Geron Running Again

Geron's (GERN Quote) vital signs keep getting stronger.

The biotechnology company, which enjoyed a muscular rally following coverage by TheStreet.com earlier this week, extended its gains after reporting a new medical breakthrough on Thursday. In a preview of an article due out by Stem Cells in August, the company unveiled fresh progress on a stem cell-related treatment for diabetes.

Specifically, Geron said that it has differentiated embryonic stem cells into clusters that "secrete insulin in response to elevated glucose levels." The advance could offer hope for huge crowds of people who suffer from type 1 diabetes.

Geron shareholders sure feel optimistic. They saw the company's stock -- which was stuck around $7 just two months ago -- rocket 9.6% to $9.03 on the news.

Robert Lawton, managing partner of New York's Catoosa Fund, feels that Geron shareholders have finally started seeing the type of payoff that they deserve.

"If Geron had published a press release like this a month ago -- or even a week ago -- it wouldn't have budged the stock," says Lawton, whose firm has a long position in the company itself. "The stock could have even ended up red for the day.

"But it's on the radar screen now."

Lawton feels that Geron's latest run has been fueled by a "coalescence" of favorable events, starting with TheStreet.com's big story on Monday. He says that new investors -- including technical experts, momentum players and "lazy brokers looking for new ideas" -- seem to be piling into the stock quite heavily this week.

Geron's stock has broken through several technical averages, on extremely heavy volume, during the recent rally.

"There really hasn't been a lot of big institutional interest in the stock until this week," Lawton says. "But you've seen the market: It's looking for something to chase. [And] this is a very sexy story."