UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON D.C. 20549_______________FORM
10-Q_______________ (Mark One)**x**
    ****
    QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934****
    ****For the quarterly period ended March 31, 2009****OR******o**
    ****
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934  For the transition period from _____
to _____.Commission File Number:
0-20859________________GERON
CORPORATION(Exact name of registrant
as specified in its charter) DELAWARE
    
    75-2287752(State or other
      jurisdiction of
    
    (I.R.S.
      Employerincorporation or
      organization)
    
    Identification
      No.)230 CONSTITUTION
      DRIVE, MENLO PARK, CA
    
    94025(Address of
      principal executive offices)
    
    (Zip
      Code) (650)
473-7700(Registrants telephone
number, including area code) N/A(Former name, former address and former fiscal year, if changed since
last report) Indicate by
check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.     YesxNoo Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files).     Yeso     Nox Indicate by
check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer, and smaller
reporting company in Rule 12b-2 of the Exchange Act. Large
      accelerated filer
    o
    Accelerated
      filer
    xNon-accelerated filer
    o
    Smaller
      reporting company
    o(Do not check if a smaller reporting
      company)  Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act).     Yeso     Nox Indicate the number of shares
outstanding of each of the issuers classes of common stock, as of the latest
practicable date. Class:
    Outstanding at April
      24, 2009:Common Stock, $0.001
      par value
    89,053,149
      shares


---

GERON CORPORATION

INDEX

|                              |                                                                                                  | Page
|----------------------------- | ------------------------------------------------------------------------------------------------ | ----
|PART I. FINANCIAL INFORMATION
|Item
      1:                 | Condensed
      Consolidated Financial Statements                                                | 1   
|                              | Condensed Consolidated Balance Sheets as of March 31, 2009 and
      December 31, 2008           | 1   
|                              | Condensed Consolidated
      Statements of Operations for the three months ended March 31,       |     
|                              | 2009 and 2008                                                                                    | 2   
|                              | Condensed
      Consolidated Statements of Cash Flows for the three months ended March
      31, |     
|                              | 2009
      and 2008                                                                              | 3   
|                              | Notes to
      Condensed Consolidated Financial Statements                                       | 4   
|Item 2:                       | Managements Discussion and Analysis of Financial Condition and
      Results of Operations      | 15  
|Item
      3:                 | Quantitative and
      Qualitative Disclosures About Market Risk                                 | 20  
|Item 4:                       | Controls and Procedures                                                                          | 21  
|                             
|PART II. OTHER INFORMATION   
|Item
      1:                 | Legal
      Proceedings                                                                          | 21  
|Item 1A:                      | Risk Factors                                                                                     | 21  
|Item
      2:                 | Unregistered
      Sales of Equity Securities and Use of Proceeds                                | 35  
|Item 3:                       | Defaults Upon Senior Securities                                                                  | 35  
|Item
      4:                 | Submission of
      Matters to a Vote of Security Holders                                        | 35  
|Item 5:                       | Other Information                                                                                | 35  
|Item
      6:                 | Exhibits                                                                                         | 36  
|                              | SIGNATURE                                                                                        | 36  

---

PART I. FINANCIAL
INFORMATION

ITEM 1. CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

GERON
CORPORATIONCONDENSED CONSOLIDATED
BALANCE SHEETS(IN THOUSANDS)

|                                                                  | MARCH 31,   |          | DECEMBER 31,
|----------------------------------------------------------------- | ----------- | -------- | ------------
|                                                                  | 2009        |          | 2008        
|                                                                  | (UNAUDITED) |          |             
|ASSETS                                                            |             |          |             
|Current
      assets:                                             |             |          |             
|Cash and cash
      equivalents                                   | $           | 125,601  |             
|Restricted
      cash                                             |             | 817      |             
|Marketable
      securities                                       |             | 74,084   |             
|Interest and
      other receivables                              |             | 545      |             
|Current portion of prepaid
      and other assets                 |             | 3,754    |             
|Total current assets                                              |             | 204,801  |             
|Noncurrent portion of prepaid assets                              |             | 1,905    |             
|Investments in
      licensees                                    |             | 1        |             
|Property and equipment, net                                       |             | 4,483    |             
|Deposits and
      other assets                                   |             | 343      |             
|                                                                  | $           | 211,533  |             
|                                                                 
|LIABILITIES AND STOCKHOLDERS EQUITY                              |             |          |             
|Current
      liabilities:                                        |             |          |             
|Accounts
      payable                                            | $           | 1,899    |             
|Accrued
      compensation                                        |             | 1,275    |             
|Accrued liabilities
      (including amounts for related parties: |             |          |             
|2009-$497, 2008-$270)                                             |             | 3,309    |             
|Current
      portion of deferred revenue                         |             |         |             
|Fair value of
      derivatives                                   |             | 1,077    |             
|Current portion of advance
      payment from related party for   |             |          |             
|research and development, net                                     |             | 199      |             
|Total current liabilities                                         |             | 7,759    |             
|Noncurrent portion of deferred revenue                            |             |         |             
|Commitments and contingencies                                     |             |          |             
|Stockholders equity:                                             |             |          |             
|Common
    stock                                                  |             | 89       |             
|Additional paid-in
      capital                                  |             | 727,346  |             
|Accumulated
      deficit                                         |             | (523,704 | )           
|Accumulated other
      comprehensive income                      |             | 43       |             
|Total stockholders equity                                        |             | 203,774  |             
|                                                                  | $           | 211,533  |             

