SummerStreet held a conference call for investor clients Tuesday with an expert in stem cell research on animals.

In a report summarizing that call, SummerStreet said, "these cysts are not an uncommon complication of the stem cells and can lead to severe damage of the spinal cord as well as extensive pain. The most likely reason for the cysts is an immunological rejection of the stem cells and this could occur in humans even if Geron can avoid this in new animal models. Experts we have contacted believe that Geron prematurely moved into clinical trials and their current therapy is unlikely to work. We reiterate that the market remains too optimistic about Geron’s stem cell therapy."

SummerStreet is the firm that in March warned of potential safety issues in with Geron's stem cell treatment for spinal cord injury.

Savient Raising Money

Wednesday night, Savient Pharmaceuticals ( SVNT) announced a follow-on offering of four million shares with a 600,000-share over-allotment. No price for the offering was announced, but Savient shares closed Wednesday at $15.07.

The FDA declined to approve Savient's gout drug Krystexxa in August. Since then, the company has been working to re-submit data to regulators in order to get the drug approved.

-- Reported by Adam Feuerstein in Boston
Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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