANEOUS RESEARCH COLLABORATION WITH THE ROSLIN INSTITUTE
MAY DRAIN HUMAN AND FINANCIAL RESOURCES, OR OTHERWISE NEGATIVELY AFFECT OUR
OPERATIONS
In May 1999, we acquired Roslin Bio-Med, a private company located in
Scotland which was established by the Roslin Institute to develop nuclear
transfer technology. Our acquisition of Roslin Bio-Med and formation of a
research collaboration with the Roslin Institute have expanded the scope of our
business and operations. As a result, we may be presented with operational
issues that we have not previously faced as a company, but which generally
accompany acquisitions and research collaborations of this nature, including:
- the potential disruption of ongoing business and distraction of
management;
- unanticipated expenses related to technology and research
integration; and
- the difficulty of implementing and maintaining uniform standards,
controls, procedures and policies.
We may not be able to overcome any of these obstacles, and our failure to
do so could prevent us from achieving the perceived benefits of the acquisition
and collaboration and negatively impact our research activities and results of
operations.
In addition, our agreement with the Roslin Institute obligated us to
provide approximately $20 million in development funding. If we are unable to
fulfill this significant obligation, the Roslin Institute could terminate the
agreement and we would lose our rights to the technology.
THE ACQUISITION OF ROSLIN BIO-MED HAS SUBJECTED US TO THE UNCERTAINTY INHERENT
IN INTERNATIONAL OPERATIONS, AND WE HAVE LIMITED EXPERIENCE WITH INTERNATIONAL
OPERATIONS
To date, we have only limited experience in managing operations
internationally. Our acquisition of Roslin Bio-Med represents our first
experience in managing international operations. As a result of our
international expansion, we are now subject to the uncertainties inherent in
international operations, including:
- unexpected changes in regulatory requirements;
- compliance with international laws;
- difficulties in staffing and managing international operations
including those that arise as a result of distance, language and
cultural differences;
- currency exchange rate fluctuations;
- political instability;
- export restrictions; and
- potentially adverse tax consequences.
One or more of these factors could materially harm our future
international operations, the success of our acquisition of Roslin Bio-Med and,
consequently, our business, operating results, and financial condition.
Similarly, our collaborations with international partners such as the Roslin
Institute, Pharmacia, Kyowa Hakko and Roche Diagnostics could also subject us to
the above described international uncertainties.
THE LOSS OF KEY PERSONNEL COULD SLOW OUR ABILITY TO CONDUCT RESEARCH AND DEVELOP
PRODUCTS
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
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<PAGE> 21
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.
We also rely on consultants and advisors, including the members of our
Scientific Advisory Board, who assist us in formulating our research and
development strategy. 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 would materially
harm our business.
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 products is alleged to have injured subjects or patients. This risk
exists for products tested in human clinical trials as well as products that are
sold commercially. We currently have no clinical trial liability insurance and
we may not be able to obtain and 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 which could have a material adverse
effect on us.
BECAUSE WE OR OUR COLLABORATORS MUST OBTAIN REGULATORY APPROVAL TO MARKET OUR
PRODUCTS IN THE UNITED STATES AND FOREIGN JURISDICTIONS, 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. The preclinical testing and clinical trials of the products that we
develop ourselves or that our collaborators develop are subject to intense
government regulation and may prevent us from creating commercially viable
products from our discoveries. In addition, 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:
- manufacturing;
- advertising and promoting;
- selling and marketing;
- labeling; and
- distributing.
We may not obtain regulatory approval for the products we develop and our
collaborators may not obtain regulatory approval for the products they develop.
Regulatory approval may also entail limitations on the indicated uses of a
proposed product. Because certain of our product candidates involve the
application of new technologies and may be based upon a new therapeutic
approach, such products may be subject to substantial additional review by
various government regulatory authorities, and, as a result, we may obtain
regulatory approvals for such products more slowly than for products based upon
more conventional technologies. 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.
The regulatory process, particularly for biopharmaceutical products like
ours, is uncertain, can take many years and requires the expenditure of
substantial resources. Any product that we or our collaborative partners develop
must receive all relevant regulatory agency approvals or clearances, if any,
before it may be marketed in the United States or other countries. Generally,
biological drugs and non-biological drugs are regulated more rigorously than
medical devices. In particular, human pharmaceutical therapeutic products,
including a telomerase inhibitor, are
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<PAGE> 22
subject to rigorous preclinical and clinical testing and other requirements by
the Food and Drug Administration in the United States and similar health
authorities in foreign countries. The regulatory process, which includes
extensive preclinical testing and clinical trials of each product in order to
establish its safety and efficacy, is uncertain, can take many years and
requires the expenditure of substantial resources.
