Spinal injury drug developed cysts in animals

Published: August 27, 2009  |  Source: reuters.com
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BANGALORE (Reuters) – Geron Corp said animals injected with its experimental cell therapy for subacute spinal cord injury developed microscopic cysts in the injury site, but its shares rose as the company reported none of the animals developed teratomas, a kind of tumor.

Shares of the stem cell research company rose 5 percent to $7.28 in early morning trade.

“I believe that since the worst case scenario (teratomas) did not occur, investors are relieved,” Merriman Curhan Ford analyst Joseph Pantginis said.

As embryonic stem cells are living cells that divide, there is a fear that they can grow uncontrollably and cause tumor if they lose a particular molecular checkpoint, he said. The company said the cysts were non-proliferative, confined to the injury site, and had no adverse effects on the animals.

Geron said on Thursday that another just completed animal study showed a higher frequency of cysts, although their characteristics were similar to the cysts seen in previous studies.

However, a manufactured lot of the drug GRNOPC1 that was assessed using new markers and assays showed no cysts in a recently concluded study in rats, the company said in a statement.

Geron said it submitted these data to the U.S. Food and Drug Administration and is in discussions with the agency to answer its questions and proceed with the clinical trial.

Last week Geron’s investigational new drug application was placed on clinical hold by U.S. health regulators to review new nonclinical animal study data submitted by the company.

“The potential timing of a release of the clinical hold is a complete black box and cannot be projected,” said Pantginis, who had already removed the spinal cord injury treatment from his valuation model.

“Geron is especially vulnerable because it is at the forefront, by far, of the embryonic stem cell space, and being on the cutting edge means the company must also be the first to hit the hurdles and learn as they go,” he said.

(Editing by Ratul Ray Chaudhuri)
By Anand Basu