See accompanying
notes.

1

---

GERON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(IN THOUSANDS, EXCEPT SHARE AND PER SHARE
DATA)(UNAUDITED)

|                                                                     | THREE MONTHS ENDED
|-------------------------------------------------------------------- | ------------------
|                                                                     | MARCH 31,         
|                                                                     | 2009              
|Revenues from collaborative agreements (including amounts
      from |                   
|related parties: 2009-none,
      2008-$26)                          | $                 
|License fees and
      royalties (including amounts from related     |                   
|parties: 2009-none, 2008-$1,500)                                     |                   
|Total revenues                                                       |                   
|                                                                    
|Operating expenses:                                                  |                   
|Research and
      development (including amounts for related        |                   
|parties: 2009-$429, 2008-$149)                                       |                   
|General and
      administrative                                     |                   
|Total operating expenses                                             |                   
|Loss from operations                                                 |                   
|Unrealized gain
      on fair value of derivatives, net              |                   
|Interest and other income                                            |                   
|Losses
      recognized under equity method investment               |                   
|Interest and other expense                                           |                   
|Net
    loss                                                         | $                 
|                                                                    
|Basic and diluted net loss per share                                 | $                 
|                                                                    
|Shares used in computing basic and diluted net loss per
    share    |                   

See accompanying
notes.

2

---

GERON CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWSCHANGE IN CASH AND CASH EQUIVALENTS(IN THOUSANDS)(UNAUDITED)

|                                                                                  | THREE MONTHS ENDED
|--------------------------------------------------------------------------------- | ------------------
|                                                                                  | MARCH 31,         
|                                                                                  | **2009**          
|Cash flows from operating activities:                                             |                   
|Net
    loss                                                                      | $                 
|Adjustments to reconcile net loss to net cash used in operating
      activities: |                   
|Depreciation
      and amortization                                               |                   
|Accretion and
      amortization on investments, net                              |                   
|Loss (gain)
      on retirement/sale of property and equipment                    |                   
|Issuance of
      common stock in exchange for services by non-employees          |                   
|Stock-based
      compensation for employees and directors                        |                   
|Amortization
      related to 401(k) contributions                                |                   
|Loss on
      investments in licensees                                            |                   
|Unrealized
      gain on fair value of derivatives                                |                   
|Changes in
      assets and liabilities:                                          |                   
|Other current
      and noncurrent assets                                         |                   
|Other current
      and noncurrent liabilities                                    |                   
|Advance payment from related party for research                                   |                   
|and
      development                                                             |                   
|Net cash used in
      operating activities                                       |                   
|                                                                                 
|Cash flows from investing activities:                                             |                   
|Restricted cash
      transfer                                                    |                   
|Proceeds from sale of fixed assets                                                |                   
|Purchases of
      property and equipment                                         |                   
|Purchases of marketable securities                                                |                   
|Proceeds from
      maturities of marketable securities                           |                   
|Net cash (used in) provided by investing activities                               |                   
|                                                                                 
|Cash flows from financing activities:                                             |                   
|Proceeds from
      issuances of common stock, net of issuance costs              |                   
|Net cash provided by financing activities                                         |                   
|Net increase
      (decrease) in cash and cash equivalents                        |                   
|Cash and cash equivalents at the beginning of the period                          |                   
|Cash and cash
      equivalents at the end of the period                          | $                 

See accompanying
notes.

