<SEC-DOCUMENT>0001206774-14-003276.txt : 20141113
<SEC-HEADER>0001206774-14-003276.hdr.sgml : 20141113
<ACCEPTANCE-DATETIME>20141113162600
ACCESSION NUMBER:		0001206774-14-003276
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20141113
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20141113
DATE AS OF CHANGE:		20141113

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GERON CORP
		CENTRAL INDEX KEY:			0000886744
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				752287752
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-20859
		FILM NUMBER:		141218758

	BUSINESS ADDRESS:	
		STREET 1:		149 COMMONWEALTH DRIVE
		STREET 2:		SUITE 2070
		CITY:			MENLO PARK
		STATE:			CA
		ZIP:			94025
		BUSINESS PHONE:		6504737700

	MAIL ADDRESS:	
		STREET 1:		149 COMMONWEALTH DRIVE
		STREET 2:		SUITE 2070
		CITY:			MENLO PARK
		STATE:			CA
		ZIP:			94025

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GERON CORPORATION
		DATE OF NAME CHANGE:	19960521
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>geron_8k.htm
<DESCRIPTION>CURRENT REPORT
<TEXT>

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<P align=center><B><FONT face="Times New Roman" size=2>UNITED STATES
<BR></FONT></B><B><FONT face="Times New Roman" size=2>SECURITIES AND EXCHANGE
COMMISSION<BR>WASHINGTON, D.C. 20549 <BR>___________<BR></FONT></B></P>
<P align=center><B><FONT face="Times New Roman" size=2>FORM 8-K </FONT></B></P>
<P align=center><B><FONT face="Times New Roman" size=2>CURRENT
REPORT<BR></FONT></B><B><FONT face="Times New Roman" size=2>PURSUANT TO SECTION
13 OR 15(d) OF THE<BR>SECURITIES EXCHANGE ACT OF 1934</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>Date of Report (Date of
earliest event reported): </FONT><B><FONT face="Times New Roman" size=2>November
13, 2014 </FONT></B><FONT face="Times New Roman" size=2></FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>GERON
CORPORATION</FONT></B><FONT face="Times New Roman" size=2> <BR></FONT><FONT face="Times New Roman" size=2>(Exact name of registrant as specified in its
charter) </FONT></P>
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    <TD noWrap style="text-align: center" width="33%"><B><FONT face="Times New Roman" size=2>Delaware</FONT></B></TD>
    <TD noWrap style="text-align: center" width="33%"><B><FONT face="Times New Roman" size=2>0-20859</FONT></B></TD>
    <TD noWrap style="text-align: center" width="33%"><B><FONT face="Times New Roman" size=2>75-2287752</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="33%"><FONT face="Times New Roman" size=2>(State or other jurisdiction</FONT></TD>
    <TD noWrap style="text-align: center" width="33%"><FONT face="Times New Roman" size=2>(Commission File Number)</FONT></TD>
    <TD noWrap style="text-align: center" width="33%"><FONT face="Times New Roman" size=2>(IRS
      Employer</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="33%"><FONT face="Times New Roman" size=2>of
      incorporation)</FONT></TD>
    <TD noWrap style="text-align: center" width="33%"></TD>
    <TD noWrap style="text-align: center" width="33%"><FONT face="Times New Roman" size=2>Identification No.)</FONT></TD></TR></TABLE><BR>
<P align=center><B><FONT face="Times New Roman" size=2>149 COMMONWEALTH DRIVE,
SUITE 2070<BR>MENLO PARK, CALIFORNIA 94025 <BR></FONT></B><FONT face="Times New Roman" size=2>(Address of principal executive offices, including
zip code) </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>(650)
473-7700<BR></FONT></B><FONT face="Times New Roman" size=2>(Registrant&#146;s
telephone number, including area code) </FONT></P>
<P align=left><FONT face="Times New Roman" size=2>Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions: </FONT></P>
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    </FONT></TD>
    <TD vAlign=top noWrap align=left width="98%"><FONT face="Times New Roman" size=2>Written communications pursuant to Rule 425 under the
      Securities Act (17 CFR 230.425)</FONT></TD></TR>
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    <TD vAlign=top noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=left width="98%"><FONT face="Times New Roman" size=2>Soliciting material pursuant to Rule 14a-12 under the
      Exchange Act (17 CFR 240.14a-12)</FONT></TD></TR>
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    <TD vAlign=top noWrap align=left width="1%"><FONT face=Wingdings size=2>o</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=left width="98%"><FONT face="Times New Roman" size=2>Pre-commencement communications pursuant to Rule 14d-2(b)
      under the Exchange Act (17 CFR 240.14d-2(b))</FONT></TD></TR>
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    <TD vAlign=top noWrap align=left width="1%"><FONT face=Wingdings size=2>o</FONT></TD>
    <TD vAlign=top noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;</FONT></TD>
    <TD vAlign=top noWrap align=left width="98%"><FONT face="Times New Roman" size=2>Pre-commencement communications pursuant to Rule 13e-4(c)
      under the Exchange Act (17 CFR
240.13e-4(c))</FONT></TD></TR></TABLE><BR>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Times New Roman" size=2>Item 1.01 Entry into a
Material Definitive Agreement.</FONT></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>On November 13, 2014 (the
&#147;Execution Date&#148;), Geron Corporation (&#147;Geron&#148; or &#147;the Company&#148;) and Janssen
Biotech, Inc., a Pennsylvania corporation (&#147;Janssen&#148;), entered into an exclusive
collaboration and license agreement (the &#147;Collaboration Agreement&#148;) to develop
and commercialize imetelstat worldwide for oncology, including hematologic
myeloid malignancies, and all other human therapeutic uses. The effectiveness of
the Collaboration Agreement is subject to the expiration or earlier termination
of all applicable waiting periods under the Hart-Scott-Rodino (&#147;HSR&#148;) Antitrust
Improvements Act of 1976, as amended.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the Collaboration
Agreement, Geron has granted to Janssen exclusive worldwide rights to develop
and commercialize imetelstat for all indications, and Janssen is responsible for
the development of, seeking regulatory approval for, and commercializing
imetelstat worldwide. Following a transition period, Janssen would also be
responsible for the manufacture of imetelstat on a global basis. Under the
Collaboration Agreement, development of imetelstat will initially proceed under
a mutually agreed joint clinical development plan (&#147;CDP&#148;), which includes two
agreed upon Phase 2 studies, one in myelofibrosis (the &#147;Initial Phase 2 MF
Study&#148;) and one in myelodysplastic syndrome (the &#147;Initial Phase 2 MDS Study&#148;),
to be pursued initially, as well as additional, possible registration studies in
myelofibrosis (&#147;MF&#148;) and myelodysplastic syndrome (&#147;MDS&#148;), and possible
exploratory Phase 2 and potential follow-on Phase 3 studies in acute myelogenous
leukemia (&#147;AML&#148;). Development costs for the Initial Phase 2 MF Study and the
Initial Phase 2 MDS Study will be shared between the parties on a 50/50 basis.
The Company expects the Initial Phase 2 MF Study to be initiated in mid-2015
followed later by the Initial Phase 2 MDS Study.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Upon the effectiveness of the
Collaboration Agreement, Janssen will owe to Geron $35 million as an upfront
payment. Following the protocol-specified primary analysis of the Initial Phase
2 MF Study or after a certain time period after the initiation of the first Phase 3 MF study, Janssen must notify
Geron whether it elects to maintain its license rights and continue to advance
the development of imetelstat in any indication. In the event that the Initial
Phase 2 MF Study has been terminated early or suspended, Janssen must instead
notify Geron of its election by the date that is the later of 24 months from the
initiation of the planned Initial Phase 2 MDS Study or 24 months from the
termination of the Initial Phase 2 MF Study or commencement of the suspension
period, as applicable.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>1</FONT><FONT face="Times New Roman"> </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In the event that Janssen
elects to continue to maintain its license rights and advance the development of
imetelstat in any indication within the applicable timeframe set forth in the
Collaboration Agreement (such election, the &#147;Continuation Election&#148;), Geron then
would have an option (the &#147;U.S. Opt-In Rights&#148;) to share further U.S.
development and promotion costs in exchange for higher tiered royalty rates and
higher future milestone payments if imetelstat is successfully developed and
approved. If Geron exercises the U.S. Opt-In Rights, then the parties would
share U.S. development and promotion costs on a 20/80 basis (Geron 20%, Janssen
80%), Geron would receive a $65 million milestone payment at the time of the
Continuation Election, and would be eligible to receive additional potential
payments of up to $470 million in development and regulatory milestones, up to
$350 million in sales milestones, and tiered royalties ranging from a mid-teens
up to low twenties percentage rate on worldwide net sales of imetelstat in any
countries where regulatory exclusivity exists or there are valid claims under
the patent rights exclusively licensed to Janssen. In addition, if Geron exercises the
U.S. Opt-In Rights, then Geron would also have a separate co-promotion option to
provide 20% of the U.S. selling effort with sales force personnel, in lieu of
funding 20% of U.S. promotion costs, upon regulatory approval and commercial launch of imetelstat in
the United States. Such co-promotion would be conducted under a Janssen prepared
promotion plan, and in accordance with a co-promotion agreement to be agreed by
the parties at the time of Geron&#146;s exercise of its co-promotion option. Geron
would be responsible for all costs associated with the fielding of its sales
force in the conduct of such co-promotion. All product sales would be booked by
Janssen. If Geron does not exercise the U.S. Opt-In Rights, then all further
development and promotion costs beyond the Initial Phase 2 MF Study or Initial
Phase 2 MDS Study would be borne by Janssen, Geron would receive a $65 million
milestone payment at the time of the Continuation Election plus a $70 million
payment for Janssen&#146;s retention of full U.S. rights, and would be eligible to receive additional
potential payments of up to $415 million in development and regulatory
milestones, up to $350 million in sales milestones, and tiered royalties ranging
from a double-digit up to mid-teens percentage rate on worldwide net sales in
any countries where regulatory exclusivity exists or there are valid claims
under the patent rights exclusively licensed to Janssen. After a Continuation Election
by Janssen, the Collaboration Agreement would remain in effect until the
expiration of the last-to-expire patent or the royalty obligations on sales of
imetelstat cease, unless terminated earlier. If Janssen does not effect a
Continuation Election, then the Collaboration Agreement would terminate and all
rights would revert to Geron. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the terms of the Collaboration Agreement, Geron and Janssen will create a joint
governance structure, including joint development and steering committees and
working groups, to oversee and manage worldwide regulatory, development and
manufacturing work under the joint CDP and promotional activities (assuming Geron exercises the U.S. Opt-In Rights) for
imetelstat, with Janssen responsible for the operational implementation of those
activities. In addition, each of Geron and Janssen may propose to the joint
development committee imetelstat development for any new indications not then
provided for in the joint CDP and if the parties agree such development should
be conducted outside of the joint CDP, each of Geron and Janssen would be
entitled to independently undertake such development at its own cost, subject to
the other party&#146;s obligation to provide reimbursement for its specified portion
of the costs for such independent development following marketing approval of
imetelstat in such newly proposed indication as a result of such independent
development. In the event that Geron does not exercise the U.S. Opt-In Rights
following Janssen&#146;s Continuation Election, the joint governance structure under
the Collaboration Agreement would be dissolved, a joint oversight committee
would monitor Janssen diligence obligations, and Geron would have no further
rights to conduct any independent imetelstat development.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the terms of the
Collaboration Agreement, Geron would remain responsible for prosecuting, at
Janssen&#146;s direction, its patents licensed to Janssen on the Execution Date, with
costs shared between Geron and Janssen on a 50/50 basis. For intellectual
property developed under the Collaboration Agreement (&#147;Development IP&#148;), the
party having sole ownership interest in such Development IP would be responsible
for prosecuting the patents, with Janssen bearing all of the costs for
Development IP solely owned by Janssen and costs shared between the parties on a
50/50 basis for Development IP either jointly owned or solely owned by
Geron.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The Collaboration Agreement
contains customary and other representations, warranties and covenants by Geron
and Janssen. Each of Geron and Janssen is required to indemnify the other party
against all losses and expenses relating to third party claims arising from its
development and, where applicable, commercialization of imetelstat, and breaches
of its representations, warranties and covenants. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>2</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Janssen may terminate the
Collaboration Agreement at any time for convenience (which includes
Janssen&#146;s failure to effect the Continuation Election), and due to a
safety-related concern. Depending on when the notice of termination from Janssen
occurs, Geron would be entitled to certain continued operational support and
cost-sharing under various circumstances. Upon a termination by Janssen for
safety reasons or for convenience (which includes the failure by Janssen to
effect the Continuation Election) or upon a termination by Geron as a result of
an uncured material breach of the Collaboration Agreement by Janssen, the
following would occur: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>Geron would receive all rights to
  regulatory filings, and the clinical data contained in</FONT> <FONT face="Times New Roman" size=2>such filings, related to
  imetelstat;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>all licenses to Janssen would
  terminate;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>Janssen would provide Geron with a
  worldwide, exclusive, perpetual license to, with a</FONT> <FONT face="Times New Roman" size=2>right to sublicense, intellectual property
  developed under the collaboration and necessary</FONT> <FONT face="Times New Roman" size=2>to develop, manufacture and commercialize
  imetelstat;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>Janssen would support the transition
  of relationships with third party subcontractors or</FONT> <FONT face="Times New Roman" size=2>sublicensees to Geron; and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>Janssen would supply imetelstat for a
  period of up to 12 to 24 months from the effective</FONT> <FONT face="Times New Roman" size=2>date of termination to enable Geron to procure
  an alternative manufacturing source.</FONT></LI></UL>
<P ALIGN="LEFT"><FONT face="Times New Roman" size=2>In addition to the above, in
the case of a termination by Janssen for convenience (which includes the failure
by Janssen to effect the Continuation Election), the following additional
provisions would apply:</FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>Janssen would provide operational
  support to Geron for up to 12 months from the date of</FONT> <FONT face="Times New Roman" size=2>notice of termination; and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>Janssen would continue funding the
  development costs allocable to Janssen for certain</FONT> <FONT face="Times New Roman" size=2>periods, depending on the timing of
  termination.</FONT> </LI></UL>
<P ALIGN="LEFT" ><FONT face="Times New Roman" size=2>In addition, either Geron or
Janssen may terminate the Collaboration Agreement if the other party is subject
to certain insolvency proceedings or if the other party materially breaches the
Collaboration Agreement and the breach remains uncured for a specified period,
which may be extended in certain circumstances. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The foregoing description of
the Collaboration Agreement and the transactions contemplated thereby does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the complete text of the Collaboration Agreement, which will be
filed with the Securities and Exchange Commission (the &#147;SEC&#148;) as an exhibit to
the Company&#146;s Annual Report on Form 10-K for the year ending December 31,
2014.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>3</FONT><FONT face="Times New Roman"> </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><FONT face="Times New Roman" size=2>Use of Forward-Looking
Statements </FONT></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Except for the historical
information contained herein, this Current Report on Form 8-K contains
forward-looking statements made pursuant to the &#147;safe harbor&#148; provisions of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned that
statements in this Current Report on Form 8-K regarding (i) the anticipated
effectiveness of the Collaboration Agreement, (ii) the Company&#146;s receipt of an
initial payment and potential receipt of development, regulatory, and sales
milestones, as well as royalties on potential future sales of imetelstat
commercialized under the Collaboration Agreement, (iii) planned and potential
clinical trials of imetelstat to be conducted under the Collaboration
Agreement, including the Initial Phase 2 MF Study and the Initial Phase 2 MDS
Study, and other potential activities under the Collaboration Agreement, and
(iv) other statements that are not historical facts, constitute forward-looking
statements. These statements involve risks and uncertainties that can cause
actual results to differ materially from those in such forward-looking
statements. These risks and uncertainties, include, without limitation, risks
and uncertainties related to: (i) the ability of the parties to satisfy all of
the conditions for the effectiveness of the Collaboration Agreement, including
the expiration or termination of waiting periods under HSR; (ii) the uncertain
and time consuming product development and regulatory process, including whether
the parties will succeed in overcoming all of the clinical safety and efficacy,
technical, scientific, manufacturing and regulatory challenges in the
development and commercialization of imetelstat; (iii) the fact that Geron may
not receive any milestone, royalty or other payments from Janssen because
Janssen may terminate the Collaboration Agreement for any reason; (iv) the
ability of Geron and Janssen to protect and maintain intellectual property
rights for imetelstat; (v) the Company&#146;s dependence on Janssen, including the
risks that if Janssen were to breach or terminate the Collaboration Agreement or
otherwise fail to successfully develop and commercialize imetelstat and in a
timely manner, the Company would not obtain the anticipated financial and other
benefits of the Collaboration Agreement and the clinical development or
commercialization of imetelstat could be delayed or terminated; and (vi) other
risks described in Geron&#146;s SEC filings, including under the heading &#147;Risk
Factors&#148; Exhibit 99.1 hereto which is incorporated herein by reference.
Additional information and factors that could cause actual results to differ
materially from those in the forward-looking statements are contained under the
heading &#147;Risk Factors&#148; in Exhibit 99.1 hereto which is incorporated herein by
reference. Undue reliance should not be placed on forward-looking statements,
which speak only as of the date they are made, and the facts and assumptions
underlying the forward-looking statements may change. Except as required by law,
Geron disclaims any obligation to update these forward-looking statements to
reflect future information, events or circumstances.</FONT></P>
<P align=left><B><FONT face="Times New Roman" size=2>Item 8.01. Other Events.
</FONT></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The Company is filing
information for the purpose of updating and superseding the risk factor
disclosure contained in its prior public filings, including those discussed
under the heading &#147;Item 1A. Risk Factors&#148; in its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2014, filed with the SEC on November 5,
2014. The updated risk factors are filed as Exhibit 99.1 to this Current Report
on Form 8-K and are incorporated herein by reference. </FONT></P>
<P align=left><B><FONT face="Times New Roman" size=2>Item 9.01. Financial
Statements and Exhibits. </FONT></B></P>
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    <TD noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>(d)</FONT></TD>
    <TD noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Exhibits</FONT></TD>
    <TD noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=left width="94%"></TD></TR>
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    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="94%">&nbsp;</TD></TR>
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    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Times New Roman" size=2>Exhibit Number</FONT></B></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="94%"><B><FONT face="Times New Roman" size=2>Description</FONT></B></TD></TR>
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    <TD noWrap align=left width="1%"></TD>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>99.1</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="94%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Updated Risk
Factors</FONT></TD></TR></TABLE><BR>
<P align=center><FONT face="Times New Roman" size=2>4</FONT><FONT face="Times New Roman"> </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>SIGNATURE </FONT></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
</FONT></P>
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    <TD noWrap align=left width="49%" colSpan=2><FONT face="Times New Roman" size=2>GERON CORPORATION</FONT></TD></TR>
  <TR>
    <TD width="100%" colSpan=4>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face="Times New Roman" size=2>Date: November 13, 2014</FONT></TD>
    <TD noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>By:</FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="48%"><FONT face="Times New Roman" size=2>/s/ Stephen N.
  Rosenfield</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="1%">&nbsp;</TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Name:&nbsp;&nbsp; </FONT></TD>
    <TD noWrap align=left width="48%"><FONT face="Times New Roman" size=2>Stephen N. Rosenfield</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"><FONT face="Times New Roman" size=2>Title:</FONT></TD>
    <TD noWrap align=left width="48%"><FONT face="Times New Roman" size=2>Executive Vice President,</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="48%"><FONT face="Times New Roman" size=2>General Counsel and</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="1%"></TD>
    <TD noWrap align=left width="48%"><FONT face="Times New Roman" size=2>Corporate Secretary</FONT></TD></TR></TABLE><BR>
<P align=center><FONT face="Times New Roman" size=2>5</FONT><FONT face="Times New Roman"> </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>EXHIBIT</FONT></B><B><FONT face="Times New Roman" size=2>
</FONT></B><B><FONT face="Times New Roman" size=2>INDEX</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<TABLE style="LINE-HEIGHT: 14pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="1%"><B><FONT face="Times New Roman" size=2>Exhibit No.</FONT></B></TD>
    <TD noWrap align=left width="1%"><FONT size=2 face="Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></TD>
    <TD style="BORDER-BOTTOM: #000000 1pt solid" noWrap align=left width="99%"><B><FONT face="Times New Roman" size=2>Description</FONT></B></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap style="text-align: center" width="1%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>99.1</FONT></TD>
    <TD noWrap align=left width="1%" bgColor=#c0c0c0></TD>
    <TD noWrap align=left width="99%" bgColor=#c0c0c0><FONT face="Times New Roman" size=2>Updated Risk
Factors</FONT></TD></TR></TABLE><BR>
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<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit99-1.htm
<DESCRIPTION>UPDATED RISK FACTORS
<TEXT>

