BioTime, Inc. Issues Open Letter to Shareholders of Geron Corporation
ALAMEDA, Calif., Oct 18, 2012 (BUSINESS WIRE) -- BioTime, Inc. (nyse mkt:BTX)
today issued the following letter to the shareholders of Geron Corporation (GERN)
regarding Geron's stem cell assets:
October 18, 2012
AN OPEN LETTER TO GERON SHAREHOLDERS
Dear Geron Shareholders:
As you know, during November 2011, Geron Corporation (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, PhDThomas Okarma, PhD, MD
Chief Executive OfficerChief Executive Officer
BioTime, Inc.BioTime Acquisition Corp.
Geron FounderFormer Geron CEO
Former Geron CEO(1999-2011)
(1990-1992)
Appendix I: Details of Our Proposal
The principal features of the Stem Cell Transaction and the Rights Offer are as
follows:
The Stem Cell Transaction
-- As a Geron shareholder, you would receive one BioTime Warrant and one share of
BAC Series A common stock for each 20 shares of Geron common stock you own. In
total, Geron shareholders would receive 21.4% of the BAC capital stock
outstanding at the consummation of the Stem Cell Transaction. BioTime would own
the remaining outstanding shares of capital stock of BAC. BioTime would also hold
BAC warrants that, if exercised, would increase BioTime's ownership interest by
approximately 2%.
-- Geron shareholders would receive BAC Series A common stock and BioTime would
own BAC Series B common stock. The BAC Series A common stock that you and other
Geron shareholders would acquire, and the BAC Series B common stock that will be
owned by BioTime, will be identical in almost all respects, except that having a
separate Series A common stock held by Geron shareholders will enable BAC to
distribute the BioTime Warrants, and to make the Rights Offer described below,
exclusively to the Series A shareholders.
-- BAC would seek to have the BAC Series A common stock received by Geron
shareholders listed for trading on a national securities exchange or on the OTC
Bulletin Board market if exchange listing is not feasible.
-- Following the acquisition of the Geron stem cell assets, BAC would distribute
the BioTime Warrants to the Geron shareholders as holders of BAC Series A common
stock. The distribution would entitle you and the other BAC Series A shareholders
to receive one BioTime Warrant for each BAC Series A share received in the Stem
Cell Transaction.
-- The BioTime Warrants and underlying BioTime common shares would be registered
under the Securities Act of 1933, as amended, and BioTime would seek to have the
BioTime Warrants listed for trading on the NYSE MKT where its common shares are
traded, or on the OTC Bulletin Board market if exchange listing is not feasible.
The Rights Offer
-- Under our proposal, after the Stem Cell Transaction, BAC, as a new public
company, would conduct a Rights Offer to the holders of the Series A common stock
to raise additional capital.
-- We presently contemplate that the Rights Offer would seek to raise
approximately $39 million and would provide the Geron shareholders with the
opportunity to increase their ownership interest in BAC to approximately 45% in
the aggregate (without taking into account any BAC warrants) if they continue to
hold their BAC Series A common stock and choose to exercise all of the
subscription rights they receive in the Rights Offer.
-- In addition to acquiring BAC Series A common stock, BAC shareholders who
exercise their subscription rights in the Rights Offer would also receive
warrants to purchase additional BAC Series A common stock, which if exercised
would increase Geron shareholders' ownership in BAC. We would propose to have BAC
list those warrants on a national securities exchange or to arrange for the
warrants to be traded on the OTC Bulletin Board so that the BAC shareholders
could also sell their warrants at prevailing market prices.
-- BAC would also seek to have the subscription rights distributed in the Rights
Offer listed for trading on a national securities exchange or over-the-counter
market so that shareholders who do not wish to exercise their subscription rights
could sell them at prevailing market prices.
-- If you receive subscription rights in the Rights Offer you would not be
obligated to exercise those subscription rights, but instead you may choose to
exercise some or all of your subscription rights in order to purchase additional
BAC Series A shares and warrants, or you may sell some or all of your
subscription rights, or you may simply choose to allow your subscription rights
to expire unexercised.