3

---

Geron
CorporationNotes to Condensed
Consolidated Financial StatementsMarch 31,
2009(Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

Basis of Presentation

The terms
Geron, the Company, we and us as used in this report refer to Geron
Corporation. The accompanying unaudited condensed consolidated balance sheet as
of March 31, 2009 and condensed consolidated statements of operations for the
three months ended March 31, 2009 and 2008 have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by U.S. generally accepted accounting principles for complete financial
statements. In the opinion of management of Geron, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three month period ended March 31,
2009 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2009 or any other period. These financial statements
and notes should be read in conjunction with the financial statements for each
of the three years ended December 31, 2008, included in the Companys Annual
Report on Form 10-K. The accompanying condensed consolidated balance sheet as of
December 31, 2008 has been derived from audited financial statements at that
date.

Principles of
Consolidation

The
consolidated financial statements include the accounts of Geron, our
wholly-owned subsidiary, Geron Bio-Med Ltd. (Geron Bio-Med), a United Kingdom
company, and our majority-owned subsidiary, TA Therapeutics, Ltd. (TAT), a Hong
Kong company. We have eliminated intercompany accounts and transactions. We
prepare the financial statements of Geron Bio-Med using the local currency as
the functional currency. We translate the assets and liabilities of Geron
Bio-Med at rates of exchange at the balance sheet date and translate income and
expense items at average monthly rates of exchange. The resultant translation
adjustments are included in accumulated other comprehensive income (loss), a
separate component of stockholders equity. The functional currency for TAT is
U.S. dollars.

Net Loss Per Share

Basic
earnings (loss) per share is calculated based on the weighted average number of
shares of common stock outstanding during the period. Diluted earnings (loss)
per share is calculated based on the weighted average number of shares of common
stock and dilutive securities outstanding during the period. Potential dilutive
securities primarily consist of outstanding employee stock options, restricted
stock and warrants to purchase common stock and have been determined using the
treasury stock method at an average market price during the period.

Because we
were in a net loss position, diluted earnings per share excludes the effects of
potential dilutive securities. Had we been in a net income position, diluted
earnings per share would have included the shares used in the computation of
basic net loss per share as well as an additional 857,838 and 358,794 shares for
2009 and 2008, respectively, related to outstanding options, restricted stock
and warrants (as determined using the treasury stock method at the estimated
average market value).

Use of Estimates

The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires us to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. On a regular basis, management evaluates these estimates and
assumptions. Actual results could differ from those estimates.

Fair Value of Financial
Instruments

In September
2006, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 157, Fair Value Measurements, (SFAS 157)
which defines fair value, establishes guidelines for measuring fair value and
expands disclosures regarding fair value measurements. In February 2008, the
FASB issued FASB FSP 157-2 which delayed the effective date of SFAS 157 for all
nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually), until fiscal years beginning after November 15, 2008,
and interim periods within those fiscal years. These nonfinancial items include
assets and liabilities such as reporting units measured at fair value in a
goodwill impairment test and nonfinancial assets acquired and liabilities
assumed in a business combination. We adopted SFAS 157 effective January 1, 2008
for recurring financial assets and liabilities. Effective January 1, 2009, we
adopted SFAS 157 for nonrecurring fair value measurement requirements for
nonfinancial assets and liabilities. Our adoption of SFAS 157 did not have a
material impact on our consolidated financial position, results of operations or
cash flows. See Note 2 for information and related disclosures regarding our
fair value measurements.

4

---

Geron
CorporationNotes to Condensed
Consolidated Financial StatementsMarch 31, 2009(Unaudited)

Cash Equivalents and Marketable
Securities

We consider
all highly liquid investments with an original maturity of three months or less
to be cash equivalents. We are subject to credit risk related to our cash
equivalents and available-for-sale securities. We place our cash and cash
equivalents in money market funds and U.S. Treasury securities. Our investments
include U.S. Treasury securities, U.S. government-sponsored enterprise
securities and commercial paper with original maturities ranging from three to
eleven months.

We classify
our marketable debt securities as available-for-sale. We record
available-for-sale securities at fair value with unrealized gains and losses
reported in accumulated other comprehensive income (loss) in stockholders
equity. Realized gains and losses are included in interest and other income and
are derived using the specific identification method for determining the cost of
securities sold and have been insignificant to date. Dividend and interest
income are recognized when earned and included in interest and other income on
our condensed consolidated statements of operations. We recognize a charge when
the declines in the fair values of our available-for-sale securities below the
amortized cost basis are judged to be other-than-temporary. We consider various
factors in determining whether to recognize an other-than-temporary charge,
including the length of time and extent to which the fair value has been less
than our amortized cost basis, the financial condition and near-term prospects
of the security issuer, and our intent and ability to hold the investment for a
period of time sufficient to allow for any anticipated recovery in market value.
Declines in market value judged other-than-temporary result in a charge to
interest and other income.