Data obtained from preclinical and clinical activities is susceptible to
varying interpretations that could delay, limit or prevent regulatory agency
approvals or clearances. In addition, delays or rejections may be encountered
based upon changes in regulatory agency policy during the period of product
development and/or the period of review of any application for regulatory agency
approval or clearance for a product. Delays in obtaining regulatory agency
approvals or clearances could:
- significantly harm the marketing of any products that we or our
collaborators develop;
- impose costly procedures upon our activities or the activities of
our collaborators;
- diminish any competitive advantages that we or our collaborative
partners may attain; or
- adversely affect our ability to receive royalties and generate
revenues and profits.
Even if we commit the time and resources, both economic and otherwise,
that are necessary, the required regulatory agency approvals or clearances may
not be obtained for any products developed by or in collaboration with us. If
regulatory agency approval or clearance for a new product is obtained, this
approval or clearance may entail limitations on the indicated uses for which it
may be marketed that could limit the potential commercial use of the product.
Furthermore, 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. Failure to comply with
regulatory requirements can result in severe civil and criminal penalties,
including but not limited to:
- recall or seizure of products;
- injunction against manufacture, distribution, sales and marketing;
and
- criminal prosecution.
The imposition of any of these penalties could significantly impair our
business, financial condition and results of operations.
TO BE SUCCESSFUL, OUR PRODUCTS MUST BE ACCEPTED BY THE HEALTH CARE COMMUNITY,
WHICH CAN BE VERY SLOW TO ADOPT OR UNRECEPTIVE TO NEW TECHNOLOGIES AND PRODUCTS
Our products and those developed by our collaborative partners, if
approved for marketing, may not achieve market acceptance since physicians,
patients or the medical community in general may decide to not accept and
utilize these products. The products that we are attempting to develop may
represent substantial departures from established treatment methods and will
compete with a number of traditional drugs and therapies manufactured and
marketed by major pharmaceutical companies. The degree of market acceptance of
any of our developed products will depend on a number of factors, including:
- our establishment and demonstration to the medical community of the
clinical efficacy and safety of our product candidates;
- our ability to create products that are superior to alternatives
currently on the market;
- our ability to establish in the medical community the potential
advantage of our treatments over alternative treatment methods; and
- reimbursement policies of government and third-party payors.
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<PAGE> 23
If the health care community does not accept our products for any of the
foregoing reasons, or for any other reason, our business would be materially
harmed.
THE REIMBURSEMENT STATUS OF NEWLY-APPROVED HEALTH CARE PRODUCTS IS UNCERTAIN AND
FAILURE TO OBTAIN REIMBURSEMENT APPROVAL COULD SEVERELY LIMIT THE USE OF OUR
PRODUCTS
Significant uncertainty exists as to the reimbursement status of newly
approved health care products, including pharmaceuticals. 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 domestic and foreign markets, sales of our products, if any, will
depend in part on the availability of reimbursement from third-party payors,
examples of which include:
- government health administration authorities;
- private health insurers;
- health maintenance organizations; and
- pharmacy benefit management companies.
Both federal and state governments in the United States and foreign
governments continue to propose and pass legislation designed to contain or
reduce the cost of health care through various means. Legislation and
regulations affecting the pricing of pharmaceuticals and other medical products
may change or 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 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 and treatments 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.
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 of, or to adequately restrict the discharge of, 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, and any 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 and
substantial fines or penalties if we violate any of these laws or regulations.
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<PAGE> 24
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 some reasons which may be
unrelated to their businesses or results of operations such as media coverage,
legislation and regulatory measures and the activities of various protest 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 your return on your
investment.
Historically, our stock price has been extremely volatile. Between January
1998 and March 31, 2000, our stock has traded as high as $75.88 per share and as
low as $3.50 per share. The significant market price fluctuations of our common
stock are due to a variety of factors, including:
- depth of the market for the common stock;
- the experimental nature of our prospective products;
- fluctuations in our operating results;
- market conditions relating to the biopharmaceutical and
pharmaceutical industries;
- any announcements of technological innovations, new commercial
products or clinical progress or lack thereof by us, our
collaborative partners or our competitors; or
- announcements concerning regulatory developments, developments with
respect to proprietary rights and our collaborations.
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 then 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, INCLUDING SHARES THAT WILL BECOME
ELIGIBLE FOR SALE IN THE NEAR FUTURE, MAY ADVERSELY AFFECT THE MARKET PRICE FOR
OUR COMMON STOCK
Sales of substantial number of shares of our common stock in the public
market could significantly and negatively affect the market price for our common
stock. As of March 31, 2000, we had approximately 21,422,490 shares of common
stock outstanding. Of these shares, approximately 8,017,367 shares were issued
(including shares issuable upon conversion or exercise of convertible notes or
warrants) since December 1998 pursuant to private placements. Of these shares,
approximately 7,336,512 shares have been registered pursuant to shelf
registration statements and therefore may be resold (if not sold prior to the
date hereof) in the public market and approximately 680,855 of the remaining
shares may be resold pursuant to Rule 144 into the public markets as early as
March 9, 2002 upon the expiration of a lockup agreement with us.
