By Kim Coghill

Washington Editor

Geron Corp. said it has regained all rights to its telomerase inhibitors from Pharmacia Corp. and intends to form an oncology division in order to develop therapeutic and diagnostic products.

"This is good news for us because it returns all of the rights back to us and the telomerase inhibitor opportunity is really enormous," said Tom Okarma, president and CEO of Menlo Park, Calif.-based Geron. "We certainly appreciate the support and help we got from Pharmacia; they have been good partners. But all of the compounds that are exciting come from the Geron compound library and this puts the control completely back in our hands."

Okarma would not discuss financial details of the split except to say, "We've got $95 million-plus in the bank so we are in good shape to carry the ball forward."

"It was a joint decision [to discontinue the alliance] based upon a mutual assessment of where both companies are trying to go. Obviously, Pharmacia merged with Monsanto Co. and so they are a whole new company and have a number of changed priorities internally. For us, all of the lead compounds have come from our own library. Pharmacia was unable to generate from their own libraries anything that was terribly exciting."

When the companies signed the agreement in 1997, (then with Pharmacia & Upjohn) the collaboration was said to be worth up to $58 million. Pharmacia & Upjohn made an initial $2 million equity investment in Geron. The agreement provided for an equity investment of $10 million in Geron, research funding and milestone payments, which were to be partly recoverable against future royalties. (See BioWorld Today, Jan. 2, 1997, and March 25, 1997.)

Geron's stock (NASDAQ:GERN) closed Thursday at $18.437, down 68.7 cents.

Okarma said Geron likely will not seek another partner. Instead, the company has started recruiting physicians, regulatory affairs personnel and general business employees for its new oncology division. "The technology has progressed to the stage where this is warranted," he said. "We are progressing well and expect to have a development candidate or two within the next 12 to 18 months."

Geron has developed a series of proprietary oligomers that target specific RNA sequences in the template region of telomerase. The lead compounds in this series are potent and specific telomerase inhibitors that induce cell crisis in tumor cells and effectively kill human malignant glioma (brain cancer) cells in a mouse xenograft model.

Geron and collaborators cloned the human telomerase gene in 1997. The company validated the use of the telomerase promoter (the regulatory region of the telomerase gene) to control the activity of gene-based anticancer therapies.

The company also has a collaboration with Merix Bioscience, of Research Triangle, N.C., and Duke University to develop a therapeutic cancer vaccine, scheduled to enter human clinical trials this year. Geron also has developed 12 research kits used to study telomere and telomerase biology cancer and other diseases.