Marketable and Non-Marketable
Investments in Licensees

Investments in non-marketable
nonpublic companies, in which we own less than 20% of the outstanding voting
stock and do not otherwise have the ability to exert significant influence over
the investees, are carried at cost, as adjusted for other-than-temporary
impairments. Investments in marketable equity securities are carried at fair
value as of the balance sheet date with unrealized gains and losses reported in
accumulated other comprehensive income (loss) in stockholders equity. Realized
gains or losses are included in interest and other income and are derived using
the specific identification method.

We apply the
equity method of accounting for investments in licensees in which we own more
than 20% of the outstanding voting stock or otherwise have the ability to exert
significant influence over the investees. Under this method, we increase
(decrease) the carrying value of our investment by our proportionate share of
the investees earnings (losses). If losses exceed the carrying value of the
investment, losses are then applied against any advances to the investee,
including any commitment to provide financial support, until those amounts are
reduced to zero. The equity method is then suspended until the investee has
earnings. Any proportionate share of investee earnings is first applied to the
share of accumulated losses not recognized during the period the equity method
was suspended.

We monitor
our investments in licensees for impairment on a quarterly basis and make
appropriate reductions in carrying values when such impairments are determined
to be other-than-temporary. Other-than-temporary charges are included in
interest and other income. Factors used in determining whether an
other-than-temporary charge should be recognized include, but are not limited
to, the current business environment including competition and uncertainty of
financial condition; going concern considerations such as the rate at which the
investee company utilizes cash, and the investee companys ability to obtain
additional private financing to fulfill its stated business plan; the need for
changes to the investee companys existing business model due to changing
business environments and its ability to successfully implement necessary
changes; and the general progress toward product development, including clinical
trial results.

5

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Geron
CorporationNotes to Condensed
Consolidated Financial StatementsMarch 31,
2009(Unaudited)

Fair Value of
Derivatives

We apply the
provisions of several accounting pronouncements, including Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities, (SFAS 133), Statement of Financial Accounting Standards
No. 150, Accounting for Certain Financial Instruments with Characteristics of
Both Liabilities and Equity, (SFAS 150) and Emerging Issues Task Force Issue
00-19, Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock, (Issue 00-19) to determine
whether financial instruments or a component of a financial instrument should be
classified within assets, liabilities or stockholders equity.

For warrants
and non-employee options classified as assets or liabilities, the fair value of
these instruments is recorded on the condensed consolidated balance sheet at
inception of such classification and adjusted to fair value at each financial
reporting date. The change in fair value of the warrants and non-employee
options is recorded in the condensed consolidated statements of operations as
unrealized gain (loss) on fair value of derivatives. Fair value of warrants and
non-employee options is estimated using the Black Scholes option-pricing model.
The warrants and non-employee options continue to be reported as an asset or
liability until such time as the instruments are exercised or expire or are
otherwise modified to remove the provisions which require this treatment, at
which time these instruments are marked to fair value and reclassified from
assets or liabilities to stockholders equity. For warrants and non-employee
options classified as permanent equity, the fair value of the warrants and
non-employee options is recorded in stockholders equity and no further
adjustments are made.

Revenue Recognition

We apply the
principles and guidance outlined in EITF No. 00-21, Revenue Arrangements with
Multiple Deliverables, (Issue 00-21) in accounting for revenue. Issue 00-21
provides a framework to (i) determine whether an arrangement involving multiple
deliverables contains more than one unit of accounting, (ii) determine how the
arrangement consideration should be measured and allocated to the separate units
of accounting in the arrangement and (iii) apply relevant revenue recognition
criteria, under Staff Accounting Bulletin No. 104, Revenue Recognition, (SAB
104) separately for each of the separate units. Our arrangements generally do
not contain a general right of return relative to the delivered item.

We have
several license agreements with various oncology, diagnostics, research tools,
agriculture and biologics production companies. With certain of these
agreements, we receive nonrefundable license payments in cash or equity
securities, option payments in cash or equity securities, royalties on future
sales of products, milestone payments, or any combination of these items.
Upfront nonrefundable signing, license or non-exclusive option fees are
recognized as revenue when rights to use the intellectual property related to
the license have been delivered and over the term of the agreement if we have
continuing performance obligations. Milestone payments, which are subject to
substantive contingencies, are recognized upon completion of specified
milestones, representing the culmination of the earnings process, according to
contract terms. Royalties are generally recognized upon receipt of the related
royalty payment. Deferred revenue represents the portion of research and license
payments received which has not been earned. When payments are received in
equity securities, we do not recognize any revenue unless such securities are
determined to be realizable in cash.

