By Lisa Seachrist

Washington Editor

In an effort to create tissue therapies that are an identical match for patients receiving the treatments, Geron Corp. purchased Roslin Bio-Med, a company formed by the Roslin Institute, whose researchers produced the sheep clone Dolly.

The stock swap deal, in which Menlo Park, Calif.-based Geron acquired the Roslin, Midlothian, Scotland-based Roslin Bio-Med for 2.1 million shares of Geron stock, will result in Roslin Bio-Med becoming a wholly owned subsidiary of Geron. In addition, for the next six years, Geron will provide research funding totaling $21 million.

At the close of the deal, Geron will control the intellectual property rights to pluripotent stem cell technology, somatic cell nuclear transfer technology and telomerase expression. Potential therapies to treat degenerative diseases such as Parkinson¿s disease, diabetes and osteoarthritis likely will utilize these technologies in combination.

Geron¿s stock (NASDAQ:GERN) closed at $12.25 Tuesday, down 12.5 cents per share. At the opening price Tuesday, the deal was valued at about $26 million in stock. Geron had about 12.5 million shares outstanding at the end of 1998.

¿[Roslin Bio-Med¿s] technology gives us the third leg, or third stake in the ground, for a regenerative medicine platform,¿ said David Greenwood, Geron¿s chief financial officer. ¿We think that the three technologies are absolutely complementary.¿

For several years, Geron has been known for the telomerase expression technology developed by the company and several academic collaborators. Telomerase is a cellular immortalizing enzyme that is present in the embryo but is turned off during some stage of normal development. Cancer cells almost uniformly have inappropriate telomerase activity. However, laboratory studies show that turning on telomerase in normal cells significantly extends their healthy replicative life spans.

The Roslin Institute gained fame in February 1997, when researchers there announced they had cloned a sheep from a fully differentiated mammary cell. Using somatic cell nuclear transfer, the researchers at the institute were able to reprogram the nucleus from an adult cell to drive the development of an entirely new animal. The announcement not only set scientific dogma on its ear, but stirred up ethical debates in governments worldwide.

In early November 1998, Geron added to the ethical dilemma by announcing that researchers at two separate academic institutions funded by the company had created human pluripotent stem cells. These cells have an unlimited ability to divide and may ultimately become any cell in the body. The cells themselves don¿t raise any ethical questions, but their origins do. One group developed them from embryos left over after a successful in vitro fertilization attempt; the other team used aborted fetuses.

Nevertheless, by combining somatic cell nuclear transfer into pluripotent stem cells with the ability to keep those cells viable with telomerase expression, Geron may be able to create tissues for implantation that the body will view as self. Otherwise, simply growing pluripotent stem cells into the needed tissues may result in patients¿ immune systems rejecting the tissues because the major histocompatibility complex is too different.

¿We want to combine these tissues principally to address the histocompatibility issues,¿ Greenwood said. ¿This seems to us the clearest pathway to achieving that.¿

Greenwood noted that the company has no interest in employing the technology for reproductive cloning of human beings, and that all activities will be overseen by an in-house ethics board. Nevertheless, the company will likely remain in the center of the debate over human cloning and human embryo research.

¿These have been two of the most debated science policy issues over the past few years,¿ said Carl Feldbaum, president of the Biotechnology Industry Organization. ¿But with the convergence of these technologies, we are looking at some of the most hopeful applications of these technologies that were voiced in the public policy debate. These promising tissue therapies now stand a much better chance of being realized.¿

However, realizing that promise is likely to take some time, according to Viren Mehta, an analyst with Mehta Partners LLP in New York.

¿The tools are well-honed at Roslin to develop whole organisms,¿ Mehta said. ¿That skill will be invaluable as Geron attempts to develop selected cells along a directed path. It holds out a strong promise, but at the end of the day that promise is well into the future.¿ n