National Editor

Geron Corp. expanded its long-standing relationship with Merix Bioscience Inc. by entering a deal that lets the former use the latter's platform technology in cancer vaccines that have telomerase as an antigen.

As part of the agreement, Geron issued 5 million shares of stock to Merix. The stock is worth about $44.8 million, based on Tuesday's closing price of $8.96.

Geron's shares (NASDAQ:GERN) closed Wednesday at $8.77, down 19 cents.

"We've been working with these guys for a long time," said Thomas Okarma, president and CEO of Menlo Park, Calif.-based Geron.

An ongoing Phase I/II prostate cancer trial at Duke University Medical Center in Durham, N.C., where Merix also is located, combines Geron's telomerase technology with privately held Merix's approach, which deploys dendritic cell biology.

Under the terms, Geron gets coexclusive rights to use the Merix platform in cancer vaccines using other defined antigens. Merix keeps coexclusive rights to use its platform with defined antigens other than telomerase, as well as exclusive rights to use it with total-tumor RNA and other, uncharacterized antigens.

"This is a fully paid-up license," Okarma told BioWorld Today. "We wanted to get what we needed and we wanted to make it clean. We acquired the license rights forever."

There's also a three-year, cross-licensing aspect to the deal with regard to new technology in the field, so the companies would share developments as they occur.

"It's vague in the press release because there's a lot," he said. "We're practicing two sets of Merix-generated technologies. One is how to load the dendritic cells with telomerase; the other is how to activate and mature the loaded dendritic cells."

Refining the dosage is one area of focus, Okarma said - specifically, increasing the duration of vaccinations. In the current trial, patients get either three weekly injections in the low-dose group or six weekly injections in the high-dose group.

"The next step would be to boost the high-dose group to every couple of months or so," in a bid to create memory T cells that would keep functioning, he said.

"We've shown this [approach] is not in any way limited to prostate cancer," he added.

Thanks to the arrangement, Geron can forge ahead with its telomerase-based work as in the Duke trial and apply the platform to such antigens as tumor-specific ones in combination with telomerase. The company also can use the Merix platform in combination with dendritic cells from other sources, such as human embryonic stem cells.

Geron's prostate cancer program is its most advanced, however.

"Some [patients] have been followed for 18 months, so we have a high degree of confidence - certainly in the safety," Okarma said. "A lot of people, including us, were worried about that."

The Duke study "is being written up for publication now," he said, and details will not be disclosed until later, but the results will represent "a landmark in cancer vaccination, in terms of specificity and the magnitude of the immune response we're generating in advanced cancer patients."

Okarma said the Merix deal is "the vehicle upon which to build toward our second cancer program, the telomerase inhibitor drug." Geron expects to file an investigational new drug application for that drug in the fourth quarter.

The option of using the vaccine and the inhibitor together is "obviously very attractive. It combines two different ways to attack the same target." Also under consideration are other types of cancer, but Okarma said he could not disclose any choices yet.

"That's what we're talking about now," he said. "We want to advance the ball as rapidly as we can."

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