We recognize
revenue under collaborative agreements as the related research and development
costs for services are rendered. We recognize related party revenue under
collaborative agreements as the related research and development costs for
services are rendered and when the source of funds have not been derived from
our contributions to the related party.

6

---

Geron
CorporationNotes to Condensed
Consolidated Financial StatementsMarch 31,
2009(Unaudited)

Restricted Cash

The components of restricted cash
are as follows:

|                                                           | March 31,      |     | December 31,
|---------------------------------------------------------- | -------------- | --- | ------------
|                                                           | 2009           |     | **2008**    
|                                                           | (In thousands)
|Certificate of deposit for unused equipment line of
credit | $              | 530 |             
|Certificate of
      deposit for credit card purchases     |                | 259 |             
|Funds held in trust for creditors of TA Therapeutics,
Ltd. |                | 28  |             
|                                                           | $              | 817 |             

Research and Development Expenses

All research
and development costs are expensed as incurred. The value of acquired in-process
research and development is charged to research and development expense on the
date of acquisition, if not acquired in connection with a business combination.
Research and development expenses include, but are not limited to, acquired
in-process technology deemed to have no alternative future use, payroll and
personnel expense, lab supplies, preclinical studies, raw materials to
manufacture clinical trial drugs, manufacturing costs for research and clinical
trial materials, sponsored research at other labs, consulting, costs to maintain
technology licenses and research-related overhead.

Depreciation and
Amortization

We record
property and equipment at cost and calculate depreciation using the
straight-line method over the estimated useful lives of the assets, generally
four years. Leasehold improvements are amortized over the shorter of the
estimated useful life or remaining term of the lease.

Stock-Based
Compensation

Statement of
Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment,
(SFAS 123R) requires the measurement and recognition of compensation expense for
all stock-based awards made to employees and directors, including stock options,
restricted stock awards and employee stock purchases related to our Employee
Stock Purchase Plan (ESPP purchases) based upon the grant-date fair value of
those awards.

On January
1, 2006 we implemented the provisions of SFAS 123R using the modified
prospective transition method. In accordance with this method, for awards
expected to vest, we recognize compensation expense on a straight-line basis for
stock-based awards granted after January 1, 2006, plus unvested awards granted
prior to January 1, 2006 based on the grant-date fair value estimated in
accordance with the original provisions of SFAS 123 and following the
straight-line attribution method elected originally upon the adoption of SFAS
123.

The
following table summarizes the stock-based compensation expense related to stock
options, restricted stock awards and employee stock purchases under SFAS 123R
for the three months ended March 31, 2009 and 2008 which was allocated as
follows:

|                                                       | Three Months Ended
|------------------------------------------------------ | ------------------
|                                                       | March 31,         
|                                                       | 2009              
|                                                       | (In thousands)    
|Research and development                               | $                 
|General and
      administrative                       |                   
|Stock-based compensation expense included in operating |                   
|expenses                                               | $                 

7

---

Geron
CorporationNotes to Condensed
Consolidated Financial StatementsMarch 31,
2009(Unaudited)

Stock Options

The fair
value of options granted during the three months ended March 31, 2009 and 2008
has been estimated at the date of grant using the Black Scholes option-pricing
model with the following assumptions:

|                              | Three Months Ended March
      31,
|----------------------------- | ----------------------------------
|                              | 2009                              
|Dividend yield                | None                              
|Expected
      volatility     | 0.630                             
|Risk-free interest rate range | 1.54% to 1.81%                    
|Expected
      term           | 5
yrs                             

Employee Stock Purchase
Plan

The fair
value of employees purchase rights during the three months ended March 31, 2009
and 2008 has been estimated using the Black Scholes option-pricing model with
the following assumptions:

|                                | Three Months Ended March
      31,
|------------------------------- | ----------------------------------
|                                | 2009                              
|Dividend yield                  | None                              
|Expected
      volatility range | 0.536 to
      1.016              
|Risk-free interest rate range   | 0.28% to 2.38%                    
|Expected term
      range       | 6 - 12
      mos                  

The expected
volatility range is based on historical volatilities of our stock, because
traded options on Geron stock do not correspond to option terms or the
underlying stock trading volume. The risk-free interest rate is based on the
U.S. Zero Coupon Treasury Strip Yields for the expected term in effect on the
date of grant. The expected term of options is derived from actual historical
exercise data and represents the period of time that options granted are
expected to be outstanding. The expected term of employees purchase rights is
equal to the purchase period. Dividend yield is based on historical cash
dividend payments, which have been none to date. We grant options under our
equity plans to employees, non-employee directors and consultants, which
generally vest over four years.

