Geron as an investment [Was: Re: Telomerase and cancer ]

Max More (
Wed, 08 Dec 1999 10:03:48 -0800

I have to agree with Robert regarding Geron as an investment:

At 05:33 AM 12/8/99 -0800, Robert wrote:

>On Tue, 7 Dec 1999, Gina Miller wrote:
> > Thank you for this information. Geron is a keeper, I checked and it's been
> > fluctuating from 14 to 20 dollars per share today. With 14 and three
> eighths
> > as the most recent. I hadn't looked today before this post, I
> appreciate the
> > info John. Nanogirl

Note that, despite an intraday surge, Geron closed below 14, and as I write this is at 13 1/16. As Robert noted, Geron has a history of this kind of price movement -- sudden big jumps on research news, followed by fast or gradual drops back to $10-11. I would love to own some Geron stock almost on principle, but haven't been able to bring myself to do it because I haven't seen any sign of products yet.

>If you look at Geron long term, it has a history of ups and downs
>(as do many biotech companies that have very long lead times for
>productization). That is a recipe for sell on the good news
>and buy-and-hold on no news.

Geron has actually been a good shorting candidate. I feel embarrassed to admit that while I have made money on Geron, it was by shorting it right after one of these kinds of announcements. Sure enough, after a couple of months I had made something like 25% profit by buying back at a lower price.

>If you have an IRA, Geron is probably a good bet to buy on market
>(or biotech) pullbacks, hold it and forget about it. If you

Again I agree with Robert. For goodness sake, don't try to buy it when it's just leapt up (unless it's on news of a genuine and promising *product*). It *may* turn out to be a fabulous long-term investment, but high risk.

>want to play it, you want to be very careful about their cash
>reserves and their ability to raise additional capital. Geron
>has done much better than I would have expected (given the rest
>of the biotech industry) in this regard. You also have to watch
>their drug development timeline. They may be years away from
>products and this is a prescription for bored investors. Finally
>there is always the potential that if they get really close to
>something big pharma might snap them up.

I'm quoting all of Robert's comments above since I think he is right on the mark and this bears paying attention to for those who would buy Geron just because they are doing wonderful research. Geron *has" recently raised enough cash ($15 million if I remember correctly) that will let them continue to operate at a loss for longer, but they are showing no sign of becoming profitable. I think there is a significant chance that a big pharma will snap them up (not necessarily bad for investors), especially now that Geron have their fingers in nuclear transfer, telomerase, and stem cells.

Sorry to join Robert in pouring some cold water on enthusiasm for investing in Geron, but these are important considerations. Believe me, I'll jump to buy Geron as soon as I am convinced of a reasonable probability of products.

In the meantime, I'm not complaining about my portfolio's 106% return so far this year. (Excuse the bragging, I just can't help myself!)

The InvestingNode list has been quiet for a long time. We could take this discussion there, and investigate other biotechs for potential, especially genomics companies that have run up lately or which may have bright futures -- Millennium Pharmaceuticals, Celera, etc. It's curious that on this list, amidst the discussion of advanced tech, we have very little discussion of profiting from our technological understanding...