Other Requirements
In addition to Geron Board approval noted above, the approval of Geron
shareholders and BioTime shareholders may be required, depending on the structure
of the Stem Cell Transaction. Registration of the BAC shares under the Securities
Act of 1933, as amended (the "Securities Act"), will also be required. The Stem
Cell Transaction would be subject to a variety of conditions yet to be
negotiated. Further, the terms and conditions of the Rights Offer have not yet
been determined and the proposed Rights Offer will not be conducted until a
registration statement is filed under the Securities Act and becomes effective.
About BioTime, Inc.
BioTime, headquartered in Alameda, California, is a biotechnology company focused
on regenerative medicine and blood plasma volume expanders. Its broad platform of
stem cell technologies is enhanced through subsidiaries focused on specific
fields of application. BioTime develops and markets research products in the
fields of stem cells and regenerative medicine, including a wide array of
proprietary ACTCellerate(TM) cell lines, HyStem(R) hydrogels, culture media, and
differentiation kits. BioTime is developing Renevia(TM) (formerly known as
HyStem(R)-Rx), a biocompatible, implantable hyaluronan and collagen-based matrix
for cell delivery in human clinical applications. BioTime's therapeutic product
development strategy is pursued through subsidiaries that focus on specific organ
systems and related diseases for which there is a high unmet medical need.
BioTime's majority owned subsidiary Cell Cure Neurosciences Ltd. is developing
therapeutic products derived from stem cells for the treatment of retinal and
neural degenerative diseases. BioTime's subsidiary OrthoCyte Corporation is
developing therapeutic applications of stem cells to treat orthopedic diseases
and injuries. Another subsidiary, OncoCyte Corporation, focuses on the diagnostic
and therapeutic applications of stem cell technology in cancer, including the
diagnostic product PanC-Dx(TM) currently being developed for the detection of
cancer in blood samples. ReCyte Therapeutics, Inc. is developing applications of
BioTime's proprietary induced pluripotent stem cell technology to reverse the
developmental aging of human cells to treat cardiovascular and blood cell
diseases. BioTime's subsidiary LifeMap Sciences, Inc. markets GeneCards(R), the
leading human gene database, and is developing an integrated database suite to
complement GeneCards(R) that will also include the LifeMap(TM) database of
embryonic development, stem cell research and regenerative medicine, and
MalaCards, the human disease database. LifeMap will also market BioTime research
products. BioTime's lead product, Hextend(R), is a blood plasma volume expander
manufactured and distributed in the U.S. by Hospira, Inc. and in South Korea by
CJ CheilJedang Corporation under exclusive licensing agreements. Additional
information about BioTime can be found on the web at biotimeinc.com.
About BioTime Acquisition Corporation
BioTime Acquisition Corporation is a newly formed wholly owned subsidiary of
BioTime, Inc., through which BioTime plans to pursue opportunities and acquire
assets and businesses in the fields of stem cells and regenerative medicine.
This communication is not an offer to sell any securities or a solicitation of
any vote or approval and BioTime and BAC are not offering to sell, or soliciting
an offer to buy, any securities in any state where the offer or sale is not
permitted.
This communication is for informational purposes only and does not constitute an
offer to sell any shares of BAC common stock or warrants or a solicitation of any
vote or approval, nor is it a substitute for a prospectus/proxy statement that
may be included in a registration statement that may be filed with the Securities
and Exchange Commission (the "SEC") under the Securities Act with respect to the
proposed Stem Cell Transaction, or for a prospectus that may be included in a
registration statement that may be filed under the Securities Act with respect to
a Rights Offer. INVESTORS AND SECURITY HOLDERS OF GERON ARE URGED TO READ ANY
PROSPECTUS/PROXY STATEMENT FOR THE STEM CELL TRANSACTION AND ANY PROSPECTUS FOR
THE RIGHTS OFFER, AND ALL OTHER RELEVANT DOCUMENTS, THAT BIOTIME, BAC AND/OR
GERON MAY FILE WITH THE SEC, IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. All documents referred to above, if filed by
BioTime or BAC, will be available free of charge at the SEC's website
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