Geron, GE Unit To Team Up In Stem-Cell Drug Development Effort

   DOW JONES NEWSWIRES 
 

Geron Corp. (GERN) and General Electric Co.'s (GE) GE Healthcare announced a global licensing deal in which the companies will team up to develop and sell drug-discovery technologies derived from human embryonic stem cells.

Shares of biotechnology concern Geron jumped 19% premarket to $7.99.

In January the company received clearance from the U.S. Food and Drug Administration for the first-ever human trial of a medical treatment derived from embryonic stem cells.

Tuesday Geron said it is giving GE Healthcare an exclusive license regarding the growth and differentiation of the cells. Scientists from both companies will work on the project, with GE Healthcare funding research and development and being responsible for any manufacturing, sales and distribution of products developed under the deal.

Financial terms were not disclosed.

"This agreement marks a further step in GE Healthcare's cell technology strategy aimed at addressing the potential of stem cell applications in the drug discovery and therapy markets," said Konstantin Fiedler, GE Healthcare's cell-technologies general manager.

The announcement comes as GE aims to both reposition its health-care group as well as to align its business units to benefit from White House priorities. About two months ago, GE unveiled a new campaign focused on how GE is improving access and quality to health care globally while lowering costs, The Wall Street Journal reported. Most of GE Healthcare's revenue now comes from diagnostic and imaging equipment. But sales are under pressure as public and private insurers try to reduce health-care costs.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; [e-mail]