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 THE HOLDERS OF 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 the stockholders. As of the date of this Form
10-Q, the Board of Directors still has authority to designate and issue up to
3,000,000 shares of preferred stock. The rights of the holders of common stock
will be subject to, and may be adversely affected by, the rights of the holders
of any preferred stock that may be issued in the future. 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. The issuance of preferred stock may also result
in the loss of voting control by others.
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<PAGE> 25
PROVISIONS IN OUR 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
In addition to 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:
- prevent stockholders from taking actions by written consent;
- 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
- 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.
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk related to changes in interest rates and
foreign currency exchange rates. We do not use derivative financial instruments
for speculative or trading purposes.
Interest Rate Sensitivity. The fair value of our available for sale
securities at March 31, 2000 was $74.7 million. These investments include $49.3
million of cash and cash equivalents which are due in less than 90 days, $2.5
million of short-term investments which are due in less than one year and $22.9
million in long-term investments which are due in one to two years. Our
investment policy is to manage our marketable securities portfolio to preserve
principal and liquidity while maximizing the return on the investment portfolio
through the full investment of available funds. We diversify the marketable
securities portfolio by investing in multiple types of investment grade
securities. We primarily invest our marketable securities portfolio in
short-term securities with at least an investment grade rating to minimize
interest rate and credit risk as well as to provide for an immediate source of
funds. Although changes in interest rates may affect the fair value of the
marketable securities portfolio and cause unrealized gains or losses, such gains
or losses would not be realized unless the investments are sold. Due to the
nature of our investments, which are primarily corporate and municipal notes and
money market funds, we have concluded that there is no material market risk
exposure.
Foreign Currency Exchange Risk. Because we translate foreign currencies
into United States dollars for reporting purposes, currency fluctuations can
have an impact, though generally immaterial, on our results. We believe that our
exposure to currency exchange fluctuation risk is insignificant primarily
because our international subsidiary satisfies its financial obligations almost
exclusively in its local currencies. For the three moths ended March 31, 2000,
there was an immaterial currency exchange impact from our intercompany
transactions. However, the financial obligations of Geron to the Roslin
Institute over the next five years are stated in British pounds sterling. This
obligation may become more expensive for us if the United States dollar becomes
weaker against the British pounds sterling. As of March 31, 2000, we did not
engage in foreign currency hedging activities.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In March 2000, we sold a total of 380,855 shares of our common stock and
300,000 warrants to purchase our common stock to a single investor for $9
million. We structured the sale of securities in two parts. We priced the first
$6.4 million of common stock at $50.32 per share, and set the exercise price for
200,000 warrants at $67.09 per share. We priced the remaining $2.6 million of
common stock at $10.25 per share, and set the exercise price for the remaining
100,000 warrants at $12.50 per share. The common stock and the stock underlying
the warrants are not registered for resale and are subject to a two-year
prohibition on sale by agreement. As of March 31, 2000, all of the warrants
remained outstanding. This transaction was exempt from registration under the
Securities Act of 1933, as amended, under Section 4(2) thereof, as a transaction
not involving a public offering.
During the first quarter of 2000, institutional investors exercised series
A warrants to purchase 625,000 shares of Geron common stock, series B warrants
to purchase 625,000 shares of Geron common stock and series C warrants to
purchase 1,100,000 shares of Geron common stock. In total, we received $28.8
million in proceeds from the exercise of these warrants. These transactions
were exempt from registration under the Securities Act of 1933, as amended,
under Section 4(2) thereof, as a transaction not involving a public offering.
In the first quarter of 2000, an institutional investor converted an
aggregate principal amount of $6.25 million plus accrued interest of series C
convertible debentures into 615,069 shares of Geron common stock. In addition,
an institutional investor converted an aggregate principal amount of $3.0
million of series B convertible debentures into 300,000 shares of Geron common
stock of $0.00 per share. As of March 31, 2000, an aggregate principal amount of
$6.25 million of series C convertible debentures and no series B convertible
debentures remained outstanding. This issuance was exempt from registration
under the Securities Act of 1933 pursuant to Section 3(a)(9) thereof as an
exchange with an existing security holder.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<S> <C>
4.7* Securities Purchase Agreement
4.8* Warrant - EMP100
4.9* Warrant - EMP101
27.1 Financial Data Schedule (restated)
</TABLE>
(b) REPORTS ON FORM 8-K
(i) The Company filed a report on Form 8-K dated March 14, 2000
reporting the sale of common stock to a private investor.
* Incorporated by reference to identically numbered exhibits filed with the
Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GERON CORPORATION
By: /s/ DAVID L. GREENWOOD
----------------------------------
David L. Greenwood
Senior Vice President and
Chief Financial Officer
(Duly Authorized Signatory)
Date: August 14, 2000
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<PAGE> 28
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
4.7* Securities Purchase Agreement
4.8* Warrant - EMP100
4.9* Warrant - EMP101
27.1 Financial Data Schedule (restated)
</TABLE>
* Incorporated by reference to identically numbered exhibits filed with the
Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
28
