Geron Looks Born to Run

But at the same time, Barron's noted, investors have assigned Geron a handsome value already. Geron boasts a market capitalization of half-a-billion dollars, despite its faraway cures, although more than one-third of that does appear on its balance sheet as cash. Yet Geron's other assets could be worth far more. Notably, thanks to a prescient move about a decade ago, the company holds valuable -- if hotly contested -- patents that give it vast control over embryonic stem cell treatments in the U.S.

Still, Benjamin sees no reason for investors to make their move right now.

"We are maintaining our market-perform/speculative-risk rating on Geron based on the company's current valuation," wrote Benjamin, whose firm makes a market in the company's securities. "While we acknowledge that Geron is developing new modalities of treatment that address large areas of unmet clinical need -- and, therefore, may deserve to trade at a premium to its peers -- we await additional clinical data and peer-reviewed publications, as well as additional clarity regarding the timing of the company's clinical programs, before re-evaluating our rating of the company."

Meanwhile, however, some investors have decided to pounce on the stock already. During the fourth quarter, when Geron issued a big block of warrants, Rock Hill Investment Management bought so much stock in Geron that it emerged as the company's second-largest shareholder. Indeed, a Nasdaq filing indicates, Rock Hill owns far more common stock in Geron than it does in all other companies combined.

Lawton believes there is a reason why Rock Hill has placed that huge bet on Geron. He points to Dendreon (DNDN), which briefly soared despite questions about the effectiveness of its own prostate cancer vaccine, for comparison. Dendreon, hit by a devastating regulatory ruling last week, has since crashed.

But Lawton feels that Geron is, by far, the better play.

"All Dendreon did is discover a drug that might extend lives for four months," Lawton says. "If Geron has discovered a cancer-fighting agent that works -- and really prolongs life -- then, in my opinion, it's a $50 stock."

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