As
stock-based compensation expense recognized in the condensed consolidated
statements of operations for the three months ended March 31, 2009 and 2008 is
based on awards ultimately expected to vest, it has been reduced for estimated
forfeitures but, at a minimum, reflects the grant-date fair value of those
awards that actually vested in the period. SFAS 123R requires forfeitures to be
estimated at the time of grant and revised, if necessary, in subsequent periods
if actual forfeitures differ from those estimates. Forfeitures were estimated
based on historical experience.

Restricted Stock Awards

The
stock-based compensation expense related to restricted stock awards is
determined using the fair value of our common stock on the date of grant and
reduced for estimated forfeitures as applicable. The fair value is amortized as
compensation expense over the service period of the award on a straight-line
basis.

We continue
to apply the provisions of EITF Issue No. 96-18, Accounting for Equity
Instruments that are Issued to Other than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services (Issue 96-18) for our non-employee
stock-based awards. Under Issue 96-18, the measurement date at which the fair
value of the stock-based award is measured is equal to the earlier of 1) the
date at which a commitment for performance by the counterparty to earn the
equity instrument is reached or 2) the date at which the counterpartys
performance is complete. We recognize stock-based compensation expense for the
fair value of the vested portion of non-employee awards in our condensed
consolidated statements of operations.

8

---

Geron CorporationNotes to Condensed Consolidated
Financial Statements March 31, 2009 (Unaudited)

Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive
income (loss). Other comprehensive income (loss) includes certain changes in
stockholders equity which are excluded from net loss. The activity in
comprehensive loss during the three months ended March 31, 2009 and 2008 are as
follows:

|                                                                 | Three Months Ended
|---------------------------------------------------------------- | ------------------
|                                                                 | March 31,         
|                                                                 | 2009              
|                                                                 | (In thousands)    
|Net loss                                                         | $                 
|Change in
      unrealized gain on securities available-for-sale |                   
|and marketable investments in licensees                          |                   
|Change in foreign currency translation adjustments               |                   
|Comprehensive
      loss                                         | $                 

The components of accumulated other
comprehensive income are as follows:

|                                                     | March 31, 2009 |      | December 31, 2008
|---------------------------------------------------- | -------------- | ---- | -----------------
|                                                     | (In thousands)
|Unrealized gain on available-for-sale securities and |                |      |                  
|marketable
      investments in licensees            | $              | 214  |                  
|Foreign currency
      translation adjustments       |                | (171 | )                
|Accumulated other comprehensive income               | $              | 43   |                  

2. FAIR VALUE
MEASUREMENTS

Effective
January 1, 2008, assets and liabilities recorded at fair value in the condensed
consolidated balance sheet are categorized based upon the level of judgment
associated with inputs used to measure their value. SFAS 157 defines a
three-level valuation hierarchy for disclosure of fair value measurements as
follows:

Level 1  Inputs are unadjusted, quoted prices in active
markets for identical assets or liabilities at the measurement date.

Level 2 
Inputs (other than quoted market prices included in Level 1) are either directly
or indirectly observable for the asset or liability through correlation with
market data at the measurement date and for the duration of the instruments
anticipated life.

Level 3 
Inputs reflect managements best estimate of what market participants would use
in pricing the asset or liability at the measurement date. Consideration is
given to the risk inherent in the valuation technique and the risk inherent in
the inputs to the model.

A financial
instruments categorization within the valuation hierarchy is based upon the
lowest level of input that is significant to the fair value measurement.
Following is a description of the valuation methodologies used for instruments
measured at fair value on our condensed consolidated balance sheet, including
the general classification of such instruments pursuant to the valuation
hierarchy.

Cash Equivalents and Marketable
Securities Available-for-Sale

Where quoted
prices are available in an active market, securities are classified as Level 1
of the valuation hierarchy. Examples of such Level 1 securities include highly
liquid U.S. Treasury securities, U.S. government-sponsored enterprise securities
and money market funds. If quoted market prices are not available for the
specific security, then fair values are estimated by using pricing models,
quoted prices of securities with similar characteristics or discounted cash
flows. Examples of such Level 2 instruments include corporate notes,
asset-backed securities and commercial paper.