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<P align=right><B><FONT face="Times New Roman" size=2>EXHIBIT
99.1</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>RISK
FACTORS</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><I><FONT face="Times New Roman" size=2>Our business is subject to
various risks and uncertainties that may have a material adverse effect on our
business, financial condition or results of operations. You should carefully
consider the risks and uncertainties described below, together with all of the
other information included in this Form 8-K, our most recent Quarterly Report on
Form 10-Q for the quarter ended September 30, 2014 and our most recent Annual
Report on Form 10-K for the year ended December 31, 2013. Our business faces
significant risks and uncertainties, and those described below may not be the
only risks and uncertainties we face. Additional risks and uncertainties not
presently known to us or that we currently believe are immaterial may also
significantly impair our business, financial condition or results of operations.
If any of these risks or uncertainties occur, our business, financial condition
or results of operations could suffer, the market price of our common stock
could decline and you could lose all or part of your investment in our common
stock.</FONT></I></P>
<P align=center><B><FONT face="Times New Roman" size=2>RISKS RELATED TO OUR
BUSINESS</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Our recently-announced
collaboration agreement with Janssen Biotech, Inc., or Janssen, has not yet
become effective. Our failure to cause the collaboration agreement to become
effective would have a material adverse effect on our financial condition,
business prospects and the price of our common stock</FONT></I></B><FONT face="Times New Roman" size=2>.</FONT><B><I><FONT face="Times New Roman" size=2>
</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In November 2014, we entered
into an exclusive collaboration and license agreement, or the Collaboration
Agreement, with Janssen to develop and commercialize imetelstat worldwide for
oncology, including hematologic myeloid malignancies, and other human
therapeutic uses. Under the terms of the Collaboration Agreement, we have
granted to Janssen exclusive worldwide rights to develop and commercialize
imetelstat for all indications, and Janssen is responsible for the development
of, seeking regulatory approval for, and commercializing imetelstat worldwide.
However, the Collaboration Agreement is not yet effective and may never become
effective. In this regard, effectiveness of the Collaboration Agreement is
conditioned on the expiration or termination of all applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. If
the Collaboration Agreement does not become effective, then we will not receive
any of the anticipated benefits of the Collaboration Agreement, including
financial payments, which would materially and adversely affect our imetelstat
development plans, and we would need to undertake development, manufacturing,
regulatory and commercialization activities for imetelstat solely at our own
expense. This, in turn, would have a material adverse effect on our financial
condition, business prospects and the price of our common stock.</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>If Janssen does not
elect to continue the development of imetelstat through a Continuation Decision,
our business and business prospects would be significantly
harmed.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the terms of the
Collaboration Agreement, Janssen is not obligated to make any additional
payments to us (apart from the initial upfront payment should the Collaboration
Agreement become effective) until such time as it affirmatively elects to
continue to advance the development of imetelstat, or the Continuation Decision,
following the protocol-specified primary analysis of a Phase 2 clinical trial in
myelofibrosis, or the Phase 2 MF Results, or, if the Phase 2 clinical trial in
myelofibrosis, or the Initial Phase 2 MF Study, is terminated early or suspended
for an extended period of time, within a certain time period thereafter. The
timing of Janssen&#146;s Continuation Decision and whether Janssen elects to continue
further clinical development of imetelstat also affects the timing and
availability of our opt-in decision to share further U.S. development and
promotion costs and be eligible for higher tiered royalty rates and potential
future milestone payments, or the U.S. Opt-In Rights, as well as our election to
co-promote in the U.S., or the U.S. Co-Promotion Option. If the Initial Phase 2
MF Study is terminated early, suspended for
an extended period of time, or is otherwise unsuccessful, Janssen may determine
not to elect to continue further clinical development of imetelstat, in which
case, the Collaboration Agreement would terminate, we would not be eligible for
any further payments from Janssen under that agreement and our business and
business prospects would be severely and adversely harmed. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>1</FONT><FONT face="Times New Roman"> </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><I><FONT face="Times New Roman" size=2>We are dependent upon
our collaborative relationship with Janssen to further develop, manufacture and
commercialize imetelstat, our sole product candidate. If Janssen fails to
perform as expected, the potential for us to generate future revenues from
milestone payments and royalties from imetelstat would be significantly reduced,
the development and/or commercialization of imetelstat may be terminated or
substantially delayed, and our business would be severely harmed.
</FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the terms of the
Collaboration Agreement, we and Janssen will create a joint governance
structure, including joint development and steering committees and working
groups, to oversee and manage worldwide regulatory, development, manufacturing
and commercialization activities for imetelstat; however, Janssen will be solely
responsible for the operational implementation for those activities.
Accordingly, the timely and successful completion by Janssen of those activities
will significantly affect the timing and amount of any revenues from milestone
payments and royalties we may receive under the Collaboration Agreement, and
these activities will be influenced by, among other things, the efforts and
allocation of resources by Janssen, none of which we control. If Janssen does
not perform in the manner we expect or fulfill its responsibilities in a timely
manner, or at all, the clinical development, manufacturing, regulatory approval
and commercialization efforts related to imetelstat could be delayed or
terminated, and it could become necessary for us to assume the responsibilities
for the clinical development, manufacturing, regulatory approval or
commercialization of imetelstat at our own expense. Accordingly, there can be no
assurance that any of the development, regulatory or sales milestones will be
achieved or that we will receive any future milestone or royalty payments under
the Collaboration Agreement.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, our collaboration
with Janssen may be unsuccessful due to other factors, including the
following:</FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>Janssen may choose to terminate the
  Collaboration Agreement for convenience;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>Janssen may choose not to
  affirmatively elect to continue to advance the development of
  imetelstat</FONT> <FONT face="Times New Roman" size=2>through a Continuation
  Decision;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the Phase 2 MF Results and/or the Phase 2 clinical trial in myelodysplastic
           syndrome,            or the            Initial Phase 2 MDS Study, may be negative or inconclusive, or</FONT> <FONT face="Times New Roman" size=2>Janssen
           may observe            safety issues in either of    these studies, which may result in Janssen electing</FONT> <FONT face="Times New Roman" size=2>not
           to continue further clinical development of    imetelstat in which case, we would receive no</FONT> <FONT face="Times New Roman" size=2>further
           payments from Janssen under the    Collaboration Agreement;<BR>&nbsp;</FONT>    </LI><LI><FONT face="Times New Roman" size=2>Janssen may choose not to develop and
  commercialize imetelstat in all relevant markets or for one</FONT> <FONT face="Times New Roman" size=2>or more indications, if at all;<BR>&nbsp;</FONT>

  </LI><LI><FONT face="Times New Roman" size=2>Janssen may take considerably more
  time advancing imetelstat through the clinical and regulatory</FONT> <FONT face="Times New Roman" size=2>process than we currently anticipate, which
  could materially delay the achievement of milestones</FONT> <FONT face="Times New Roman" size=2>and, consequently the receipt of milestone
  payments from Janssen, and ultimately, any royalties on</FONT> <FONT face="Times New Roman" size=2>worldwide net sales;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>it may be difficult for us to prove
  that Janssen breached its obligation to use &#147;commercially</FONT> <FONT face="Times New Roman" size=2>reasonable efforts&#148; with regard to the
  development, regulatory approval, manufacture and</FONT> <FONT face="Times New Roman" size=2>commercialization of imetelstat under the
  Collaboration Agreement; <BR>&nbsp;</FONT>

  </LI><LI><FONT face="Times New Roman" size=2>Janssen may not dedicate the</FONT> <FONT face="Times New Roman" size=2>resources that would be necessary to carry
  imetelstat through clinical development or may not obtain the necessary
  regulatory approvals, and this would delay the achievement of development,
  regulatory or sales milestones; </FONT></LI></UL>
<P align=center><FONT face="Times New Roman" size=2>2</FONT><FONT face="Times New Roman"> </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV>
<UL style="FONT-SIZE: 10pt">

<LI><FONT face="Times New Roman" size=2>subject to our election of the U.S.
  Co-Promotion Option, Janssen will be responsible for all aspects</FONT> <FONT face="Times New Roman" size=2>of the commercialization of imetelstat
  worldwide, including pricing decisions which would affect</FONT> <FONT face="Times New Roman" size=2>the royalties on worldwide net sales we could
  receive;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>Janssen may change the focus of its
  commercialization efforts or prioritize other programs more</FONT> <FONT face="Times New Roman" size=2>highly and, accordingly, reduce the efforts and
  resources allocated to imetelstat, which would have</FONT> <FONT face="Times New Roman" size=2>the direct effect of reducing our share of
  potential co-promotion activities since the extent of our</FONT> <FONT face="Times New Roman" size=2>U.S. Co-Promotion Option is limited to a
  percentage of overall promotion activities under</FONT> <FONT face="Times New Roman" size=2>the Collaboration Agreement;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>upon assuming manufacturing
  responsibilities for imetelstat, after a transition period, Janssen may</FONT>
  <FONT face="Times New Roman" size=2>fail to manufacture or supply sufficient
  quantities of imetelstat for use in planned clinical trials</FONT> <FONT face="Times New Roman" size=2>which could delay or suspend any imetelstat
  clinical activities;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>Janssen may fail to develop a
  commercially viable formulation or manufacturing process for</FONT> <FONT face="Times New Roman" size=2>imetelstat, and may fail to manufacture or
  supply sufficient quantities of imetelstat for commercial</FONT> <FONT face="Times New Roman" size=2>use, if approved, which would result in lost
  sales revenue and reduced royalties for us;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>Janssen may not comply with all
  applicable regulatory requirements or may fail to report safety</FONT> <FONT face="Times New Roman" size=2>data in accordance with all applicable
  regulatory requirements, which could delay or suspend</FONT> <FONT face="Times New Roman" size=2>clinical activities being performed by Janssen
  or by us; and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>if Janssen is acquired during the term
  of our collaboration, the acquirer may have different</FONT> <FONT face="Times New Roman" size=2>strategic priorities that could cause it to
  terminate the Collaboration Agreement or reduce its</FONT> <FONT face="Times New Roman" size=2>commitment to our collaboration.</FONT></LI></UL>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the terms of the
Collaboration Agreement, Janssen is not obligated to make any additional
payments to us (apart from the initial upfront payment should the Collaboration
Agreement become effective) until it makes an affirmative Continuation Decision
following the Phase 2 MF Results, or, if the Initial Phase 2 MF Study is
terminated early or suspended for an extended period of time, within a certain
time period thereafter. The timing of Janssen&#146;s Continuation Decision and
whether Janssen elects to continue further clinical development of imetelstat
also affects the timing and availability of our decision regarding U.S. Opt-In
Rights, as well as our election of the U.S. Co-Promotion Option. If the Initial
Phase 2 MF Study is terminated early, suspended for an extended period of time,
or is otherwise unsuccessful, Janssen may determine not to elect to continue
further clinical development of imetelstat, in which case, the Collaboration
Agreement would terminate, we would not be eligible for any further payments
from Janssen under that agreement and our business and business prospects would
be severely and adversely harmed. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>There may be
disagreements between Janssen and Geron during the term of the Collaboration
Agreement, and if they are not settled amicably or in the favor of Geron, the
result my harm our business. </FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>We are subject to the risk of
possible disagreements with Janssen, including those regarding the development
and/or commercialization of imetelstat, interpretation of the Collaboration
Agreement and ownership of proprietary rights. In
addition, in certain circumstances we may believe that we have achieved a
particular milestone and Janssen may disagree with our belief. In that case,
receipt of that milestone payment may be
delayed or may never be received, which would adversely affect our financial
condition and may require us to adjust our operating plans.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>3</FONT><FONT face="Times New Roman"> </FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>While the Collaboration
Agreement provides for a joint governance structure to oversee and manage
worldwide regulatory, development, manufacturing and commercialization
activities for imetelstat, Janssen generally will, subject to limited
exceptions, have the deciding vote in the event of any disagreement. In any
event, the joint governance structure contemplated by the Collaboration
Agreement will be dissolved in the event that we do not exercise our U.S. Opt-In
Rights, which would preclude our ability to participate in any further
decision-making for imetelstat. Reliance on a joint governance structure also
subjects us to the risk that changes in key management personnel that are
members of the various joint committees may materially and adversely affect the
functioning of these committees, which could significantly delay or preclude
imetelstat development and/or commercialization. As a result of possible
disagreements with Janssen, we also may become involved in litigation or
arbitration, which would be time-consuming and expensive. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>If Janssen terminates
the Collaboration Agreement, it would severely and adversely affect our business
prospects and the future of imetelstat, our sole product candidate.
</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Janssen may terminate the
Collaboration Agreement at any time for convenience. Any termination of the
Collaboration Agreement by Janssen at any time would have a material adverse
effect on our results of operations, financial condition, business prospects and
the future of imetelstat, any of which may cause us to cease operations.
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, if Janssen
terminates the Collaboration Agreement, then depending on the timing of such
event: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>we would no longer have the right to
  receive any milestone payments or royalties under the</FONT> <FONT face="Times New Roman" size=2>Collaboration Agreement;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the development of imetelstat may be
  terminated or significantly delayed;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>we would bear all of the risks and
  costs related to the further clinical development, manufacturing,</FONT> <FONT face="Times New Roman" size=2>regulatory approval and commercialization of
  imetelstat;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>we would need to raise additional
  capital if we were to choose to internally pursue imetelstat</FONT> <FONT face="Times New Roman" size=2>development on our own or establish alternative
  collaborations with third-party collaboration</FONT> <FONT face="Times New Roman" size=2>partners, which may not be possible, or we may
  not be able to do so on terms that are acceptable to</FONT> <FONT face="Times New Roman" size=2>us, in which case it may be necessary for us to
  limit the size or scope of the imetelstat development</FONT> <FONT face="Times New Roman" size=2>program or seek additional funding by other
  means to accommodate the increased expenditures;</FONT> <FONT face="Times New Roman" size=2>and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>we would need to hire additional
  employees to support the development and commercialization of imetelstat, which would increase our need for
  additional funding.</FONT></LI></UL>


<P align=center><FONT face="Times New Roman" size=2>4</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>


