Geron Corp. is proposing an initial public offering of 2.5 millionshares to further its research on drugs and diagnostics for cancer andother age-related disorders.

The Menlo Park, Calif., company said late Thursday it expected theshares to be priced at $11 to $13 each. Geron will gross $30 millionif the shares sell at the midrange price of $12.

J.P. Morgan & Co., of New York, is the lead underwriter. Co-managers are Montgomery Securities, of San Francisco, and SalomonBrothers Inc., of New York.

Geron is working on the common molecular mechanisms underlyingage-related diseases. To that end the company is focused ontelomeres, the structures at the end of chromosomes that appear to actas a molecular "clock" of cellular aging, and telomerase, an enzymethat seems to stop the clock and lead to cellular immortality.

Geron said it demonstrated both in vivo and in vitro that telomeresshorten throughout a normal cell's replicative life span. When theyreach a certain short length, cells stop dividing and becomesenescent, which leads to an imbalance in the production of proteinsand other cell products.

Cancer cells, however, escape senescence and maintain their abilityto divide, Geron said in its prospectus. The germ line enzyme calledtelomerase is abnormally reactivated in these cancer cells to repairtheir telomeres with each cell division, thereby conferring cellularimmortality. Geron said it has shown telomerase to be present in themore than 20 types of cancer it has studied.

Geron said it believes telomerase regulation inhibition has thepotential to be a universal and highly specific cancer therapy. It hasidentified several series of small-molecule compounds thatselectively inhibit telomerase.

In one of its programs Geron demonstrated telomerase inhibition ledto renewed telomere shortening in cancer cells, and eventual cancercell death. The company currently is optimizing compounds astelomerase inhibitors before selecting a lead for preclinicaldevelopment.

In that telomerase inhibition and detection program, Geronestablished in May 1995 a collaboration with Kyowa Hakko KogyoCo. Ltd., of Japan, for development of cancer drugs. Kogyo is payingGeron up to $30 million for manufacturing and marketing rights inAsia.

Separate from the initial public offering Kogyo will invest $2.5million in Geron at the offering price.

Geron has five smaller collaborations in place that involve telomeraseas a cancer marker. Those deals involve use for research anddiagnostic applications.

A second Geron program is in cell senescence modulation. One partof the program focuses on slowing telomerase loss, thereby extendingthe period of normal cell replication and delaying the onset of cellsenescence. That research initially is directed at T cell therapy andbone marrow applications.

The second part of the modulation program focuses on applyinggenomics techniques to target and modulate destructive geneticchanges in these older cells. The first focus in that program is skinaging and atherosclerosis.

In its third program Geron intends to generate a broad array of celltypes from primordial stem (PS) cells for cellular transplantation.Those cells are unique in that they are both immortal and capable ofdifferentiation into all types of cells and tissues. The goal of the earlystage program is to differentiate PS cells into cardiomyocytes fortreating congestive heart failure and into neurons for treatingParkinson's disease.

On March 31, 1996, Geron reported $13.9 million in cash, with a1995 net loss of $8.2 million. After the offering Geron will haveabout 10.2 million shares outstanding, which doesn't take intoaccount about 1.5 million shares that would be issued if certainoptions and warrants are exercised. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.