9

---

Geron CorporationNotes to Condensed Consolidated
Financial Statements March 31, 2009 (Unaudited)

Marketable and Non-Marketable
Investments in Licensees

Where quoted
prices are available in an active market, securities are classified as Level 1
of the valuation hierarchy. Level 1 securities include publicly traded equities.
Significant investments in licensees accounted under the equity method of
accounting or equity securities in non-marketable companies are not measured at
fair value which excludes them from SFAS 157.

Derivatives

Warrants to
purchase common stock and non-employee options are normally traded less
actively, have trade activity that is one way, and/or traded in less-developed
markets and are therefore valued based upon models with significant unobservable
market parameters, resulting in Level 3 classification of the valuation
hierarchy.

The fair
value of derivatives has been calculated at each reporting date using the Black
Scholes option-pricing model with the following assumptions:

|                                | March 31, 2009       |  | December 31, 2008   
|------------------------------- | -------------------- |  | --------------------
|Dividend yield                  | None                 |  | None                
|Expected
      volatility range | 0.670 to
      0.967 |  | 0.749 to
      0.758
|Risk-free interest rate range   | 0.57% to 1.98%       |  | 0.57% to 1.71%      
|Expected term
      range       | 1 yr to 6
      yrs  |  | 1 yr to 6
      yrs 

Expected
volatilities are based on historical volatilities of our stock since traded
options on Geron stock do not correspond to derivatives terms and trading
volume of Geron options is limited. The expected term of derivatives is equal to
the remaining contractual term of the instrument. The risk-free interest rate is
based on the U.S. Zero Coupon Treasury Strip Yields for the expected term in
effect on the reporting date. Dividend yield is based on historical cash
dividend payments, which have been none to date.

Fair Value on a Recurring Basis

The
following table presents information about our financial assets and liabilities
that are measured at fair value on a recurring basis as of March 31, 2009, and
indicates the fair value hierarchy of the valuation techniques utilized to
determine such fair value.

|                                               | Fair Value Measurements at Reporting
      Date Using
|---------------------------------------------- | -----------------------------------------------------
|                                               |                                                      
|                                               | Quoted Prices in                                     
|                                               | Active Markets for                                   
|                                               | Identical Assets                                     
|(In
      thousands)                           | Level 1                                              
|Assets                                         |                                                      
|Money market
      funds (1)                   | $                                                    
|U.S. Treasury securities (2)                   |                                                      
|Government-sponsored enterprise securities (2) |                                                      
|Commercial paper (2)                           |                                                      
|Marketable
      investments in licensees (3)  |                                                      
|Total                                          | $                                                    
|                                              
|Liabilities                                    |                                                      
|Derivatives
      (4)                          | $                                                    

|(1) |  | Included in cash and
      cash equivalents on our condensed consolidated balance sheet.     
|--- |  | ---------------------------------------------------------------------------------------------
|   
|(2) |  | Included in marketable
      securities on our condensed consolidated balance sheet.         
|   
|(3) |  | Included in
      investments in licensees on our condensed consolidated balance
      sheet.
|   
|(4) |  | Included in fair value
      of derivatives on our condensed consolidated balance
  sheet.   

10

---

Geron CorporationNotes to Condensed Consolidated
Financial Statements March 31, 2009 (Unaudited)

Changes in Level 3 Recurring Fair Value
Measurements

The table
below includes a rollforward of the balance sheet amounts as of March 31, 2009
(including the change in fair value), for financial instruments classified as
Level 3. When a determination is made to classify a financial instrument within
Level 3, the determination is based upon the significance of the unobservable
parameters to the overall fair value measurement. However, Level 3 financial
instruments typically include, in addition to the unobservable components,
observable components (that is, components that are actively quoted and can be
validated to external sources). Accordingly, the gains and losses in the table
below include changes in fair value due in part to observable factors that are
part of the methodology.

|                       |  |               | Fair Value Measurements Using Significant Unobservable Inputs
      (Level 3)
|---------------------- |  | ------------- | -----------------------------------------------------------------------------
|                       |  |               | Three Months Ended March 31,
      2009                                      
|                       |  |               |                                                                              
|                       |  |               |                                                                              
|                       |  |               |                                                                              
|                       |  |               |                                                                              
|                       |  |               |                                                                              
|                       |  | Fair Value at |                                                                              
|                       |  | December 31,  |                                                                              
|(In thousands)         |  | 2008          |                                                                              
|Derivative liabilities |  | $             | 1,184                                                                        

|(1) |  | Reported as unrealized
      gain on fair value of derivatives on our condensed consolidated statements
      of operations.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------

3. JOINT VENTURE AND RELATED PARTY
TRANSACTIONS

Start Licensing
and ViaGen, Inc.