<P align=left><B><I><FONT face="Times New Roman" size=2>Delays in the initiation
of, or the inability to initiate, subsequent clinical trials of imetelstat, such
as the Initial Phase 2 MF Study or the Initial Phase 2 MDS Study planned to be
conducted under the Collaboration Agreement, could result in increased
development costs and would delay our ability to earn revenues from milestone
payments or royalties from the Collaboration Agreement with Janssen.
</FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>To date, we have not initiated
any clinical trials evaluating imetelstat in any hematologic myeloid
malignancies (other than essential thrombocythemia), including myelofibrosis, or
MF. Advancing clinical development of imetelstat will be influenced by results
from existing clinical trials, such as the ongoing clinical trial in MF
and other myeloid malignancies being conducted at Mayo Clinic, known as the MF
Pilot Study, and potential future clinical trials of imetelstat in hematologic
myeloid malignancies, such as the Initial Phase 2 MF Study or the Initial Phase
2 MDS Study planned to be conducted under the Collaboration Agreement. The
commencement of potential future clinical trials of imetelstat could be delayed
or abandoned for a variety of reasons, including as a result of failures or
delays in: </FONT></P>
<UL style="FONT-SIZE: 10pt">

<LI><FONT face="Times New Roman" size=2>obtaining regulatory clearance to
  commence subsequent clinical trials of imetelstat in a timely manner, or at all, in the United States or other
  countries;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the inability to properly design,
  conduct and/or complete current and potential future clinical trials</FONT>
  <FONT face="Times New Roman" size=2>of imetelstat, including the Initial Phase
  2 MF Study or the Initial Phase 2 MDS Study planned to</FONT> <FONT face="Times New Roman" size=2>be conducted under the Collaboration
  Agreement;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>commencing, enrolling or completing
  potential future clinical trials, including the Initial Phase 2</FONT> <FONT face="Times New Roman" size=2>MF Study or the Initial Phase 2 MDS Study
  planned to be conducted under the Collaboration</FONT> <FONT face="Times New Roman" size=2>Agreement, and promptly or adequately reporting
  data from such trials;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>demonstrating sufficient safety and
  efficacy in future Phase 2 clinical trials, including the Initial</FONT> <FONT face="Times New Roman" size=2>Phase 2 MF Study or the Initial Phase 2 MDS
  Study planned to be conducted under the</FONT> <FONT face="Times New Roman" size=2>Collaboration Agreement, to obtain regulatory clearance to commence
  subsequent clinical trials;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>manufacturing sufficient quantities of
  imetelstat;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>producing imetelstat in a manner that
  meets the quality standards of the U.S. Food and Drug</FONT> <FONT face="Times New Roman" size=2>Administration, or FDA, and other regulatory
  agencies;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>ensuring the ability to manufacture
  imetelstat at acceptable costs for Phase 3 clinical trials and</FONT> <FONT face="Times New Roman" size=2>commercialization;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>obtaining clearance or approval of
  proposed trial designs or manufacturing specifications from the</FONT> <FONT face="Times New Roman" size=2>FDA and other regulatory
  authorities;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>reaching agreement on acceptable terms
  and on a timely basis, if at all, with collaborators and</FONT> <FONT face="Times New Roman" size=2>vendors located in the United States or foreign
  jurisdictions, including contract research</FONT> <FONT face="Times New Roman" size=2>organizations, laboratory service providers and trial sites, on all
  aspects of clinical trials;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>obtaining institutional review board
  or ethics committee approval to conduct clinical trials at</FONT> <FONT face="Times New Roman" size=2>prospective clinical trial sites;
  and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>securing and successfully screening
  appropriate subjects for participation in clinical trials.</FONT></LI></UL>
<P align=left><FONT face="Times New Roman" size=2>Failures or delays with
respect to any of these events could adversely affect the ability to initiate,
maintain or successfully complete any subsequent clinical trials of imetelstat,
which could increase development costs, impair our ability to earn revenues from
milestone payments or royalties from the Collaboration Agreement with Janssen or
cause Janssen to terminate the Collaboration Agreement, any of which could
adversely impact our financial results and severely and adversely affect our
business prospects. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>5</FONT><FONT face="Times New Roman"> </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><I><FONT face="Times New Roman" size=2>If there are any safety
or efficacy results that cause the benefit-risk profile of imetelstat to become
unacceptable, the clinical development of imetelstat would be delayed or halted,
and as a result, Janssen may terminate the Collaboration Agreement, which would
severely and adversely affect our business prospects, and may cause us to cease
operations. </FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Imetelstat may prove to have
undesirable or unintended side effects or other characteristics adversely
affecting its safety, efficacy or cost effectiveness that could prevent or limit
its approval for marketing and successful commercial use, or that could delay or
prevent the commencement and/or completion of clinical trials for imetelstat.
For example, although the FDA removed the full clinical hold on our Investigational New Drug, or IND, application for
imetelstat, if patients in current or future clinical trials experience similar
or more severe hepatotoxicity, including elevations of liver function tests or
severe hepatic adverse events, our IND for imetelstat may again be placed on
clinical hold, and we, in collaboration with Janssen, may be precluded from
further developing the drug. In addition, if regulatory submissions requesting
approval to market imetelstat are submitted, after reviewing the data in such
submissions, the FDA and regulatory agencies in other countries may conclude
that the overall benefit-risk profile of imetelstat treatment, including
hepatotoxicity or severe hepatic adverse events, may preclude approval of
imetelstat for marketing or further development for any indications, including
hematologic malignancies. Any of these events would severely harm our business
and prospects, and would likely cause us to cease operations.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Further, in our Phase 1
clinical trials of imetelstat, we observed dose-limiting toxicities, including
reduced platelet count, or thrombocytopenia, when the drug was used as a single
agent, and reduced white blood cell count, or neutropenia, when the drug was
used in combination with paclitaxel, as well as a low incidence of severe
infusion reactions. In our Phase 2 clinical trials of imetelstat in essential
thrombocythemia, or ET, multiple myeloma, or MM, and solid tumors, we have
observed hematologic toxicities as well as gastrointestinal events, infections,
muscular and joint pain, fatigue and infusion reactions. In addition, in our
Phase 2 clinical trials of imetelstat, we have observed liver function test, or
LFT, abnormalities, the clinical significance and long-term consequences of
which are currently undetermined. In our Phase 2 trial in ET, one patient died
of bleeding esophageal varices, a complication of chronic liver disease, which
was assessed by the investigator as possibly related to imetelstat. In the MF
Pilot Study, myelosuppression has been the primary dose-limiting toxicity
reported to date, consistent with our observations in previous Geron-sponsored
imetelstat studies. However, during the MF Pilot Study, more persistent and
profound myelosuppression, particularly thrombocytopenia, was observed with
imetelstat administered on a weekly basis. This included one case of febrile
neutropenia after prolonged myelosuppression with intracranial hemorrhage
resulting in patient death, which was assessed as possibly related to imetelstat
by the investigator. Since the MF Pilot Study is an ongoing study with
additional data being generated, the benefit-risk profile of imetelstat in MF
will continue to be assessed, including the risk of hepatotoxicity.</FONT></P>


<P align=center><FONT face="Times New Roman" size=2>6</FONT><FONT face="Times New Roman"> </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Clinical trials by their
nature examine the effect of a potential therapy in a sample of the potential
future patient population. As such, clinical trials conducted with imetelstat,
to date and in the future, may not uncover all possible adverse events that
patients treated with imetelstat may experience. In collaboration with Janssen,
we may in the future observe or report dose-limiting or hematologic toxicities
or other safety issues in potential future clinical trials of imetelstat,
including the Initial Phase 2 MF Study and the Initial Phase 2 MDS Study planned
to be conducted under the Collaboration Agreement. Likewise, because previously
enrolled patients continue to receive imetelstat in the MF Pilot Study,
additional or more severe toxicities or safety issues in the MF Pilot Study,
including additional serious adverse events and LFT abnormalities, may be
observed or reported as patient treatment continues and more data become
available. If such toxicities or other safety issues in any clinical trial of
imetelstat result in an unacceptable benefit-risk profile, then: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>the commencement and/or completion of
  any current or future clinical trials, including the MF</FONT> <FONT face="Times New Roman" size=2>Pilot Study and the Initial Phase 2 MF Study and
  the Initial Phase 2 MDS Study planned to be</FONT> <FONT face="Times New Roman" size=2>conducted under the Collaboration Agreement,
  would likely be delayed or prevented;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the MF Pilot Study or any potential
  future clinical trials, including the Initial Phase 2 MF Study</FONT> <FONT face="Times New Roman" size=2>and the Initial Phase 2 MDS Study planned to be
  conducted under the Collaboration Agreement,</FONT> <FONT face="Times New Roman" size=2>may be placed on clinical hold or halted by
  regulatory authorities, such as the previous clinical</FONT> <FONT face="Times New Roman" size=2>holds placed by the FDA on our IND for
  imetelstat and the IND for the MF Pilot Study; or<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>additional, unforeseen trials or
  preclinical studies may be required to be conducted.</FONT></LI></UL>
<P align=left><FONT face="Times New Roman" size=2>The occurrence of any of these
events would likely cause Janssen to abandon their development of imetelstat
entirely and terminate the Collaboration Agreement. Any termination of the
Collaboration Agreement by Janssen would have a material adverse effect on our
results of operations, financial condition, business prospects and the future of
imetelstat, any of which may cause us to cease operations. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Our decision to exercise
our U.S. Opt-In Rights under the Collaboration Agreement with Janssen for
imetelstat must be made within a limited time after Janssen makes its
Continuation Decision and, as a result, we may make a substantial capital
investment based on limited clinical data. </FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>We must elect to exercise our  U.S. Opt-In
Rights within a short timeframe following Janssen&#146;s Continuation  Decision. Although we will receive information from
Janssen regarding data from  the  Initial Phase 2 MF Study and the Initial Phase 2 MDS Study, proposed future
clinical development plans and costs,  estimates in timing for commercializing imetelstat and related promotional
activities, and calculation of our share of development costs incurred to date  by Janssen that we will be required to
reimburse if we exercise our U.S. Opt-In  Rights, we will be required to rapidly decide whether to make a substantial
capital investment in imetelstat prior to the conclusion of any Phase 3  registration-enabling clinical trial. Accordingly,
if imetelstat were to become  unsuccessful in any Phase 3 registration-enabling clinical trial or fails to  receive
regulatory approval, we would not receive any financial return on this  substantial capital investment. Such an occurrence
would negatively impact our  financial condition and results of operations. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We may not be able to
successfully acquire or in-license new product opportunities for development,
which would limit our growth and revenue potential.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Assuming that the
Collaboration Agreement becomes effective and Janssen elects to advance the
development of imetelstat under the Collaboration Agreement, we plan to
diversify our sole product candidate development risk by identifying and seeking
to acquire or in-license new product opportunities for development. However, we
may not be able to identify promising new product candidates. In addition, the
competition to acquire or in-license rights to promising product candidates is
fierce, and many of our competitors are large, multinational pharmaceutical and
biotechnology companies with considerably more financial, development and
commercialization resources and experience than we have. Thus, even if we
succeed in identifying promising new product candidates, we may not be able to
acquire rights to them on acceptable terms, or at all. In any event, any growth
through acquisition or in-licensing will depend upon our identifying and
obtaining product candidates, our ability to develop those product candidates
and the availability of funding to complete the development of, obtain
regulatory approval for and commercialize these product candidates. If we are
unable to identify and acquire new product candidates, we will be unable to
diversify our sole product candidate development risk, and our growth and
revenue potential could be limited.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>7</FONT><FONT face="Times New Roman"> </FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV>


