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BioTime, Inc. Issues Open Letter To Shareholders Of Geron Corporation

BioTime, Inc. (NYSE MKT: BTX) today issued the following letter to the shareholders of Geron Corporation (Nasdaq: GERN) regarding Geron’s stem cell assets:

October 18, 2012


Dear Geron Shareholders:

As you know, during November 2011, Geron Corporation (Nasdaq: GERN) announced that it was discontinuing its stem cell research and development programs and its clinical trials of OPC-1, a groundbreaking product to treat spinal cord injuries manufactured from human embryonic stem cells. Nearly a year has now passed, and Geron has not announced any transaction that would provide value to either Geron or its shareholders from those stem cell assets.

BioTime, Inc. (NYSE MKT: BTX) is a publicly traded company engaged in research and development of innovative new products in the field of regenerative medicine utilizing stem cells and related technology. We are prepared to propose a transaction between a recently formed, wholly owned subsidiary, BioTime Acquisition Corporation (BAC), and Geron for the purpose of enabling BAC to put the now dormant Geron stem cell assets back on track to speed the development and commercialization of innovative new products to treat degenerative diseases.

Summary of Our Proposal

Our proposal includes two transactions, one which we call the “ Stem Cell Transaction” and one that we call the “ Rights Offer” which are described in more detail, along with other important information, in Appendix I: Details of Our Proposal attached to this letter. Through these transactions, Geron shareholders could own up to 45% of a new publicly traded company that will own the Geron stem cell assets, $40 million of BioTime stock, certain BioTime stem cell assets, and shares of certain BioTime stem cell subsidiaries. Geron shareholders would also receive BioTime stock-purchase warrants presently valued at approximately $13 million. Geron would retain its cancer therapy business, including Imetelstat and GRN1005, and its cash and short-term liquid investments and Geron shareholders would continue to own 100% of the Geron cancer therapy business through their ownership of Geron stock.

Through the Stem Cell Transaction, Geron would transfer its stem cell assets to BAC, in exchange for which you along with the other Geron shareholders would receive shares of BAC common stock representing approximately 21.4% of the outstanding BAC capital stock. BioTime would contribute to BAC the following assets in exchange for the balance of outstanding BAC capital stock:
  • $40 million in BioTime common shares;
  • Warrants to purchase BioTime common shares (“ BioTime Warrants”);
  • Rights to certain stem cell assets of BioTime, and shares of two BioTime subsidiaries engaged in the development of therapeutic products from stem cells.

Through the “ Rights Offer,” BAC would seek to raise additional capital by offering you and other Geron shareholders the opportunity to increase your collective ownership interests in BAC to 45% by purchasing additional BAC shares, if you choose to do so. In addition to acquiring BAC common stock in the Rights Offer, if you exercise your subscription rights you would also receive warrants to purchase additional BAC common stock, which if exercised would increase your ownership in BAC. Those shareholders deciding not to purchase additional BAC shares in the Rights Offering would have the opportunity to sell their rights at prevailing market prices.

What You Can Do Now

BioTime and BAC cannot complete the Stem Cell Transaction as proposed without the approval of Geron’s Board of Directors. If you want the Geron Board of Directors to pursue our proposal, we suggest that you contact the Geron Board and urge them to work with BioTime and BAC management to negotiate a definitive agreement for the Stem Cell Transaction. According to Geron’s latest proxy statement, Geron shareholders wishing to communicate with the Board of Directors, or with a specific Board member, may do so by writing to the Board, or to the particular Board member, and delivering the communication in person or mailing it to: Board of Directors, c/o Stephen Rosenfield, Corporate Secretary, Geron Corporation, currently located at 149 Commonwealth Drive, Menlo Park, CA 94025. Geron’s proxy statement represents that all mail addressed in this manner will be delivered to the Chair or Chairs of the Committees with responsibilities touching most closely on the matters addressed in the communication.

Very Truly Yours,
Michael D. West, PhD         Thomas Okarma, PhD, MD
Chief Executive Officer Chief Executive Officer
BioTime, Inc. BioTime Acquisition Corp.
Geron Founder Former Geron CEO
Former Geron CEO (1999-2011)

Appendix I: Details of Our Proposal

The principal features of the Stem Cell Transaction and the Rights Offer are as follows:

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