This is Monday after the Friday morning announcement of the first Phase I trial of an embryonic stem cell therapy. At this writing Geron's market cap ($645M) is now greater than that of Osiris Therapeutics ($619M). Osiris is in Phase III trials with Prochymal (not for spinal cord repair), a mesenchymal stem cell therapeutic application derived from adult bone marrow stem cells. Everything points to Osiris obtaining approval to market Prochymal by the end of 2010. Prochymal will in all probability be the first stem cell therapeutic application approved for market distribution.
Geron's market cap totaled $415 million at close of market on Thursday. This morning it hit $650 million before ending the day around $645M. This $230 million or so increase in market cap is the direct result of the FDA acceptance of the idea (based on the largest investigational drug application - 22,000 pages - ever submitted) that embryonic stem cells are safe enough to test in a small number of human beings (8 to 10 people is the test size).
Friday's trading saw the confluence of a benchmark, its symbolic impact, and the inherent optimism, even in these rather dire economic times, of small cap investors.The first approved clinical trial to test the safety of an embryonic stem cell therapy (therapeutic viability is a secondary test result as far as the FDA is concerned) created the benchmark. The inference taken by the investment world that the FDA impasse regarding embryonic research is over, with the attached-at-the-hip presumptive implication that stem cell therapies will now gain momentum in their design, testing and approach to the market place, provided the symbolic impact. Investor optimism was vividly illustrated, as it always is, in exceptional volume and rapid increase in stock price.
The following is what Geron says about GRNOPC1, the product being tested in the first embryonic stem cell clinical trial:
Oligodendrocytes also produce neurotrophic factors (biologicals that enhance neuronal survival and function) to support the maintenance of nerve cells. Oligodendrocytes are lost in spinal cord injury, resulting in myelin and neuronal loss that cause paralysis in many patients with spinal cord injuries (bold is ours).
The 8 to 10 person trial group will consist of parapalegics. The test will determine the safety of embryonic stem cells (or at least the lack of safety; proof of complete safety will require more testing over time and much larger trials). At the same time, Geron will be measuring increased use of, or increased response of any kind, in the group's lower body functions.
The hope is to enroll one parapalegic per month in the trials, in other words one person per month who has very recently lost the use of the lower body through injury. Geron wants study participants to be enrolled and available for treatment within fourteen days of being injured.
The company believes there should be no adverse effect of the new cells because oligodendrocyte progenitor cells are not recognized by the human immune system. Therefore the implant of non-autologous cells should not result in an immune response.
As participants are enrolled and treatment begins, Geron has said it will release partial trial results. If there are no apparent safety issues and some movement in the lower limbs and/or some control over bladder and/or bowel function is realized, Geron will attempt to get the FDA to expand the study. Participants will be observed in the study for one year following treatment.