<BR>
<P align=left><B><I><FONT face="Times New Roman" size=2>We may not be able to
successfully retain key personnel to support our collaboration with Janssen or
to manage any future growth.</FONT></I></B><FONT face="Times New Roman" size=2>
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the terms of the
Collaboration Agreement, we and Janssen will create a joint governance
structure, including committees and working groups, to manage worldwide
regulatory, development, manufacturing and commercialization activities for
imetelstat, and we will have significant responsibilities to oversee and
participate in the collaboration with Janssen. In addition, we will remain
responsible for prosecuting, at Janssen&#146;s direction, the patents we licensed to
Janssen, and have sole responsibility for those patents that were not licensed
to Janssen. If we are unable to successfully retain, motivate and incentivize
our personnel, our ability to support the Collaboration Agreement with Janssen
could be impaired, and our business and the price of our common stock would be
adversely impacted.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, our future growth
success depends to a significant extent on the skills, experience and efforts of
our executive officers and key members of our clinical and scientific staff. We
face intense competition for qualified individuals from numerous pharmaceutical,
biopharmaceutical and biotechnology companies, as well as academic and other
research institutions. The previous restructurings we implemented, as well as
our collaboration with Janssen and uncertainties regarding our ability to
diversify our sole product candidate development risk, could have an adverse
impact on our ability to retain and recruit qualified personnel or we may incur
unanticipated inefficiencies caused by our reduced personnel resources. We may
be unable to retain our current personnel or attract or assimilate other highly
qualified management and clinical personnel in the future on acceptable terms.
The loss of any or all of these individuals could harm our business and could
impair our ability to support our collaboration with Janssen or to support
future growth. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We and certain of our
officers have been named as defendants in three purported securities lawsuits,
two of which are securities class action lawsuits, and certain of our officers
and directors have been named as defendants in a derivative lawsuit. These, and
potential similar or related lawsuits, could result in substantial damages,
divert management's time and attention from our business, and have a material
adverse effect on our results of operations. These lawsuits and any other
lawsuits to which we are subject will be costly to defend or pursue and are
uncertain in their outcome. </FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Securities-related class
action lawsuits and derivative litigation has often been brought against
companies, including many biotechnology companies, which experience volatility
in the market price of their securities. This risk is especially relevant for us
because biotechnology and biopharmaceutical companies often experience
significant stock price volatility in connection with their product development
programs. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>On March 14, 2014, a purported
securities class action lawsuit was commenced in the United States District
Court for the Northern District of California, or the California District Court,
naming as defendants us and certain of our officers. The lawsuit alleges
violations of the Securities Exchange Act of 1934 in connection with allegedly
false and misleading statements made by us related to our Phase 2 trial of
imetelstat in patients with ET or polycythemia vera, or PV. The plaintiff
alleges, among other things, that we failed to disclose facts related to the
occurrence of persistent low-grade LFT abnormalities observed in our Phase 2
trial of imetelstat in ET or PV patients and the potential risk of chronic liver
injury following long-term exposure to imetelstat. The plaintiff seeks damages
and an award of reasonable costs and expenses, including attorneys' fees.
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>On March 28, 2014, a second
purported securities class action lawsuit was commenced in the California
District Court, naming as defendants us and certain of our officers. This
lawsuit, which is based on the same factual background as the purported
securities class action lawsuit that commenced on March 14, 2014, also alleges
violations of the Securities Exchange Act of 1934 and seeks damages and an award
of reasonable costs and expenses, including attorneys' fees. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>8</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>On June 30, 2014, both of the
foregoing lawsuits, or the Class Action Lawsuits, were consolidated for all
purposes, and a lead plaintiff and lead counsel were appointed by the California
District Court. On July 21, 2014, the California District Court ordered the lead
plaintiff to file its consolidated amended complaint in the Class Action
Lawsuits, which was filed on September 19, 2014. Our response to the
consolidated amended complaint is due by November 18, 2014. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>On June 6, 2014, a purported
securities lawsuit, not styled as a class action, was commenced in the United
States District Court for the Southern District of Mississippi, or the
Mississippi District Court, naming as defendants us and certain of our officers.
This lawsuit, which is based on the same factual background as the Class Action
Lawsuits, also alleges violations of the Securities Exchange Act of 1934 and
seeks damages and an award of reasonable costs and expenses, including
attorneys' fees. On August 11, 2014, we filed a motion to transfer the purported
securities lawsuit filed in the Mississippi District Court to the California
District Court so it can be consolidated with the purported Class Action
Lawsuits. On November 4, 2014, the Mississippi District Court granted our motion
and transferred the case to the California District Court, and we intend to seek
to consolidate the transferred case with the purported Class Action Lawsuits
filed in the California District Court. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>On April 21, 2014, a
stockholder purporting to act on our behalf filed a derivative lawsuit in the
Superior Court of California for the County of San Mateo against certain of our
officers and directors. The lawsuit alleges breaches of fiduciary duties by the
defendants and other violations of law. In general, the lawsuit alleges that the
defendants caused or allowed the dissemination of allegedly false and misleading
statements related to our Phase 2 trial of imetelstat in patients with ET or PV.
The plaintiff is seeking unspecified monetary damages and other relief,
including reforms and improvements to our corporate governance and internal
procedures. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>It is possible that additional
suits will be filed, or allegations received from stockholders, with respect to
these same or other matters and also naming us and/or our officers and directors
as defendants. These lawsuits and any other related lawsuits are subject to
inherent uncertainties, and the actual defense and disposition costs will depend
upon many unknown factors. The outcome of these lawsuits is necessarily
uncertain. We could be forced to expend significant resources in the defense
against these lawsuits and we may not prevail. In addition, we may incur
substantial legal fees and costs in connection with these lawsuits. We currently
are not able to estimate the possible cost to us from these matters, as these
lawsuits are currently at an early stage, and we cannot be certain how long it
may take to resolve these matters or the possible amount of any damages that we
may be required to pay. We have not established any reserve for any potential
liability relating to these lawsuits. It is possible that we could, in the
future, incur judgments or enter into settlements of claims for monetary
damages. A decision adverse to our interests on these actions could result in
the payment of substantial damages, or possibly fines, and could have a material
adverse effect on our cash flow, results of operations and financial position.
</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We may also be subject
to litigation arising from our proposed or completed strategic transactions or
if the results of our business and collaboration activities are not
successful.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>On October 1, 2013, we closed
the transaction to divest our human embryonic stem cell assets and our
autologous cellular immunotherapy program pursuant to the terms of the
previously disclosed asset contribution agreement, or the Contribution
Agreement, that we entered into in January 2013 with BioTime, Inc., or BioTime,
and BioTime's subsidiary, Asterias Biotherapeutics, Inc., or Asterias (formerly
known as BioTime Acquisition Corporation). On November 13, 2014, we announced
that we had entered into the Collaboration Agreement with Janssen to develop and
commercialize imetelstat worldwide. We may face litigation arising from or
related to the value received by our stockholders, if any, from the Asterias
Series A common stock and/or the warrants to purchase BioTime common stock
distributed by Asterias under the Contribution Agreement, or our role as a named
underwriter with respect to our distribution of the Asterias Series A common
stock, or we may face litigation based on other matters related to the
Contribution Agreement and the Collaboration Agreement or the transactions
contemplated thereby, including the delays we experienced with respect to
completing our distribution of the Asterias Series A common stock or if we are
unable to generate substantial value under the Collaboration Agreement with
Janssen or such collaboration is not otherwise successful.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>9</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>As a result of these and other
factors, we may be exposed to a number of litigation risks related to the
transactions contemplated by the Contribution Agreement and the Collaboration
Agreement, including declines or fluctuations in our stock price, additional
advisor and legal fees, distractions to our management caused by activities
undertaken in connection with resolving any disputes related to the
transactions, or the loss of important contractual rights. As another example,
some of our investors purchased shares of our common stock because they were
interested in the opportunities presented by our human embryonic stem cell
programs. Thus, certain stockholders may have attributed substantial financial
value to our stem cell assets and may believe that the Asterias Series A common
stock, BioTime warrants and/or cash received in the distributions contemplated
by the Contribution Agreement were inadequate consideration for such
assets.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Similarly, the announcement
and/or completion of these strategic transactions could result in litigation
arising out of any claims that our stockholders suffered financial losses due to
the transactions, the approval of our stockholders was required under applicable
law or otherwise should have been obtained prior to the completion of either or
both of these transactions, or that our officers and directors breached their
fiduciary duties in connection with the approval and completion of these
transactions. Although we believe that stockholder approval was not required
under applicable law in order to complete either or both of these transactions
and therefore we neither sought nor intend to seek such stockholder approval, it
is possible that persons who were stockholders at the time of the applicable
transaction may claim that their approval was required, in which case litigation
could follow, which could result in substantial damages to us and/or could
negatively affect our rights and obligations under either of these agreements
or, in the case of the Collaboration Agreement, could result in the termination
of that agreement.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Likewise, our stockholders may
believe that the financial and other terms of the Collaboration Agreement are
not favorable to either us or our stockholders, including any belief that that
the potential payments we may receive under the Collaboration Agreement are
inadequate. Litigation brought by our stockholders challenging the validity of,
or financial losses resulting from, these transactions could also result in
claims against us by Asterias and/or Janssen, and each of the Contribution
Agreement and the Collaboration Agreement provide for indemnification by us of
BioTime and Janssen, respectively, against all losses and expenses relating to
breaches of our representations, warranties and covenants in the applicable
agreement, which could expose us to further financial obligations and damages.
The occurrence of any one or more of the above could have a significant adverse
impact on our business and financial condition.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, if the results of
our business and collaboration activities are not successful, including without
limitation, if: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>we or Janssen are otherwise unable to
  continue development of imetelstat due to actions by regulatory authorities,
  such as the previous full clinical hold that was placed by the FDA on our IND
  for imetelstat in March 2014;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>we, Janssen or any investigators
  ascertain that the use of imetelstat results in significant systemic or organ
  toxicities, including hepatotoxicity, or other safety issues resulting in an
  unacceptable benefit-risk profile;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>the conduct of previous clinical
  trials, such as the MF Pilot Study, and future clinical trials, such as the
  Initial Phase 2 MF Study and the Initial Phase 2 MDS Study planned to be
  conducted under the Collaboration Agreement, results in patient injury or
  death, or any failure to meet regulatory and compliance
  requirements;</FONT></LI></UL>
<P align=center><FONT face="Times New Roman" size=2>10</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>the final or any preliminary results
  from the MF Pilot Study, or any subsequent clinical trial of imetelstat,
  including the Initial Phase 2 MF Study and the Initial Phase 2 MDS Study
  planned to be conducted under the Collaboration Agreement, are not deemed to
  be successful; or<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>Janssen discontinues the further
  development of imetelstat and terminates the Collaboration
  Agreement,</FONT></LI></UL>
<P align=left><FONT face="Times New Roman" size=2>our stock price would likely
decline further, and future litigation may result. A decision adverse to our
interests in any such lawsuits could result in the payment of substantial
damages by us, and could have a material adverse effect on our cash flow,
results of operations and financial position or could otherwise severely harm
our business. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Our business may also bring us
into conflict with our licensees, licensors, or others with whom we have
contractual or other business relationships, or with our competitors or others
whose interests differ from ours. If we are unable to resolve those conflicts on
terms that are satisfactory to all parties, we may become involved in litigation
brought by or against us. For example, we are subject to the risk of possible
disagreements with Janssen, including those regarding the development and/or
commercialization of imetelstat, interpretation of the Collaboration Agreement
and ownership of proprietary rights. As a result of possible disagreements with
Janssen, we also may become involved in litigation or arbitration, which would
be time-consuming and expensive. Monitoring, initiating and defending against
legal actions, including our currently-pending securities-related lawsuits and derivative litigation, are time-consuming for our management, are
likely to be expensive and may detract from our ability to fully focus our
internal resources on our business activities. The outcome of litigation is
always uncertain, and in some cases could include judgments against us that
require us to pay damages, enjoin us from certain activities, or otherwise
negatively affect our legal or contractual rights, which could have a
significant adverse effect on our business. In addition, the inherent
uncertainty of such litigation, including our currently-pending
securities-related lawsuits and derivative litigation, could lead
to increased volatility in our stock price and a decrease in the value of our
stockholders&#146; investment in our common stock. </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>RISKS RELATED TO CLINICAL
AND COMMERCIALIZATION ACTIVITIES</FONT></B><FONT face="Times New Roman" size=2>
</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>The research and
development of imetelstat is subject to numerous risks and
uncertainties.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The science and technology of
telomere biology, telomerase and our proprietary oligonucleotide chemistry are
relatively new. There is no precedent for the successful commercialization of a
therapeutic product candidate based on these technologies. In collaboration with
Janssen, we must undertake significant research and development activities to
develop imetelstat, our sole product candidate, based on these technologies
which may take years to accomplish, if at all. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Because of the significant
scientific, regulatory and commercial challenges that must be overcome for the
research, development and commercialization of imetelstat to be successful, the
development of imetelstat in hematologic myeloid malignancies, including MF and
myelodysplastic syndromes, or MDS, or any other indications, may be delayed or
abandoned, even after significant resources have been expended on it. Our
decisions to discontinue our Phase 2 clinical trial of imetelstat in metastatic
breast cancer in September 2012, and to discontinue our development of
imetelstat in solid tumors with short telomeres in April 2013, are examples of
this. Any further delay or abandonment of the development of imetelstat in
hematologic myeloid malignancies would have a material adverse effect on our
collaboration with Janssen which could result in the termination of the
Collaboration Agreement. Any of these events would likely result in the failure
of our business.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>11</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><I><FONT face="Times New Roman" size=2>Success in early
clinical trials may not be indicative of results in subsequent clinical trials.
Likewise, preliminary data reported by investigators from time-to-time are
subject to review or verification procedures that could result in material
differences to final data and may change as more patient data become available.
</FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>A number of new drugs and
biologics have shown promising results in initial clinical trials, but
subsequently failed to establish sufficient safety and efficacy data to obtain
necessary regulatory approvals. Data obtained from preclinical and clinical
activities are subject to varying interpretations, which may delay, limit or
prevent regulatory approval. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Data from our preclinical
studies and Phase 1 and Phase 2 clinical trials of imetelstat, as well as
preliminary, additional or updated data from the MF Pilot Study, should not be
relied upon as evidence that subsequent or larger-scale clinical trials of
imetelstat will succeed. The positive efficacy results we have obtained from the
patients enrolled in the Phase 2 clinical trial of imetelstat in ET may not
predict the future therapeutic benefit of imetelstat, if any, in other
hematologic myeloid malignancies, including MF. For example, the known LFT
abnormalities and dose-limiting toxicities associated with imetelstat, such as
profound thrombocytopenia and febrile neutropenia and other safety issues,
including death, that have been observed in both Geron-sponsored and
investigator-sponsored trials, including the MF Pilot Study, could cause
complexities in treating patients with MF and could result in the
discontinuation of the MF Pilot Study and any future clinical trials of
imetelstat, including the Initial Phase 2 MF Study and the Initial Phase 2 MDS
Study planned to be conducted under the Collaboration Agreement. Also, the
criteria used to assess efficacy in the MF Pilot Study have not been validated
for clinical use and may not be considered by the FDA or other regulatory
agencies to be accurate predictors of efficacy for different endpoints that may
be required by the FDA or other regulatory agencies for Phase 3 clinical trials.
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, although we have
assumed responsibility as the trial sponsor of the MF Pilot Study, the MF Pilot
Study was initiated by an independent physician investigator and therefore we
will continue to rely on the investigator&#146;s plan and design of the trial. The
preliminary efficacy results of the MF Pilot Study presented by the investigator
at the American Society of Hematology, or ASH, annual meeting in December 2013
were based solely on data from the first two cohorts of the MF Pilot Study,
consisting of 22 patients, and we are currently assessing the recent data and
information we have received from Mayo Clinic upon the transfer of the study to
us in September 2014. These preliminary results were further updated in an
abstract published online by ASH in November 2014 that reported data from 33
patients in the MF Pilot Study. These preliminary results will need to be
confirmed in one or more larger Phase 2 and Phase 3 trials in MF at multiple
treating centers. The results reported by us or by the investigator in the MF
Pilot Study may not be confirmed in any subsequent imetelstat trials conducted
in the future, including the Initial Phase 2 MF Study or the Initial Phase 2 MDS
Study planned to be conducted under the Collaboration Agreement, or by any other
investigator or group of investigators, or in any trial enrolling a larger
number of patients or conducted at multiple treating centers, and thus should
not be relied upon as indicative of future clinical results of imetelstat in MF
or any other hematologic myeloid malignancy. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, from
time-to-time, we may report or announce preliminary data from
current or potential future clinical trials, such as the
Initial Phase 2 MF Study and Initial Phase 2 MDS Study planned to be conducted
under the Collaboration Agreement. For example, we announced our analysis of
preliminary efficacy data from the first two cohorts of the MF Pilot Study in
December 2013. Since those data were preliminary, the final data from the MF
Pilot Study may be materially different than the data we previously reported in
December 2013 or reported in the abstract published online by ASH in November
2014. Since patients previously enrolled in the MF Pilot Study continue to
receive imetelstat, safety and efficacy data continue to be generated, and such
additional and updated data may materially change the overall conclusions from
the preliminary data presented by the investigator at the ASH annual meeting in
December 2013 or in the abstract published online by ASH in November 2014.
Therefore, such preliminary data should be considered carefully and with
caution. Additional and updated data from the MF Pilot Study are also subject to
any review or verification procedures we may conduct as the trial sponsor for
the MF Pilot Study, and since this could result in material differences from the
data reported by the investigator, additional or updated data that may be
reported by the investigator from the MF Pilot Study should be considered
carefully and with caution. For example, we have not independently analyzed the
data selected by the investigator that is contained in the abstract published
online by ASH in November 2014. Our analyses may result in conclusions that are
materially different from the investigator&#146;s analyses and therefore this data
should be considered carefully and with caution.&nbsp;</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>12</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Material adverse changes in
final data from the MF Pilot Study could jeopardize our Collaboration Agreement
with Janssen and if Janssen were to terminate the Collaboration Agreement, our
business prospects would severely and adversely affected. Even if final safety
and efficacy data from the MF Pilot Study are positive, significant additional
clinical testing will be necessary for the future development of imetelstat in
MF. Any such final safety and efficacy data from the MF Pilot Study may not be
reproducible in future clinical trials, including the Initial Phase 2 MF Study
and the Initial Phase 2 MDS Study planned to be conducted under the Collaboration
Agreement. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Before Janssen can seek to
obtain regulatory approval for the commercial sale of imetelstat, multiple
clinical trials, including larger-scale Phase 3 clinical trials, will need to be
conducted to demonstrate that imetelstat is safe and effective for use in a
diverse population. There is typically an extremely high rate of attrition from
the failure of drug candidates proceeding through clinical trials. If imetelstat
cannot be developed in future clinical trials, including Phase 3 clinical
trials, our Collaboration Agreement with Janssen will be negatively impacted and
could be terminated altogether, and our business may fail.</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Conducting and
completing potential future clinical trials of imetelstat, including the Initial
Phase 2 MF Study and the Initial Phase 2 MDS Study planned to be conducted under
the Collaboration Agreement, on a timely basis is subject to risks and
uncertainties.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Delays or terminations of
potential future clinical trials, including the Initial Phase 2 MF Study and the
Initial Phase 2 MDS Study planned to be conducted under the Collaboration
Agreement, could be caused by matters such as: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>not receiving timely regulatory
  clearances or approvals in any jurisdiction, whether within or outside of the
  United States, including, if we, Janssen or future investigators do not obtain
  regulatory clearance to commence studies of imetelstat in MF, MDS or any
  additional hematologic myeloid malignancies in a timely manner or at all,
  including the Initial Phase 2 MF Study and the Initial Phase 2 MDS Study
  planned to be conducted under the Collaboration Agreement;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the inability to maintain our IND for
  imetelstat or the IND that we received from the investigator for the MF Pilot
  Study without such INDs being placed on full or partial clinical hold by the
  FDA either independent of or in connection with our transferring such INDs to
  Janssen;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the inability to properly design,
  conduct and/or complete current and potential future clinical trials of
  imetelstat, including the MF Pilot Study and the Initial Phase 2 MF Study and
  the Initial Phase 2 MDS Study planned to be conducted under the Collaboration
  Agreement;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>data showing lack of effectiveness of
  imetelstat during clinical trials, or results that do not demonstrate
  statistically significant efficacy;</FONT></LI></UL>
<P align=center><FONT face="Times New Roman" size=2>13</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>safety issues, side effects or
  dose-limiting toxicities, including any additional or more severe safety
  issues related to imetelstat in addition to those which have been observed to
  date in Geron-sponsored or investigator-sponsored trials, whether or not in
  the same indications or therapeutic areas;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>disruptions due to drug supply or
  quality issues;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>not receiving acceptance of new
  manufacturing specifications or procedures or clinical trial protocol
  amendments by regulatory authorities;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>failure by investigators conducting
  future clinical trials of imetelstat, including the Initial Phase 2 MF Study
  and the Initial Phase 2 MDS Study planned to be conducted under the
  Collaboration Agreement, to timely commence, enroll, complete or report data
  from such clinical trials;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>not receiving timely institutional
  review board or ethics committee approval of clinical trial protocols or
  protocol amendments;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>delays in patient enrollment due to
  size or nature of patient population, nature of protocols, proximity of
  patients to clinical sites, availability of effective treatments for the
  relevant disease and eligibility criteria for the trial;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>inability to retain patients to
  complete clinical trials or to return for post-treatment
  follow-up;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>difficulty in obtaining or accessing
  necessary clinical data, including additional and future data from the MF
  Pilot Study, which may result in incomplete data sets;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>unavailability of any study-related
  treatment (including comparator therapy);<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>issues or disputes with key vendors of
  clinical services, such as contract research organizations, clinical trial
  sites and laboratory service providers; or<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>governmental or regulatory delays in
  any jurisdiction, whether within or outside of the United States, information
  requests, clinical holds, such as the previous clinical holds placed by the
  FDA on our IND for imetelstat and the IND for the MF Pilot Study, and changes
  in regulatory requirements, policies and guidelines.</FONT></LI></UL>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Advancing clinical development
of imetelstat in the United States is dependent on obtaining positive results
from existing and potential future clinical trials of imetelstat in hematologic
myeloid malignancies, including additional and future data from the MF Pilot
Study and the Initial Phase 2 MF Study and the Initial Phase 2 MDS Study planned
to be conducted under the Collaboration Agreement with Janssen. Obtaining
additional and future data from the MF Pilot Study may provide additional
insights into the further development of imetelstat for MF, MDS or acute
myelogenous leukemia, or AML, including with respect to Janssen&#146;s ability to
initiate the Initial Phase 2 MF Study and the Initial Phase 2 MDS Study planned
to be conducted under the Collaboration Agreement. Accordingly, a delay in the
timely completion of the MF Pilot Study, including any delay caused by any
future clinical hold placed on our IND for imetelstat or the IND for the MF
Pilot Study by the FDA, could have a material adverse effect on advancing the
development of imetelstat to subsequent clinical trials, including the Initial
Phase 2 MF Study and the Initial Phase 2 MDS Study planned to be conducted under
the Collaboration Agreement. Also, adverse safety results from clinical trials
of imetelstat, including those results that have been reported and those that
may in the future be reported from the MF Pilot Study or the Initial Phase 2 MF
Study and the Initial Phase 2 MDS Study planned to be conducted under the
Collaboration Agreement, could delay or prevent the initiation or continuation
of further clinical development of imetelstat, whether under the Collaboration
