Geron gains on stem-cell rat study
Safety experiment drives biotech stock, despite Bush veto.
NEW YORK (CNNMoney.com) -- Geron Corp.'s stock price rose significantly after the biotech announced that its experimental, stem-cell-based therapy for spinal cord injuries is safe in rats.
Geron's (Charts) stock price rose 4 percent following the announcement regarding the experimental treatment called GRNOPC1, which is based on human embryonic stem cells. The study is still in the early stages, and analysts believe that the biotech industry is years away from producing stem-cell-based therapies.
"You're talking about basic building-block type of applications here," said Steve Brozak, analyst for WBB Securities. "These are the most powerful tools that medicine has ever started to deal with. No matter what the Bush administration does to try and block it, they simply can't."
Geron's announcement was made hours before President Bush vetoed a bill that would loosen restrictions on federal funding for stem-cell research based on human embryos.
Researchers hope that technology based on embryonic stem cells could someday be used to heal crippling damage to the spinal cord, the brain and other parts of the body, and to reverse the course of diseases like Lou Gehrig's, Alzheimer's and Parkinson's.
But the Bush administration opposes the use of human embryos in the belief that it destroys human life.
"Human beings are not a raw material to be exploited," said Bush, when he announced the veto at a press conference on Wednesday. Bush said he opposed the bill because it would compel taxpayers "to fund the deliberate destruction of human embryos, and I'm not going to allow it."
Brozak said federal funding is the "mother's milk" of stem-cell research and a presidential veto could slow development of new therapies. But Brozak said the veto would not affect Geron stock. He said there won't be any surprises for investors, because Bush has made his intention well-known.
Brozak does not own Geron stock, but WBB has conducted investment banking for them.
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