01/21 11:46A (DJ) +DJ Geron Up 25% On 'Irrational Exuberance'-Analyst >GERN
NEW YORK (Dow Jones)--A little "irrational exuberance" never hurt a stock.
But in the case of Geron Corp. (GERN), it's actually deserved, an analyst
said.
The stock set a 12-month high Friday after a week of activity that saw the
Menlo Park, Calif., company extend a research pact with Pharmacia & Upjohn
Inc. (PNU), gain two U.K. patents covering cloning technology and earn a
Notice of Allowance for a U.S. patent application for that technology.
The company is certainly "deserving of attention," given its "potential for
more than just blockbuster science," said Vanguard Capital analyst Steve
Brozak. But "we're watching some irrational exuberance - to use Alan
Greenspan's words - in the biotechnology field."
According to Brozak, portfolio managers are loading up on biotechs that
haven't yet appreciated because they don't want to be left behind the way they
were with the Internet craze.
"Have they gone out there and done their homework?" Brozak asked. "Probably
not."
Geron earlier rose as high as 33 3/8, past the previous 52-week high of 24
9/16 set Thursday, when the stock closed up 17.3%. It recently traded at 29 1/16, up 4 1/2, or 18.3%, on volume of 2.6 million shares, compared with a
daily average of 610,300.
Geron Chief Financial Officer David Greenwood declined to comment on the
stock activity, but said the notice of allowance could "certainly be a
contributing factor."
The notice of allowance gives validity to research by allowing a company to
make specific claims based on that research, Greenwood said. Next comes
issuance of a patent, but Greenwood said he didn't know when the U.S. patent
on the cloning technology might be issued.
"The timing is soon after, to a number of months," he said.
Regardless of when the patent comes through, Geron "remains years away from
any kind of meaningful revenues" in therapeutics, said Vanguard Capital
analyst Brozak, but "is probably one of the most important biotech companies
that I've ever seen."
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