Agreement or otherwise. Occurrence of any of these events would delay the timing
of any Continuation Decision Janssen could provide to us or could cause Janssen
to terminate the Collaboration Agreement which would severely and adversely
affect the future of imetelstat and our business prospects.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>14</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, enrollment goals
for potential future clinical trials of imetelstat, including the Initial Phase
2 MF Study and the Initial Phase 2 MDS Study planned to be conducted under the
Collaboration Agreement, may not be met. The inability to retain or treat
patients who have enrolled in a clinical trial but may be prone to withdraw due
to side effects from imetelstat, lack of efficacy or personal issues, or who are
lost to further follow-up, could result in clinical trial delays, the inability
to complete clinical trials, or incomplete data sets. Further, any future
clinical trials may be overseen by an internal safety monitoring committee, or
ISMC, and an ISMC may determine to delay or suspend one or more of these trials
due to safety or futility findings based on events occurring during a clinical
trial. Data that we have received or that we or Janssen may in the future
receive from investigators may be flawed or incomplete if the investigators fail
to follow appropriate clinical or quality practices. Delays in timely initiation
or completion of clinical testing of imetelstat could increase research and
development costs and could prevent or would delay obtaining regulatory approval
for imetelstat, either of which would delay the timing of any Continuation
Decision Janssen could provide to us or could cause Janssen to terminate the
Collaboration Agreement which would severely and adversely harm the future of
imetelstat and our business prospects. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Obtaining regulatory
clearances and approvals to develop and market imetelstat in the United States
and other countries is a costly and lengthy process, and we cannot predict
whether or when regulatory authorities will permit additional imetelstat
development or approve imetelstat for commercial sale. </FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Federal, state and local
governments in the United States and governments in other countries have
significant regulations in place that govern drug research and development and
may prevent us, in collaboration with Janssen, from successfully conducting
development efforts or from commercializing imetelstat. Imetelstat must receive
all relevant regulatory approvals before it may be marketed in the United States
or other countries. Obtaining regulatory approval is a lengthy, expensive and
uncertain process. Because imetelstat involves the application of new
technologies and a new therapeutic approach, it may be subject to substantial
additional review by various government regulatory authorities, and, as a
result, the process of obtaining regulatory approvals for imetelstat may proceed
more slowly than for product candidates based upon more conventional
technologies, and any approval that may be received could limit the use of
imetelstat. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Prior to initiating future
clinical trials of imetelstat, including the Initial Phase 2 MF Study and the
Initial Phase 2 MDS Study planned to be conducted under the Collaboration
Agreement, the clinical trial protocols must be submitted to the FDA or
regulatory authorities in other countries. Questions or comments from these
agencies that must be addressed would likely delay further clinical development
of imetelstat and the timing of any Continuation Decision by Janssen, which
could cause Janssen to terminate the Collaboration Agreement and severely and
adversely affect the future of imetelstat and our business prospects.
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Prior to submission of any
regulatory application seeking approval to commence commercial sales of
imetelstat, extensive preclinical and clinical testing will be required to be
conducted. If the interpretation of safety and efficacy data obtained from these
preclinical and clinical studies varies from interpretations by the FDA or
regulatory authorities in other countries, this would likely delay, limit or
prevent further development and approval of imetelstat which may cause Janssen
to terminate the Collaboration Agreement. For example, the FDA and regulatory
authorities in other countries may require more or different data than what has
been generated from our preclinical studies and our prior Geron-sponsored Phase
2 clinical trials, or that has been generated from the MF Pilot Study or may be
generated by potential future clinical trials, including the Initial Phase 2 MF
Study and the Initial Phase 2 MDS Study planned to be conducted under the
Collaboration Agreement. In addition, delays or rejections of regulatory
approvals, or limitations in marketing authorizations, may be encountered as a
result of changes in regulatory environment or regulatory agency policy during
the period of product development and/or the period of review of any application
for regulatory agency approval for imetelstat. We do not expect imetelstat to be
approved for commercial sale for many years, if at all.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>15</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Delays in obtaining regulatory
agency clearances and approvals or limitations in the scope of such clearances
or approvals could: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>significantly harm the commercial
  potential of imetelstat;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>impose costly procedures upon future
  development activities;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>diminish any competitive advantages
  that may have been available; or<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>adversely limit the amount of, or
  affect our ability to receive, any milestone payments or royalties under the
  Collaboration Agreement with Janssen.</FONT></LI></UL>
<P align=left><FONT face="Times New Roman" size=2>Even if the necessary time and
resources are committed by us and Janssen, the required regulatory agency
clearances and approvals may not be obtained for imetelstat. Even if regulatory
agency clearances and approvals are obtained to commence commercial sales of
imetelstat, they may entail limitations on the indicated uses or other aspects
of the product label for which imetelstat can be marketed, which could limit the
potential commercial use of imetelstat, or an approval might be contingent on
the performance of costly additional clinical trials that would be required
after approval. The occurrence of any of these events could delay any
applications for regulatory approval and therefore delay the payment of
potential milestone payments to us, or, if approved for commercial sale, could
reduce the market demand for imetelstat and therefore result in decreased sales
and reduced royalties for us under the Collaboration Agreement. Occurrence of any of these events could negatively
impact our collaboration with Janssen or cause Janssen to terminate the
Collaboration Agreement, which would materially and adversely affect our
business. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Failure to achieve
continued compliance with government regulation could delay or halt
commercialization of imetelstat, our sole product candidate.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Approved products and their
manufacturers are subject to continual review, and discovery of previously
unknown problems with a product or its manufacturer may result in restrictions
on the product or manufacturer, including import restrictions, seizure and
withdrawal of the product from the market. If approved for commercial sale,
future sales of imetelstat will be subject to government regulation related to
numerous matters, including the processes of: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>manufacturing;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>advertising and
  promoting;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>selling and
marketing;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>labeling; and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>distribution.</FONT></LI></UL>
<P align=center><FONT face="Times New Roman" size=2>16</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><FONT face="Times New Roman" size=2>If, and to the extent that, we
are or Janssen is unable to comply with these regulations, our ability to earn
potential royalties from worldwide net sales of imetelstat would be materially
and adversely impacted. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Failure to comply with
regulatory requirements can result in severe civil and criminal penalties,
including but not limited to: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>recall or seizure of
  products;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>injunctions against the import,
  manufacture, distribution, sales and/or marketing of products;
  and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>criminal prosecution.</FONT></LI></UL>
<P align=left><FONT face="Times New Roman" size=2>The imposition of any of these
penalties or other commercial limitations could negatively impact our
collaboration with Janssen or cause Janssen to terminate the Collaboration
Agreement, either of which would materially and adversely affect our business,
financial condition and results of operations. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Janssen&#146;s development
activities conducted under a Janssen</FONT></I></B><FONT face="Times New Roman" size=2> </FONT><B><I><FONT face="Times New Roman" size=2>Independent Development
Plan, or IDP, may create significant reimbursement obligations for us, which
could result in reduced cash inflow from future milestone payments and royalties
until we have fully paid our obligations.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the Collaboration
Agreement, Janssen may conduct certain development activities for imetelstat
under a Janssen IDP if we and Janssen agree that such activities should be
performed outside of the mutually agreed global clinical development plan.
Although Janssen would bear all of the costs for such Janssen IDP, if we
exercised our U.S. Opt-In Rights and if any data from a Janssen IDP supports
approval by a regulatory agency in the United States or other countries, then we
would be required to reimburse Janssen for our share of the costs of that
Janssen IDP plus a small premium pursuant to the terms of the Collaboration
Agreement. This cost reimbursement is payable as a lump sum up to a certain
threshold upon receipt of regulatory approval for the Janssen IDP. Any remaining
amounts in excess of the threshold are payable in installments by offsetting
milestone payments or royalties received by us over a certain period of time at
which time any remaining reimbursement amount would be payable in a lump sum.
This payment mechanism could result in reduced cash inflow from future milestone
payments and royalties, which would adversely affect our results of operations
and financial condition.</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Under the Collaboration
Agreement with Janssen, if we develop imetelstat independently under our own
IDP, then the success of that IDP may depend on providing adequate financial and
technical resources. Failure in successfully conducting or funding our own IDP
activities may adversely affect our business. </FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the Collaboration
Agreement with Janssen, we may conduct certain development activities for
imetelstat under a Geron IDP if we and Janssen agree that such activities should
be performed outside of the mutually agreed global clinical development plan. In
the event we conduct any clinical activities under a Geron IDP, we will be
responsible for paying all of the development costs for the Geron IDP. Because
the outcome of any clinical activities and/or regulatory approval process is
highly uncertain, we cannot reasonably estimate whether any Geron IDP activities
we may undertake will succeed. Since we are only eligible for reimbursement from
Janssen for their share of the Geron IDP costs plus a small premium if any data
from a Geron IDP supports approval by a regulatory agency in the United States
or other countries, we may not recoup our investment in any Geron IDP, which
could adversely affect our financial condition. In addition, we may need
additional capital to support any Geron IDP activities and we cannot assure you
that our existing capital resources, future interest income, potential milestone
payments and royalties under the Collaboration Agreement with Janssen and
potential future sales of our common stock will be sufficient to fund these
future activities. If sufficient capital is not available, we may be unable to
pursue activities under a Geron IDP, which could adversely affect our
business.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>17</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>To execute activities under a
Geron IDP, we likely would be required to collaborate with contract research
organizations, investigators, academic institutions, vendors, clinical trial
sites, scientific consultants and others. We would be dependent upon the ability
of these parties to perform their responsibilities reliably. In addition, we
would have limited control over the activities of these organizations,
investigators, scientific consultants and vendors. Except as otherwise required
by our agreements with them, we could expect only limited amounts of their time
to be dedicated to our activities. If any of these third parties were unable or
refuse to contribute to projects on which we needed their help, our ability to
conduct activities under a Geron IDP could be significantly harmed. Also, if the
performance of these services is not of the highest quality, does not achieve
necessary regulatory compliance standards, or if such organization or vendor
stops or delays its performance for any reason, it would impair and delay our
ability to report data from clinical activities under a Geron IDP which would,
in turn, hinder our ability to make the necessary representations or provide the
necessary information to regulatory authorities, if at all. As a result, we may
not obtain regulatory approval and receive any reimbursement from Janssen for
their share of the costs for the Geron IDP, which could adversely affect our
business and financial condition. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We will be dependent on
Janssen and third parties to manufacture clinical and commercial quantities of
imetelstat, which could result in the delay of clinical trials or regulatory
approval or lost sales.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the Collaboration
Agreement, after a transition period, Janssen will have the responsibility to
manufacture and/or manage the supply of imetelstat for clinical trials and all
commercial activities. Consequently, we will be, and expect to remain, dependent
on Janssen to appropriately supply imetelstat. Janssen may encounter
difficulties in production scale-up, including problems involving production
yields, quality control and quality assurance, and shortage of qualified
personnel. Janssen may not perform as agreed or may default in its obligations
to supply imetelstat for clinical trials and/or commercial activities. Janssen
also may fail to deliver the required quantities of imetelstat on a timely
basis. Any such failure by Janssen could delay future clinical trials and any
applications for regulatory approval and therefore delay the payment of
potential milestone payments to us, or, if approved for commercial sale, could
impair Janssen&#146;s ability to meet the market demand for imetelstat and therefore
result in decreased sales and reduced royalties for us.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Currently, we rely on other
companies for certain process development, supply of starting materials,
manufacturing of drug substance and drug product or other technical and
scientific work with respect to imetelstat, and we do not have direct control
over their personnel or operations. We currently rely on these manufacturers to
produce and deliver sufficient quantities of imetelstat to support clinical
trials on a timely basis and to comply with applicable regulatory requirements.
We intend to transfer certain of the agreements with these third parties to
Janssen, if permitted by the terms and conditions of the respective agreements
or otherwise allowed by the third parties. If these companies do not perform the
work which they are contracted to perform, fail to comply with applicable cGMP
regulations, do not complete the work within the expected timelines, fail to
produce materials which are suitable for use in clinical trials or choose to
exit the business, the ability to develop or manufacture imetelstat could be
significantly harmed. For example, changes to one or more suppliers due to these
or other reasons could lead to delays in drug supply. Manufacturing delays could
adversely impact the initiation or completion of future clinical trials, such as
the Initial Phase 2 MF Study or the Initial Phase 2 MDS Study planned to be
conducted under the Collaboration Agreement, which may cause Janssen to
terminate the Collaboration Agreement or delay the timing of any Continuation
Decision that Janssen could provide to us, either of which would severely and
adversely affect our business prospects. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>18</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, current
third-party manufacturers may need to make substantial investments to enable
sufficient capacity increases and cost reductions, and to implement those
regulatory and compliance standards necessary for successful Phase 3 clinical
trials and commercial production. These manufacturers may not be able to achieve
such capacity increases, cost reductions, or regulatory and compliance
standards, and even if they do, such achievements may not be at commercially
reasonable costs. We have not established long-term manufacturing commitments,
and changing manufacturers may be prolonged and difficult due to inherent
technical complexities and because the number of potential manufacturers is
limited. It may be difficult or impossible for Janssen to find a replacement
manufacturer on acceptable terms, or at all. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>There are other risks and
uncertainties with respect to manufacturing that could adversely impact the
initiation or completion of future clinical trials. For example, one of our
suppliers of active pharmaceutical ingredient for imetelstat is currently
restricted by the FDA from importing materials into the United States. As
another example, certain commonly used reagents and solvents may experience
market shortages and, if these shortages occur, such shortages may adversely
impact the ability to manufacture imetelstat. If a significant issue arises
regarding manufacturing, this may cause Janssen to terminate the Collaboration
Agreement or delay the timing of any Continuation Decision that Janssen could
provide to us, either of which would severely and adversely affect our business
prospects.</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Imetelstat may not be
able to be manufactured at costs or scales necessary to conduct clinical trials
or potential future commercialization activities. </FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Oligonucleotides are
relatively large molecules produced using complex chemistry, and the cost of
manufacturing an oligonucleotide like imetelstat is greater than the cost of
making typical small-molecule drugs. Therefore, imetelstat for clinical use is
more expensive to manufacture than most other treatments currently available
today or that may be available in the future. Similarly, the cost of
manufacturing imetelstat for commercial use will need to be significantly lower
than our current costs in order for imetelstat to become a commercially
successful product. However, Janssen may not be able to achieve sufficient scale
increases or cost reductions necessary for successful commercial production of
imetelstat, which could result in decreased sales and reduced royalties for us.
</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Manufacturing imetelstat
is subject to process and technical challenges and regulatory
risks.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>We have faced and Janssen will
continue to face numerous risks and uncertainties with regard to manufacturing
imetelstat. Regulatory requirements for oligonucleotide products are less
well-defined than for small-molecule drugs, and there is no guarantee that
Janssen will achieve sufficient product quality standards required for Phase 3
clinical trials or for commercial approval and manufacturing of imetelstat.
Changes in the manufacturing processes or formulations for imetelstat that may
be made during later stages of clinical development, including during Phase 3
clinical trials, may result in regulatory delays, the need for further clinical
trials, rejection of a marketing application, or limitation on marketing
authorization by regulatory authorities, and therefore delay the payment of
potential milestone payments to us, or, if approved for commercial sale, could
impair Janssen&#146;s ability to meet the market demand for imetelstat and therefore
result in decreased sales and reduced royalties for us.</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We have not yet
negotiated our agreement with Janssen specifying all of the terms of our U.S.
Co-Promotion Option. In addition, we do not have a sales force and may not
develop an effective one.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Pursuant to the Collaboration
Agreement with Janssen, we have a U.S. Co-Promotion Option if we exercise our
U.S. Opt-In Rights. Assuming we exercise the U.S. Co-Promotion Option, we can
elect to provide 20% of the U.S. imetelstat selling effort with sales force
personnel, in lieu of funding 20% of U.S. promotion costs upon regulatory
approval and commercial launch of imetelstat in the United States. While the
Collaboration Agreement includes the material terms of our U.S. Co-Promotion
Option, we and Janssen mutually agreed to negotiate a separate agreement
specifying the detailed activities and responsibilities in respect of the
marketing and co-promotion of imetelstat following our election to exercise our
U.S. Co-Promotion Option. We will need to negotiate this separate agreement with
Janssen and, as a result, Janssen may place restrictions or additional
obligations on us, including financial obligations. Any restrictions or
additional obligations may restrict our co-promotion activities or involve more
significant financial or other obligations than we currently anticipate. In
addition, we have no sales experience as a company. There are risks involved
with establishing our own sales force capabilities. Developing an internal sales
force and function will require substantial expenditures and will be
time-consuming, may expose us to unforeseen costs and expenses, and we may not
be able to effectively recruit, train or retain sales personnel. Accordingly, we
may be unable to establish our own sales force which could effectively preclude
our ability to take any advantage of participating in co-promoting imetelstat in
the United States. In addition, any sales force we establish may not be
effective, or may be less effective than the any sales force that Janssen
utilizes to promote imetelstat. In such event, the commercialization of
imetelstat may be adversely affected, which could materially and adversely
affect any sales milestone or royalties we may receive under the Collaboration
Agreement.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>19</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><I><FONT face="Times New Roman" size=2>Exercising our U.S.
Co-Promotion Option under the Collaboration Agreement with Janssen may restrict
our future commercialization and/or co-promotion activities.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The Collaboration Agreement
with Janssen prohibits us from using the same sales force to co-promote
imetelstat as we do to promote other products that compete with imetelstat. If
we elect to co-promote imetelstat, we may therefore be required to have a
separate sales force to promote other products we may develop and commercialize
on our own, if any, should any of such products be competitive with imetelstat.
The exercise of our U.S. Co-Promotion Option under the Collaboration Agreement
with Janssen could adversely affect the efficiency and cost of our promotion
efforts for any future products and, effectively, may prohibit us from
exercising other potential co-promotion rights with future collaboration
partners, if any. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>The Collaboration
Agreement limits our ability to transfer our U.S. Co-Promotion Option to a
potential acquirer.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Although the Collaboration
Agreement permits us to be acquired by any company, our right to transfer our
U.S. Co-Promotion Option to a potential acquirer is limited, and subject to
Janssen&#146;s sole discretion under certain circumstances. If we are acquired under
such limited circumstances, then we may not be able to transfer the U.S. Co-Promotion
Option to such acquirer as part of the acquisition. This limiting provision may
discourage potential acquisition bids for us or lower our value thus preventing
holders of our common stock from benefiting from what they may believe are the
positive aspects of an acquisition, including the potential realization of a
higher rate of return on their investment from this type of
transaction.</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Significant disruptions
of information technology systems or breaches of data security could adversely
affect our business.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Our business is increasingly
dependent on critical, complex and interdependent information technology
systems, including Internet-based systems, to support business processes as well
as internal and external communications. The size and complexity of our computer
systems make them potentially vulnerable to breakdown, malicious intrusion and
computer viruses that may result in the impairment of key business
processes.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, our systems are
potentially vulnerable to data security breaches&#151;whether by employees or
others&#151;that may expose sensitive data to unauthorized persons. Such data
security breaches could lead to the loss of trade secrets or other intellectual
property, or could lead to the public exposure of personal information
(including sensitive personal information) of our employees, collaborators,
clinical trial patients, customers and others. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>20</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Such disruptions and breaches
of security could have a material adverse effect on our business, financial
condition and results of operations. </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>RISKS RELATED TO
PROTECTING OUR INTELLECTUAL PROPERTY</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We remain responsible
for prosecuting, at Janssen&#146;s direction, the patents we have licensed to
Janssen. The success of our collaboration with Janssen will depend on our
ability to protect our technologies and imetelstat, through patents and other
intellectual property rights, and our and Janssen&#146;s ability to operate without
infringing the rights of others. </FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Protection of our proprietary
technology is critically important to our business, especially with respect to
our collaboration with Janssen. Our success will depend in part on our ability
to obtain, enforce and extend our patents and maintain trade secrets, both in
the United States and in other countries. If we are unsuccessful in either of
these regards, the value of our technologies and imetelstat will be adversely
affected, and we and/or Janssen may be unable to continue development of
imetelstat. By way of example, we do not yet have issued compound patent
coverage for imetelstat in Europe after 2020. Further, our patents may be
challenged, invalidated or circumvented, and our patent rights may not provide
proprietary protection or competitive advantages to us or Janssen. In the event
that we or our licensors are unsuccessful in obtaining and enforcing patents, we
or Janssen may not be able to further develop or commercialize imetelstat, any
of which could delay future clinical trials and any applications for regulatory
approval and therefore delay the payment of potential milestone payments to us,
or, if imetelstat is approved for commercial sale, could impair Janssen&#146;s
ability to sell imetelstat and therefore result in decreased sales and reduced
royalties for us. Occurrence of any of these events could negatively impact our
collaboration with Janssen or cause Janssen to terminate the Collaboration
Agreement, which would materially and adversely affect our business, and we may
be unable to continue our operations. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Publication of discoveries in
scientific or patent literature tends to lag behind actual discoveries by at
least several months and sometimes several years. Therefore, the persons or
entities that we or our licensors name as inventors in our patents and patent
applications may not have been the first to invent the inventions disclosed in
the patent applications or patents, or the first to file patent applications for
these inventions. As a result, we may not be able to obtain patents for
discoveries that we otherwise would consider patentable and that we consider to
be extremely significant to the future success of imetelstat. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The patent positions of
pharmaceutical and biopharmaceutical companies, including ours, are highly
uncertain and involve complex legal and technical questions. In particular,
legal principles for biotechnology and pharmaceutical patents in the United
States and in other countries are evolving, and the extent to which we will be
able to obtain patent coverage to protect our technologies and imetelstat, or
enforce issued patents, is uncertain. If we or Janssen infringe the patents of
others, we or Janssen may be blocked from continuing development work or be
required to obtain licenses on terms that may impact the value of imetelstat or
cause it to be commercially impracticable. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, on September 16,
2011, the Leahy-Smith America Invents Act, or the AIA, was signed into law. The
AIA includes a number of significant changes to U.S. patent law. These include
provisions that affect the way patent applications will be prosecuted and may
affect patent litigation. The United States Patent and Trademark Office, or the
Patent Office, has developed new and untested regulations and procedures to
govern the full implementation of the AIA. Many of the substantive changes to
patent law associated with the AIA, and in particular, the first to file
provisions, became effective on March 16, 2013. For example, under the AIA,
patent rights are awarded to the first inventor to file a patent application
with respect to a particular invention. Thus, our ability to protect our
patentable intellectual property depends, in part, on our ability to be the
first to file patent applications with respect to our inventions or joint
inventions with Janssen. Delay in the filing of a patent application for any
purpose, including further development
or refinement of an invention, may result in the risk of loss of patent rights.
The AIA and its implementation could increase the uncertainties and costs
surrounding the prosecution of our patent applications and the enforcement or
defense of our issued patents. Occurrence of these events could significantly
impair our imetelstat patent rights which would have a material adverse effect
on our business and could cause Janssen to terminate the Collaboration
Agreement. </FONT></P>

