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Geron (GERN) To Sell Stem Cell Assets To Biotime (BTX) Subsidiary

 January 07, 2013 08:13 AM

(By Balachander) Geron Corp. (NASDAQ: GERN) has agreed to sell its stem cell assets to a recently formed subsidiary of BioTime Inc. (NYSEAMEX: BTX).

Under the terms of the agreement, Geron will divest its intellectual property and other assets related to its discontinued human embryonic stem cell programs to BioTime Acquisition Corp. (BAC).

Geron will receive roughly 6.5 million shares of Series A Common Stock of BAC. BioTime will contribute to BAC $5 million in cash, around 8.9 million BioTime shares to be held by BAC, five-year warrants to purchase 8 million BioTime shares at an exercise price of $5.00 per share, rights to use certain human embryonic stem cell lines, and minority stakes in two of BioTime`s subsidiaries.

[Related -Geron Corporation (GERN): Understanding Your Options]

BioTime will receive roughly 21.8 million shares of Series B common stock of BAC and three-year warrants to purchase 3.15 million shares of Series B common stock of BAC at an exercise price of $5.00 per share.

In addition, BAC will pay royalties to Geron on the sale of products that are commercialized, if any, in reliance upon Geron patents acquired by BAC. 

Further, a private investor has agreed to make an equity investment of $5 million in BAC and a $5 million equity investment in BioTime.

Geron's hESC patent portfolio includes over 400 patents and patent applications that will be transferred or sublicensed to BAC. Geron obtained the first approval from the Food and Drug Administration for human clinical trials of a product manufactured from hES cells.

[Related -Futures Slip Ahead Of Earnings Season; Illumina (ILMN) Tumbles]

The deal is expected to occur no later than September 30, 2013.

GERN shares rose 3.16 percent in premarket trading to $1.58 on Monday.

BTX shares closed at $3.20 on Friday.

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