<P align=center><FONT face="Times New Roman" size=2>21</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The U.S. Supreme Court, or the
Court, has also issued decisions affecting patents. On June 13, 2013, in
</FONT><I><FONT face="Times New Roman" size=2>Association for Molecular
Pathology v. Myriad Genetics, Inc.</FONT></I><FONT face="Times New Roman" size=2> the Court held that claims to isolated genomic DNA were not patentable
subject matter, but claims to complementary DNA (cDNA) molecules were patentable
subject matter. The effect of the decision on patents for other isolated natural
products is uncertain. On March 20, 2012, in </FONT><I><FONT face="Times New Roman" size=2>Mayo Collaborative Services, DBA Mayo Medical
Laboratories, et al. v. Prometheus Laboratories, Inc.</FONT></I><FONT face="Times New Roman" size=2>, the Court held that several claims drawn to
measuring drug metabolite levels from patient samples and correlating them to
drug doses were not patentable subject matter. The decision has created
uncertainty around the ability to patent certain biomarker-related method
patents. These decisions have increased the uncertainty with regard to our
ability to obtain patents in the future as well as the value of current and
future patents, once obtained. Depending on decisions by the U.S. federal courts
and the Patent Office, the interpretation of laws and regulations governing
patents could change in unpredictable ways that would weaken our ability to
obtain new patents or to enforce our existing patents. Occurrence of these
events could significantly impair our imetelstat patent rights which would have
a material adverse effect on our business and could cause Janssen to terminate
the Collaboration Agreement. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Challenges to our patent
rights can result in costly and time-consuming legal proceedings that may
prevent or limit development of imetelstat. </FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Our patents may be challenged
through administrative or judicial proceedings. Such proceedings are typically
lengthy and complex, and an adverse decision can result in the loss of important
patent rights. For example, where more than one party seeks U.S. patent
protection for the same technology, the Patent Office may declare an
interference proceeding in order to ascertain the party to which the patent
should be issued. Patent interferences are typically complex, highly contested
legal proceedings, subject to appeal. They are usually expensive and prolonged,
and can cause significant delay in the issuance of patents. Our pending patent
applications, or our issued patents, may be drawn into interference proceedings
or be challenged through post-grant review procedures, which may delay or
prevent the issuance of patents, or result in the loss of issued patent rights.
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under the AIA, interference
proceedings have been eliminated for patent applications filed on or after March
16, 2013, and have been replaced with other types of proceedings, including
derivation proceedings. The AIA also includes post-grant review procedures
subjecting U.S. patents to post-grant review procedures similar to European
oppositions. U.S. patents owned or licensed by us may therefore be subject to
post-grant review procedures, as well as other forms of review and
re-examination. A decision in such proceedings adverse to our interests could
result in the loss of valuable patent rights which would have a material adverse
effect on our business and could cause Janssen to terminate the Collaboration
Agreement. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Certain jurisdictions, such as
Europe, New Zealand and Australia, permit oppositions to be filed against
granted patents or patents proposed to be granted. Under the Collaboration
Agreement, Janssen could commercialize imetelstat internationally if approved by
regulatory authorities for commercial sale. Therefore, securing both proprietary
protection and freedom to operate outside of the United States is important to
the Collaboration Agreement with Janssen and our business. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>We have been involved in both
opposing the grant of patents to others through such opposition proceedings and
in defending our patent applications against oppositions filed by others. These
opposition </FONT><FONT size=2 face="Times New Roman">proceedings required significant time and costs
to protect our intellectual property rights. If we are unable to commit these
types of resources for our imetelstat patent rights, we and/or Janssen could be
prevented or limited in the development and commercialization of imetelstat.
Occurrence of any of these events could negatively impact our collaboration with
Janssen or cause Janssen to terminate the Collaboration Agreement which would
severely and adversely affect our business prospects.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>22</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>As more groups become engaged
in scientific research and product development in the areas of telomerase
biology, the risk of our patents, or patents that we have in-licensed, being
challenged through patent interferences, derivation proceedings, oppositions,
re-examinations, litigation or other means will likely increase. Challenges to
our patents through these procedures can be extremely expensive and
time-consuming, even if the outcome is favorable to us. An adverse outcome in a
patent dispute could severely harm our collaboration with Janssen or cause
Janssen to terminate the Collaboration Agreement, or could otherwise have a
material adverse effect on our business by: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>causing us to lose patent rights in
  the relevant jurisdiction(s);<BR>&nbsp;</FONT>

  </LI><LI STYLE="text-align: left"><FONT face="Times New Roman" size=2>subjecting us to litigation, or
  otherwise preventing Janssen or us from commercializing imetelstat in the relevant
  jurisdiction(s);<BR>&nbsp;</FONT>

  </LI><LI><FONT face="Times New Roman" size=2>requiring Janssen or us to obtain
  licenses to the disputed patents;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>forcing Janssen or us to cease using
  the disputed technology; or<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>requiring Janssen or us to develop or
  obtain alternative technologies.</FONT></LI></UL>
<P align=left><B><I><FONT face="Times New Roman" size=2>We or Janssen may be
subject to infringement claims that are costly to defend, and as to which we may
be obligated to indemnify or obtain unblocking licenses, and such claims may
limit our or Janssen&#146;s ability to use disputed technologies and prevent us or
Janssen from pursuing research and development or commercialization of
imetelstat. </FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The commercial success of
imetelstat will depend upon our and Janssen&#146;s ability to develop, manufacture,
market and sell imetelstat without infringing or otherwise violating the
intellectual property and other proprietary rights of third parties. There is
considerable intellectual property litigation in the biotechnology and
pharmaceutical industries, and many pharmaceutical companies, including
potential competitors, have substantial patent portfolios. For example, we are
aware that certain third parties have or may be prosecuting patents and patent
estates that may relate to imetelstat, and while we believe these patents will
expire before imetelstat is commercialized and/or that these patents are invalid
and/or would not be infringed by the manufacture, use or sale of imetelstat, it
is possible that the owner(s) of these patents will assert claims against us
and/or Janssen in the future. Under the Collaboration Agreement, we are
obligated under certain circumstances to indemnify Janssen from any claim of
infringement of the patent rights of third parties in Janssen&#146;s development,
manufacture or commercialization of imetelstat, or to obtain unblocking licenses
from such third parties, at our cost. In addition, we may not be aware of all
intellectual property rights potentially relating to imetelstat and its uses.
Thus, we do not know with certainty that imetelstat, or the intended
commercialization thereof, does not and will not infringe or otherwise violate
any third party&#146;s intellectual property. Any infringement claims against us or
Janssen would likely be expensive to resolve, and the cost of any
indemnification of Janssen or unblocking license that we could be required to
obtain under the Collaboration Agreement is unpredictable and could be
significant. If we or Janssen are unable to resolve an infringement claim
successfully, we or Janssen could be subject to an injunction which would
prevent us or Janssen from commercializing imetelstat, and could also require us
or Janssen to pay substantial damages. In addition to infringement claims, in
the future we or Janssen may also be subject to other claims relating to
intellectual property, such as claims that we or Janssen have misappropriated
the trade secrets of third parties. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>23</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, we or Janssen may
become aware of discoveries and technologies controlled by third parties that
are advantageous to developing or manufacturing imetelstat. In the event our
technologies infringe the rights of others or require the use of discoveries and
technologies controlled by third parties, we or Janssen may be prevented from
pursuing research, development, manufacturing or commercialization of
imetelstat, or may be required to obtain licenses to those patents or other
proprietary rights or develop or obtain alternative technologies. Under the
Collaboration Agreement, we are obligated under certain circumstances to
indemnify Janssen from any claim of infringement of the patent rights of third
parties in Janssen&#146;s development, manufacture or commercialization of
imetelstat, or to obtain unblocking licenses from such third parties, at our
cost. Under such circumstances, we may initiate negotiations for licenses to
other technologies as the need or opportunity arises. We, or Janssen, may not be
able to obtain a license to a technology required for the research, development,
manufacturing or commercialization of imetelstat on commercially favorable
terms, or at all, or our licenses may be terminated on certain grounds,
including as a result of our failure to comply with our obligations under such
licenses. If we or Janssen do not obtain a necessary license or if such a
license is terminated, we or Janssen may need to redesign our technologies or
obtain rights to alternate technologies, which may not be possible, and even if
possible, could cause delays in the development efforts for imetelstat. In cases
where we or Janssen are unable to license necessary technologies, we and/or
Janssen could be subject to litigation and prevented from developing imetelstat,
and in certain circumstances we may be required to indemnify Janssen for
infringement claims arising from Janssen&#146;s development, manufacture or
commercialization of imetelstat, which could materially and adversely impact our
business. Failure by us or Janssen to obtain alternative technologies or a
license to any technology that may be required to research, develop, manufacture
or commercialize imetelstat would delay future clinical trials and any
applications for regulatory approval and therefore delay the payment of
potential milestone payments to us, or, if imetelstat is approved for commercial
sale, could impair Janssen&#146;s ability to sell imetelstat and therefore result in
decreased sales and reduced royalties for us. Occurrence of any of these events
could negatively impact our collaboration with Janssen or cause Janssen to
terminate the Collaboration Agreement which would materially and adversely
affect our business, and we may be unable to continue our operations. We expect
that as imetelstat continues to progress in development, we will see more
efforts by others to obtain patents that are positioned to cover imetelstat. Our
success therefore depends significantly on our and Janssen&#146;s ability to operate
without infringing patents and the proprietary rights of others. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We may become involved
in disputes with Janssen or any past or future collaborator(s) over intellectual
property inventorship or ownership, and publications by our investigators,
scientific consultants and research collaborators could impair our ability to
obtain patent protection or protect our proprietary information, which, in
either case, could have a significant impact on our business.</FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Inventions discovered under
research, material transfer or other such collaborative agreements, including
our Collaboration Agreement with Janssen, may become jointly owned by us and the
other party to such agreements in some cases and the exclusive property of
either party in other cases. Under some circumstances, it may be difficult to
determine who invents and owns a particular invention, or whether it is jointly
owned, and disputes could arise regarding inventorship and ownership of those
inventions. These disputes could be costly and time consuming and an unfavorable
outcome could have a significant adverse effect on our business if we were not
able to protect or license rights to these inventions. In addition, clinical
trial investigators, scientific consultants and research collaborators generally
have contractual rights to publish data and other proprietary information,
subject to review by us and/or Janssen. Publications by investigators, scientific
consultants and research collaborators containing such information, either with
permission or in contravention of the terms of their agreements, may
impair the ability to obtain patent protection or protect proprietary
information which would have a material adverse effect on our business and could
cause Janssen to terminate the Collaboration Agreement.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>24</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><I><FONT face="Times New Roman" size=2>Much of the information
and know-how that is critical to our business is not patentable, and we may not
be able to prevent others from obtaining this information and establishing
competitive enterprises.</FONT></I></B><FONT face="Times New Roman" size=2>
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>We sometimes rely on trade
secrets to protect our proprietary technology, especially in circumstances in
which we believe patent protection is not appropriate or available. We attempt
to protect our proprietary technology in part by confidentiality agreements with
our employees, consultants, collaborators and contractors. We cannot provide
assurance that these agreements will not be breached, that we would have
adequate remedies for any breach, or that our trade secrets will not otherwise
become known or be independently discovered by competitors, any of which would
harm our business significantly. </FONT></P>
<P align=center><B><FONT face="Times New Roman" size=2>RISKS RELATED TO OUR
FINANCIAL POSITION AND NEED FOR ADDITIONAL FINANCING</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We have a history of
losses and anticipate continued future losses, and our continued losses could
impair our ability to sustain operations. </FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>We have incurred operating
losses every year since our operations began in 1990. As of September 30, 2014,
our accumulated deficit was approximately $919.5 million. Losses have resulted
principally from costs incurred in connection with our research and development
activities and from general and administrative costs associated with our
operations. We expect to incur additional operating losses and, as clinical
development activities continue under our Collaboration Agreement with Janssen,
our operating losses may increase in size. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Substantially all of our
revenues to date have been research support payments under collaborative
agreements and milestones, royalties and other revenues from our licensing
arrangements. Any revenues generated from ongoing collaborative agreements and
revenues from our licensing arrangements, including the Collaboration Agreement
with Janssen, may not be sufficient alone to sustain our operations. In
addition, there can be no assurance that we will receive the initial $35 million
payment or any milestone payments or royalties from Janssen in the future. We
may be unsuccessful in entering into any new corporate collaboration,
partnership or license agreements that result in revenues, or existing
collaborative agreements or license arrangements, such as the Collaboration
Agreement with Janssen, may be terminated or expire. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>We also expect to experience
negative cash flow for the foreseeable future as we fund our operating losses
and capital expenditures. This will result in decreases in our working capital,
total assets and stockholders&#146; equity, which may not be offset by milestone
payments or royalties from Janssen or by future financings. We will need to
generate significant revenues to achieve profitability. We may not be able to
generate these revenues from the Collaboration Agreement with Janssen through
milestone payments or royalties, and we may never achieve profitability. Our
failure to achieve profitability could negatively impact the market price of our
common stock and our ability to sustain operations. Even if we do become
profitable, we may not be able to sustain or increase profitability on a
quarterly or annual basis. </FONT></P>


<P align=center><FONT face="Times New Roman" size=2>25</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>

<P align=left><B><I><FONT face="Times New Roman" size=2>We may require
additional capital to support development and commercialization of imetelstat in
collaboration with Janssen and to otherwise grow our business, and our ability
to obtain the necessary funding is uncertain. </FONT></I></B></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>We may need additional capital
resources in order to support development and commercialization of imetelstat,
especially if we elect to exercise our U.S. Opt-In Rights under the
Collaboration Agreement and potentially independently pursue imetelstat
development under our own IDP, and to otherwise support the future growth of our business, and we
cannot assure you that our existing capital resources, future interest income,
potential milestone payments and royalties under the Collaboration Agreement
with Janssen and potential future sales of our common stock, including pursuant
to our At-The-Market Issuance Sales Agreement, or sales agreement, with MLV
&amp; Co. LLC, or MLV, will be sufficient to fund future planned activities. The
timing and degree of any future capital requirements will depend on many
factors, including: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>the accuracy of the assumptions
  underlying our estimates for our capital needs;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>whether we elect U.S. Opt-In Rights to
  share future U.S. development and promotion costs for</FONT> <FONT face="Times New Roman" size=2>imetelstat under the Collaboration Agreement
  with Janssen;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>to the extent permitted under the
  Collaboration Agreement, whether we independently pursue</FONT> <FONT face="Times New Roman" size=2>imetelstat development under our own IDP;</FONT>
  <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>our potential reimbursement
  obligations to Janssen if any data from a Janssen IDP support</FONT> <FONT face="Times New Roman" size=2>approval by a regulatory agency in the United
  States or other countries;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>the achievement of development,
  regulatory and commercial milestones resulting in the payment</FONT> <FONT face="Times New Roman" size=2>to us from Janssen under the Collaboration
  Agreement and the timing of receipt of such payments,</FONT> <FONT face="Times New Roman" size=2>if any;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>changes or delays in our and Janssen&#146;s
  development plans for imetelstat, including changes which</FONT> <FONT face="Times New Roman" size=2>may result from any future clinical holds on our
  IND for imetelstat or the IND that we received</FONT> <FONT face="Times New Roman" size=2>from the investigator for the MF Pilot Study,
  both of which we expect to transfer to Janssen;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>Janssen&#146;s ability to meaningfully
  reduce manufacturing costs of imetelstat;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>the progress, timing, magnitude, scope
  and costs of clinical development, manufacturing and</FONT> <FONT face="Times New Roman" size=2>commercialization for imetelstat, including the
  number of indications being pursued, subject to</FONT> <FONT face="Times New Roman" size=2>permission from the FDA;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>the time and costs involved in
  obtaining regulatory clearances and approvals in the United States</FONT>
  <FONT face="Times New Roman" size=2>and in other countries;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>Janssen&#146;s ability to successfully
  market and sell imetelstat, upon regulatory approval or clearance,</FONT>
  <FONT face="Times New Roman" size=2>in the United States and other
  countries;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>our decision to exercise our U.S.
  Co-Promotion Option, including the costs and timing of building</FONT> <FONT face="Times New Roman" size=2>a U.S. sales force;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>the timing, receipt and amount of
  royalties under the Collaboration Agreement on worldwide net</FONT> <FONT face="Times New Roman" size=2>sales of imetelstat, upon regulatory approval or
  clearance, if any;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>the sales price and availability of
  adequate third-party reimbursement for imetelstat;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>the cost of acquiring and/or licensing
  any new product candidates, if any;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>expenses associated with the pending
  and potential additional related purported securities lawsuits</FONT> <FONT face="Times New Roman" size=2>and derivative lawsuits, as well as any other
  litigation; and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the costs involved in preparing,
  filing, prosecuting, maintaining, defending and enforcing patent</FONT> <FONT face="Times New Roman" size=2>claims.</FONT></LI></UL>
<P align=center><FONT face="Times New Roman" size=2>26</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, changes in our
business may occur that would consume available capital resources sooner than we
expect. If our existing capital resources, future interest income, and potential
milestone payments and royalties under the Collaboration Agreement with Janssen
are insufficient to meet future capital requirements, we will need to raise
additional capital to fund our operations. Further, in the event the
Collaboration Agreement does not become effective or if the Collaboration
Agreement is otherwise terminated, including as a result of Janssen&#146;s failure
to provide a Continuation Decision to us, we would not receive any milestone
payments or royalties under the Collaboration Agreement, and we would be
required to fund all clinical development, manufacturing and commercial
activities for imetelstat ourselves, which would require us to raise additional
capital or establish alternative collaborations with third-party collaboration
partners, which may not be possible. Additional financing through public or
private equity financings, including pursuant to our sales agreement with MLV,
capital lease transactions or other financing sources may not be available on
acceptable terms, or at all. We may raise equity capital at a stock price or on
other terms that could result in substantial dilution of ownership for our
stockholders. The receptivity of the public and private equity markets to
proposed financings is substantially affected by the general economic, market
and political climate and by other factors which are unpredictable and over
which we have no control.</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Our ability to raise
additional funds will be severely impaired in the event of: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>any future clinical holds on any IND
  for imetelstat;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>failure to show adequate safety or
  efficacy of imetelstat in existing or potential future clinical</FONT> <FONT face="Times New Roman" size=2>trials; or</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>a termination of the Collaboration
  Agreement or our collaboration with Janssen is otherwise</FONT> <FONT face="Times New Roman" size=2>unsuccessful.</FONT></LI></UL>
<P ALIGN="LEFT"><FONT face="Times New Roman" size=2>If sufficient capital is not
available, we may be unable to fulfill our funding obligations under the
Collaboration Agreement with Janssen resulting in our breach of the
Collaboration Agreement which could lead to Janssen paying lower milestone
payments and lower royalties to us under a reduced royalty tier which could have
a material adverse effect on our results of operations and financial condition.
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Moreover, assuming the
Collaboration Agreement with Janssen becomes effective, we plan to diversify our
sole product candidate development risk by identifying and seeking to acquire or
in-license new product opportunities for development. Acquisition or
in-licensing opportunities that we may pursue could materially affect our
liquidity and capital resources and may require us to incur indebtedness, seek
equity capital or both. In addition, there can be no assurance that
sufficient additional capital would be available to us in order to pursue any of
these opportunities.</FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Our ability to use our
net operating loss carryforwards and certain other tax attributes may be
limited.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Under Section 382 of the
Internal Revenue Code of 1986, as amended, or the Code, if a corporation
undergoes an &#147;ownership change,&#148; generally defined as a greater than 50% change
(by value) in its equity ownership over a three-year period, the corporation&#146;s
ability to use its pre-change net operating loss carryforwards and other
pre-change tax attributes (such as research tax credits) to offset its
post-change taxable income or taxes may be limited. Changes in our stock
ownership, some of which are outside of our control, may have resulted or could
in the future result in an ownership change. If a limitation were to apply,
utilization of a portion of our domestic net operating loss and tax credit
carryforwards could be limited in future periods. In addition, a portion of the
carryforwards may expire before being available to </FONT><FONT face="Times New Roman" size=2>reduce future income tax liabilities. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>27</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>RISKS RELATED TO OUR
COMMON STOCK AND FINANCIAL REPORTING</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Historically, our stock
price has been extremely volatile. </FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Historically, our stock price
has been extremely volatile. Between October 1, 2004 and September 30, 2014, our
stock has traded as high as $12.18 per share and as low as $0.91 per share.
Between October 1, 2011 and September 30, 2014, the price has ranged between a
high of $7.79 per share and a low of $0.91 per share. The significant market
price fluctuations of our common stock have been due to and may in the future be
influenced by a variety of factors, including: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>not receiving timely regulatory
  clearances or approvals in any jurisdiction, whether within or</FONT> <FONT face="Times New Roman" size=2>outside of the United States, including, if we,
  Janssen or future investigators do not obtain</FONT> <FONT face="Times New Roman" size=2>regulatory clearance to commence studies of
  imetelstat in MF, MDS or any additional hematologic</FONT> <FONT face="Times New Roman" size=2>myeloid malignancies in a timely manner or at
  all, including the Initial Phase 2 MF Study and the</FONT> <FONT face="Times New Roman" size=2>Initial Phase 2 MDS Study planned to be
  conducted under the Collaboration Agreement;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>developments in our collaboration with
  Janssen, including the termination or modification of the</FONT> <FONT face="Times New Roman" size=2>Collaboration Agreement or disputes regarding
  the collaboration, or if the Collaboration</FONT> <FONT face="Times New Roman" size=2>Agreement fails to become effective;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>announcements regarding the research
  and development of imetelstat, including clinical trial</FONT> <FONT face="Times New Roman" size=2>results or delays in any future clinical trials
  of imetelstat, or announcements regarding the results</FONT> <FONT face="Times New Roman" size=2>of or delays in clinical trials of imetelstat,
  and investor perceptions thereof;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>announcements regarding the safety of
  imetelstat, including announcements similar to our</FONT> <FONT face="Times New Roman" size=2>March 2014 announcements that the FDA had placed
  a full clinical hold on our IND for imetelstat</FONT> <FONT face="Times New Roman" size=2>and a partial clinical hold on the
  investigator&#146;s IND for the MF Pilot Study due to safety concerns;</FONT>
<BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>announcements regarding our plans to
  discontinue certain programs or clinical trials, such as our</FONT> <FONT face="Times New Roman" size=2>prior announcements regarding the
  discontinuation of our stem cell programs and certain clinical</FONT> <FONT face="Times New Roman" size=2>trials;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>perception by our stockholders about    the adequacy of the consideration received for
           the divestiture</FONT> <FONT face="Times New Roman" size=2>of our stem cell assets to Asterias or potential payments
           we may receive under the Collaboration Agreement;</FONT>            <BR>&nbsp;   </LI><LI><FONT face="Times New Roman" size=2>the demand in the market for our
  common stock;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>the experimental nature of
  imetelstat;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>fluctuations in our operating
  results;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>our declining cash balance as a result
  of operating losses;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>general market conditions or market
  conditions relating to the biopharmaceutical and</FONT> <FONT face="Times New Roman" size=2>pharmaceutical industries;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>announcements of technological
  innovations, new commercial products, or clinical progress or</FONT> <FONT face="Times New Roman" size=2>lack thereof by us, our collaborators,
  licensees, partners or our competitors;</FONT></LI></UL>
<P align=center><FONT face="Times New Roman" size=2>28</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>announcements concerning regulatory
  developments and proprietary rights;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>comments by securities
  analysts;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>large stockholders exiting their
  position in our common stock;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>announcements of or developments
  concerning pending and/or potential future litigation;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the issuance of common stock to
  partners, vendors or investors to raise additional capital;
  and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the occurrence of any other risks and
  uncertainties discussed under the heading &#147;Risk Factors.&#148;</FONT></LI></UL>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Stock prices and trading
volumes for many biopharmaceutical companies fluctuate widely for a number of
reasons, including factors which may be unrelated to their businesses or results
of operations, such as media coverage, legislative and regulatory measures and
the activities of various interest groups or organizations. In addition to other
risk factors described in this section, overall market volatility, as well as
general domestic or international economic, market and political conditions,
could materially and adversely affect the market price of our common stock and
the return on your investment. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>If we fail to meet
continued listing standards of NASDAQ, our common stock may be delisted, which
could have a material adverse effect on the liquidity of our common
stock.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Our common stock is currently
traded on the Nasdaq Global Select Market. The NASDAQ Stock Market LLC has
requirements that a company must meet in order to remain listed on NASDAQ. In
particular, NASDAQ rules require us to maintain a minimum bid price of $1.00 per
share of our common stock. If the closing bid price of our common stock were to
fall below $1.00 per share for 30 consecutive trading days or we do not meet
other listing requirements, we would fail to be in compliance with NASDAQ&#146;s
listing standards. There can be no assurance that we will continue to meet the
minimum bid price requirement, or any other requirement in the future. If we
fail to meet the minimum bid price requirement, The NASDAQ Stock Market LLC may
initiate the delisting process with a notification letter. If we were to receive
such a notification, we would be afforded a grace period of 180 calendar days to
regain compliance with the minimum bid price requirement. In order to regain
compliance, shares of our common stock would need to maintain a minimum closing
bid price of at least $1.00 per share for a minimum of 10 consecutive trading
days. If our common stock were to be delisted, the liquidity of our common stock
would be adversely affected and the market price of our common stock could
decrease. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>The sale of a
substantial number of shares may adversely affect the market price of our common
stock.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The sale of a substantial
number of shares of our common stock in the public market, or the perception
that such sales could occur, could significantly and negatively affect the
market price of our common stock. As of September 30, 2014, we had 300,000,000
shares of common stock authorized for issuance and 156,934,133 shares of common
stock outstanding. In addition, we had reserved 33,354,582 shares of our common
stock for future issuance pursuant to our option and equity incentive plans and
outstanding warrants as of September 30, 2014. Issuing additional shares could
negatively affect the market price of our common stock and the return on your
investment. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Future sales of our common
stock, including pursuant to our sales agreement with MLV, or the issuance of
common stock to satisfy our current or future cash payment obligations or to
acquire technology, property, or other businesses, could cause immediate
dilution and adversely affect the market price of our common stock. In addition,
under the universal shelf registration statement filed by us in July 2012 and
declared effective by the SEC in October 2012, we may sell any combination of
common </FONT><FONT face="Times New Roman" size=2>stock, preferred stock, debt
securities and warrants in one or more offerings, up to a cumulative value of
$96.5 million. The sale or issuance of our securities, as well as the existence
of outstanding options and shares of common stock reserved for issuance under
our option and equity incentive plans and outstanding warrants also may
adversely affect the terms upon which we are able to obtain additional capital
through the sale of equity securities, which could negatively affect the market
price of our common stock and the return on your investment. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>29</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><I><FONT face="Times New Roman" size=2>Our undesignated
preferred stock may inhibit potential acquisition bids; this may adversely
affect the market price of our common stock and the voting rights of holders of
our common stock.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Our certificate of
incorporation provides our board of directors with the authority to issue up to
3,000,000 shares of undesignated preferred stock and to determine or alter the
rights, preferences, privileges and restrictions granted to or imported upon
these shares without further vote or action by our stockholders. The issuance of
shares of preferred stock may delay or prevent a change in control transaction
without further action by our stockholders. As a result, the market price of our
common stock may be adversely affected. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, if in the future,
we issue preferred stock that has preference over our common stock with respect
to the payment of dividends or upon our liquidation, dissolution or winding up,
or if we issue preferred stock with voting rights that dilute the voting power
of our common stock, the rights of holders of our common stock or the market
price of our common stock could be adversely affected. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Provisions in our
charter, bylaws and Delaware law may inhibit potential acquisition bids for us,
which may prevent holders of our common stock from benefiting from what they
believe may be the positive aspects of acquisitions and
takeovers.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Provisions of our charter
documents and bylaws may make it substantially more difficult for a third party
to acquire control of us and may prevent changes in our management, including
provisions that: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>prevent stockholders from taking
  actions by written consent;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>divide the board of directors into
  separate classes with terms of office that are structured to prevent</FONT>
  <FONT face="Times New Roman" size=2>all of the directors from being elected in
  any one year; and</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>set forth procedures for nominating
  directors and submitting proposals for consideration at</FONT> <FONT face="Times New Roman" size=2>stockholders&#146; meetings.</FONT></LI></UL>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Provisions of Delaware law may
also inhibit potential acquisition bids for us or prevent us from engaging in
business combinations. In addition, we have severance agreements with several
employees and a company-wide severance plan, either of which could require a
potential acquirer to pay a higher price. Either collectively or individually,
these provisions may prevent holders of our common stock from benefiting from
what they may believe are the positive aspects of acquisitions and takeovers,
including the potential realization of a higher rate of return on their
investment from these types of transactions. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We do not intend to pay
cash dividends on our common stock in the foreseeable
future.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>We do not anticipate paying
cash dividends on our common stock in the foreseeable future. Any payment of
cash dividends will depend upon our financial condition, results of operations,
capital requirements and other factors and will be at the discretion of our
board of directors. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>30</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=left><B><I><FONT face="Times New Roman" size=2>Our stockholders may
incur U.S. federal income taxes as a result of the Series A Distribution, and
non-U.S. stockholders may be subject to withholding taxes with respect to the
Series A Distribution.</FONT></I></B><FONT face="Times New Roman" size=2>
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The Series A Distribution does
not qualify as a tax-free spin-off under Section 355 of the Code. Accordingly,
the fair market value of the Asterias Series A common stock at the time of the
Series A Distribution and the amount of cash that was distributed could be
treated as dividend income for U.S. federal income tax purposes for Geron
stockholders who received shares of Asterias Series A common stock, or cash in
lieu thereof, in the Series A Distribution to the extent made out of our current
or accumulated earnings and profits (as determined under U.S. federal income tax
principles), if any. Because the amount of our 2014 current earnings and
profits, if any, cannot be known before the end of 2014 and because we have not
performed a formal study of our accumulated earnings and profits as of the end
of 2013, we can provide no assurance that the Series A Distribution will not
result in any dividend income to Geron stockholders who received shares of
Asterias Series A common stock, or cash in lieu thereof, in the Series A
Distribution. Similarly, we can provide no assurance that the distribution of
BioTime Warrants by Asterias will not result in dividend income. Any gain
recognized by a Geron stockholder from the Series A Distribution or the
distribution of the BioTime Warrants will be short-term capital gain if the
Geron stockholder has held our stock or, as applicable, the Asterias Series A
common stock for one year or less at the time of the relevant distribution.
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>If any dividend income or gain
were recognized by Geron stockholders with respect to the Series A Distribution,
then Geron stockholders could incur U.S. federal income taxes with respect to
the receipt of such distribution. Similarly, if any dividend income or gain were
recognized by Geron stockholders with respect to the distribution by Asterias of
the BioTime Warrants, Geron stockholders could incur U.S. federal income taxes
with respect to the receipt of such distribution. In addition, non-U.S. Geron
stockholders may be subject to U.S. federal withholding. The lack of an active
public market for the Asterias Series A common stock could limit or preclude the
sale of a sufficient quantity of Asterias Series A common stock to satisfy such
potential tax liabilities. As a result, Geron stockholders who received shares
of Asterias Series A common stock may incur tax liabilities as a result of the
Series A Distribution, but be unable to realize sufficient value from shares of
any Asterias Series A common stock distributed by Geron and/or the BioTime
Warrants distributed by Asterias. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Failure to achieve and
maintain effective internal controls in accordance with Section 404 of the
Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business
and stock price.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Section 404 of the
Sarbanes-Oxley Act of 2002, or Section 404, requires that we establish and
maintain an adequate internal control structure and procedures for financial
reporting. Our annual reports on Form 10-K must contain an assessment by
management of the effectiveness of our internal control over financial reporting
and must include disclosure of any material weaknesses in internal control over
financial reporting that we have identified. In addition, our independent
registered public accounting firm must annually provide an opinion on the
effectiveness of our internal control over financial reporting. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The requirements of Section
404 are ongoing and also apply to future years. We expect that our internal
control over financial reporting will continue to evolve as our business
develops. Although we are committed to continue to improve our internal control
processes and we will continue to diligently and vigorously review our internal
control over financial reporting in order to ensure compliance with Section 404
requirements, any control system, regardless of how well designed, operated and
evaluated, can provide only reasonable, not absolute, assurance that its
objectives will be met. Therefore, we cannot be certain that in the future
material weaknesses or significant deficiencies will not exist or otherwise be
discovered. If material weaknesses or other significant deficiencies occur,
these weaknesses or deficiencies could result in misstatements of our results of
operations, restatements of our financial statements, a decline in our stock
price, or other material adverse effects on our business, reputation, results of
operations, financial condition or liquidity. </FONT></P>
<P align=center><FONT face="Times New Roman" size=2>31</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>RISKS RELATED TO
COMPETITIVE FACTORS</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Competitors may develop
technologies that are superior to or more cost-effective than ours, which may
significantly impact the commercial viability of imetelstat which could cause
Janssen to terminate the Collaboration Agreement and damage our ability to
sustain operations. </FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The pharmaceutical and
biotechnology industries are intensely competitive. Other pharmaceutical and
biotechnology companies and research organizations currently engage in or have
in the past engaged in efforts related to the biological mechanisms related to
imetelstat, including the study of telomeres, telomerase and our proprietary
oligonucleotide chemistry, and the research and development of therapies for the
treatment of hematologic myeloid malignancies. In addition, other products and
therapies that could directly compete with imetelstat currently exist or are
being developed by pharmaceutical and biopharmaceutical companies and by
academic institutions, government agencies and other public and private research
organizations. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Many companies are developing
alternative therapies to treat hematologic myeloid malignancies and, in this
regard, are competitors of ours and Janssen. For example, if approved for
commercial sale for the treatment of MF, imetelstat would compete against Incyte
Corporation&#146;s ruxolitinib, or Jakafi&#174;, which is orally administered. In clinical
trials, Jakafi&#174; reduced spleen size, abdominal discomfort, early satiety, bone
pain, night sweats and itching in MF patients. Recently, there have also been
reports of overall survival benefit as well as improvement in bone marrow
fibrosis from Jakafi&#174; treatment. Other treatment modalities for MF include
hydroxyurea for the management of splenomegaly, leukocytosis, thrombocytosis and
constitutional symptoms; splenectomy and splenic irradiation for the management
of splenomegaly and co-existing cytopenias, or low blood cells; chemotherapy and
pegylated interferon. Drugs for the treatment of MF-associated anemia include
erythropoiesis-stimulating agents, androgens, danazol, corticosteroids,
thalidomide and lenalidomide. There are other investigational treatments further
along in development than imetelstat, such as momelotinib by Gilead Sciences,
Inc. and pacritinib by Cell Therapeutics, Inc., which are currently in Phase 3
clinical trials, and other inhibitors of the JAK-STAT pathway, as well as
several investigational treatments in early phase testing such as histone
deacetylase inhibitors, inhibitors of heat shock protein 90, hypomethylating
agents, PI3 Kinase and mTOR inhibitors, hedgehog inhibitors, anti-LOX2
inhibitors, recombinant pentraxin 2 protein, KIP-1 activators, TGF-beta
inhibitors, FLT inhibitors, and other tyrosine kinase inhibitors. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Smaller companies may also
prove to be significant competitors, particularly through collaborative
arrangements with large and established companies. We anticipate increased
competition in the future as new companies explore treatments for hematologic
myeloid malignancies, which may significantly impact the commercial viability of
imetelstat. Academic institutions, government agencies and other public and
private research organizations may also conduct research, seek patent protection
and establish collaborative arrangements for research, clinical development and
marketing of products similar to ours. These companies and institutions compete
with us in recruiting and retaining qualified scientific and management
personnel as well as in acquiring technologies complementary to our imetelstat
program. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition to the above
factors, we and Janssen expect to face competition in the following areas:
</FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>product efficacy and
  safety;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>convenience of product
  administration;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>cost of manufacturing;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the timing and scope of regulatory
  consents;</FONT></LI></UL>
<P align=center><FONT face="Times New Roman" size=2>32</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>status of reimbursement
  coverage;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>price; and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>patent position, including potentially
  dominant patent positions of others.</FONT></LI></UL>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>As a result of the foregoing,
competitors may develop more commercially desirable or affordable products, or
achieve earlier patent protection or product commercialization than us or
Janssen. Competitors have developed, or are in the process of developing,
technologies that are, or in the future may be, competitive to imetelstat. Some
of these products may have an entirely different approach or means of
accomplishing therapeutic effects similar to those that may be demonstrated by
imetelstat. Competitors may develop products that are safer, more effective or
less costly than imetelstat, or more convenient to administer to patients and,
therefore, present a serious competitive threat to imetelstat. In addition,
competitors may price their products below what Janssen may determine to be an
acceptable price for imetelstat, may receive better third-party payor coverage
and/or reimbursement, or may be more cost effective than imetelstat. Such
competitive products or activities by competitors may render imetelstat
obsolete, which may cause Janssen to terminate the Collaboration Agreement which
would severely and adversely affect our business prospects. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>To be successful,
imetelstat must be accepted by the health care community, which can be very slow
to adopt or unreceptive to new technologies and products.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>If approved for marketing,
imetelstat may not achieve market acceptance since hospitals, physicians,
patients or the medical community in general may decide not to accept and
utilize imetelstat. If approved for commercial sale, imetelstat will compete
with a number of conventional and widely accepted drugs and therapies
manufactured and marketed by major pharmaceutical companies. The degree of
market acceptance of imetelstat will depend on a number of factors, including:
</FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>the establishment and demonstration to
  the medical community of the clinical efficacy and safety</FONT> <FONT face="Times New Roman" size=2>of imetelstat;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the ability to demonstrate that
  imetelstat is superior to alternatives currently on the
  market;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the ability to establish in the
  medical community the potential advantage of imetelstat over</FONT> <FONT face="Times New Roman" size=2>alternative treatment methods;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>the label and promotional claims
  allowed by the FDA or other regulatory agencies for imetelstat, if</FONT>
  <FONT face="Times New Roman" size=2>any;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>sales, marketing and distribution
  support for imetelstat; and<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>reimbursement policies of government
  and third-party payors.</FONT></LI></UL>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The established use of
conventional products competitive with imetelstat may limit or preclude the
potential for imetelstat to receive market acceptance upon any
commercialization. We or Janssen may be unable to demonstrate any
pharmacoeconomic advantage for imetelstat compared to established or
standard-of-care therapies, or newly developed therapies, for hematologic
myeloid malignancies. Third-party payors may decide that any potential
improvement that imetelstat may provide to clinical outcomes in hematologic
myeloid malignancies is not adequate to justify the costs of treatment with
imetelstat. If </FONT><FONT size=2 face="Times New Roman">third-party payors do not view imetelstat as
offering a better balance between clinical benefit and treatment cost compared
to standard-of-care therapies or other treatment modalities currently in
development, imetelstat may not be commercially viable. If the health care
community does not accept imetelstat for any of the foregoing reasons, or for
any other reason, our ability to earn potential milestone payments and royalties
under the Collaboration Agreement with Janssen would be negatively impacted and
our business prospects would be severely and adversely affected.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>33</FONT></P>
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<P align=left><B><I><FONT face="Times New Roman" size=2>If acceptable prices or
adequate reimbursement for imetelstat is not obtained, the use of imetelstat
could be severely limited.</FONT></I></B><FONT face="Times New Roman" size=2>
</FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>The ability to successfully
commercialize imetelstat will depend significantly on obtaining acceptable
prices and the availability of reimbursement to the patient from third-party
payors. In March 2010, the Patient Protection and Affordable Care Act, as
amended by the Health Care and Education Reconciliation Act, collectively known
as the Affordable Care Act, became law and substantially changed the way
healthcare will be financed by both governmental and private insurers, and
significantly impacted the pharmaceutical industry. The Affordable Care Act
contains a number of provisions, including those governing enrollment in federal
healthcare programs, reimbursement changes and fraud and abuse, which will
impact existing government healthcare programs and will result in the
development of new programs, including Medicare payment for performance
initiatives and improvements to the physician quality reporting system and
feedback program. Additionally, the Affordable Care Act: </FONT></P>
<UL style="FONT-SIZE: 10pt"><LI><FONT face="Times New Roman" size=2>mandates a further shift in the burden
  of Medicaid payments to the states;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>increases the minimum level of
  Medicaid rebates payable by manufacturers of brand-name drugs</FONT> <FONT face="Times New Roman" size=2>from 15.1% to 23.1%;<BR>&nbsp;</FONT>
  </LI><LI><FONT face="Times New Roman" size=2>requires collection of rebates for
  drugs paid by Medicaid managed care organizations;</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>requires manufacturers to participate
  in a coverage gap discount program, under which they must</FONT> <FONT face="Times New Roman" size=2>agree to offer 50% point-of-sale discounts off
  negotiated prices of applicable brand drugs to</FONT> <FONT face="Times New Roman" size=2>eligible beneficiaries during their coverage gap
  period, as a condition for the manufacturer&#146;s</FONT> <FONT face="Times New Roman" size=2>outpatient drugs to be covered under Medicare
  Part D, beginning January 2011; and</FONT> <BR>&nbsp;
  </LI><LI><FONT face="Times New Roman" size=2>imposes a non-deductible annual fee on
  pharmaceutical manufacturers or importers who sell</FONT> <FONT face="Times New Roman" size=2>&#147;branded prescription drugs&#148; to specified
  federal government programs.</FONT></LI></UL>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>In addition, other legislative
changes have been proposed and adopted since the Affordable Care Act was
enacted. The American Taxpayer Relief Act of 2012, signed into law in January
2013, among other things, also reduced Medicare payments to several providers,
including hospitals, imaging centers and cancer treatment centers, and increased
the statute of limitations period for the government to recover overpayments to
providers from three to five years. On March 1, 2013, the President signed an
executive order implementing sequestration, and on April 1, 2013, Medicare
payment reductions of 2% went into effect. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>While the Affordable Care Act
has likely increased the number of patients who have insurance coverage for
imetelstat, it is uncertain whether its cost containment measures will adversely
affect reimbursement for imetelstat. Cost control initiatives could decrease the
price that we receive for imetelstat in the future. If imetelstat is not
considered cost-effective or adequate third-party reimbursement for the users of
imetelstat cannot be obtained, then Janssen may be unable to maintain price
levels sufficient to realize an appropriate return on our investment for
imetelstat, which could harm our ability to earn potential milestone payments
and royalties under the Collaboration Agreement with Janssen and have an adverse
impact on our financial condition, operating results and business prospects.
</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>34</FONT></P>
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<DIV style="PAGE-BREAK-BEFORE: always"></DIV><BR>
<P align=center><B><FONT face="Times New Roman" size=2>RISKS RELATED TO
ENVIRONMENTAL AND PRODUCT LIABILITY</FONT></B><FONT face="Times New Roman" size=2> </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Activities conducted by
us or Janssen involve hazardous materials, and improper handling of these
materials by employees, contractors, or agents could expose us or Janssen to
significant legal and financial penalties. </FONT></I></B><FONT face="Times New Roman" size=2></FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>If we, Janssen or contractors
or agents are unable to comply with federal, state and county environmental and
safety laws and regulations, including those governing laboratory procedures,
exposure to blood-borne pathogens and the handling of biohazardous materials,
chemicals and various radioactive compounds, considerable additional costs or
liabilities could be assessed that would have a material adverse effect on our
financial condition. We, Janssen, contractors or agents may be required to incur
significant costs to comply with current or future environmental laws and
regulations and may be adversely affected by the cost of compliance with these
laws and regulations. </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Although we believe that the
safety procedures previously used by us for using, handling, storing and
disposing of hazardous materials in our discontinued research facility complied
with the standards prescribed by state and federal regulations, we may incur
significant unanticipated costs associated with the closure and exit of our
research facility. Further, any failure by us to control the use, disposal,
removal or storage, or to adequately restrict the discharge, or assist in the
clean up, of hazardous chemicals or hazardous, infectious or toxic substances in
connection with the closure of our research facility could subject us to
significant liabilities, including joint and several liability under certain
statutes. Any such liability or costs could exceed our resources and could have
a material adverse effect on our business, financial condition and results of
operations. Additionally, an accident could damage the manufacturing facilities
and operations of any third party contracted by us or Janssen to perform
services with respect to imetelstat. Additional federal, state and local laws
and regulations affecting us or Janssen may be adopted in the future. We,
Janssen, or contractors or agents may incur substantial costs to comply with
these laws and regulations and substantial fines or penalties if any of us
violate any of these laws or regulations, which could negatively impact our
collaboration with Janssen or cause Janssen to terminate the Collaboration
Agreement, either of which would severely and adversely affect our business
prospects. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>We may not be able to
obtain or maintain sufficient insurance on commercially reasonable terms or with
adequate coverage against potential liabilities in order to protect ourselves
against product liability claims.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Our business exposes us to
potential product liability risks that are inherent in the testing,
manufacturing and marketing of human therapeutic and diagnostic products. We may
become subject to product liability claims if the use of imetelstat is alleged
to have injured patients, including any injuries alleged to arise from any
hepatotoxicity from imetelstat. We currently have limited clinical trial
liability insurance, and we may not be able to maintain this type of insurance
for any of our clinical trials or clinical trials that we may conduct in
collaboration with Janssen under the Collaboration Agreement. In addition,
product liability insurance is becoming increasingly expensive. Being unable to
obtain or maintain product liability insurance in the future on acceptable terms
or with adequate coverage against potential liabilities could have a material
adverse effect on our business. </FONT></P>
<P align=left><B><I><FONT face="Times New Roman" size=2>Our headquarters are
located near known earthquake fault zones, and the occurrence of an earthquake
or other catastrophic disaster could cause damage to our offices and equipment,
which could cause delays or even require us to cease or curtail
operations.</FONT></I></B><FONT face="Times New Roman" size=2> </FONT></P>
<P ALIGN="LEFT" STYLE="text-indent: 15pt"><FONT face="Times New Roman" size=2>Our headquarters are located
in the San Francisco Bay Area near known earthquake fault zones and are
vulnerable to significant damage from earthquakes. We do not carry earthquake
insurance. We are also vulnerable to damage from other types of disasters,
including fires, floods, power loss, communications failures, terrorism and similar events. If any disaster were to occur,
our ability to operate our business at our offices would be seriously, or
potentially completely, impaired. The insurance we maintain may not be adequate
to cover our losses from such disasters or other business
interruptions.</FONT></P>
<P align=center><FONT face="Times New Roman" size=2>35</FONT></P>
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