In April
2005, Geron and Exeter Life Sciences, Inc. (Exeter) established Start Licensing,
Inc. (Start), a joint venture to manage and license a broad portfolio of
intellectual property rights related to animal reproductive technologies. We and
Exeter owned 49.9% and 50.1% of Start, respectively. In connection with the
establishment of Start, we granted a worldwide, exclusive, non-transferable
license to our patent rights to nuclear transfer technology for use in animal
cloning, with the right to sublicense such patent rights. Since there was no net
book value associated with the patent rights at the execution of the joint
venture, no initial value was recognized for our investment in Start. We did not
apply the equity method of accounting since our proportionate share of net
losses in Start exceeded our original carrying value of the investment and we
had no commitments to provide financial support or obligations to perform
services or other activities for Start.

On August 8,
2008, Geron and Exeter entered into Contribution Agreements whereby we and
Exeter exchanged our equity interests in Start for equity interests in ViaGen,
Inc. (ViaGen). As a result of the exchange, Start became a wholly-owned
subsidiary of ViaGen. Ownership of ViaGen immediately following the transaction
and at March 31, 2009 was as follows: Exeter  69%; Geron  27%; and Smithfield
Foods  4%. Since no value had been recorded for our investment in Start, the
same zero carrying value has been applied to our investment in ViaGen. Gerons
share of equity method losses from Start that were not recognized during the
period the equity method was suspended has been carried over to the investment
in ViaGen.

On September
4, 2008, Geron provided a $1,500,000 loan to ViaGen in connection with ViaGen
acquiring an interest in an unrelated company. The proceeds of the loan did not
fund prior ViaGen losses and represents additional financial support to ViaGen.
The loan bears an interest rate of 6% per annum and is convertible into ViaGen
equity at Gerons option at the then current market value. If not converted, the
principal amount of the loan plus any accrued interest is due in cash on
December 31, 2009. We have no commitments to provide financial support or
obligations to perform services or other activities for ViaGen.

In
accordance with the equity method of accounting, we increase (decrease) the
carrying value of our equity investment in ViaGen by our proportionate share of
ViaGens earnings (losses). If equity method losses exceed the carrying value of
the investment, losses are then applied against any advances to ViaGen,
including anycommitments to provide financial
support until those amounts are reduced to zero. The equity method of accounting
shall then be suspended until income is subsequently reported. When income is
reported, Gerons proportionate share of income shall first be applied to
recognize the equity method losses accumulated during the time the equity method
was suspended and then to restore the adjusted basis of the loan.

11

---

Geron CorporationNotes to Condensed Consolidated
Financial Statements March 31, 2009 (Unaudited)

We adjusted
the basis of our loan to ViaGen by $656,000 for our proportionate share of
ViaGens operating losses for the three months ended March 31, 2009. Our share
of losses is recorded in the condensed consolidated statements of operations
under losses recognized under equity method investment. As of March 31, 2009,
the adjusted basis of our investment in ViaGen was zero.

TA Therapeutics, Ltd.

In March
2005, we and the Biotechnology Research Corporation (BRC), a subsidiary of Hong
Kong University of Science and Technology, established a joint venture company
in Hong Kong called TA Therapeutics, Ltd. (TAT). TAT conducts research and was
established to commercially develop products that utilize telomerase activator
drugs to restore the regenerative and functional capacity of cells in various
organ systems that have been impacted by senescence, injury or chronic disease.
On June 15, 2007, we and BRC entered into an agreement to restructure the TAT
joint venture. Under the amended agreements, we direct the pre-clinical and drug
development activities, own a 75% voting interest and exercise control over the
company. Upon any winding up of TAT, all intellectual property of TAT is
assigned to us and BRC is entitled to royalties on sales of future products
developed from TATs efforts up to a fixed amount based on BRCs cash
contributions. Upon a winding up of TAT, if the assets available for
distribution, other than the intellectual property, are insufficient to repay
the whole of the paid-up capital, such assets shall be distributed so that the
losses shall be borne by the shareholders in proportion to the cash contributed
by both parties.

As a result
of our obtaining control over TAT, we have included the results of TAT in our
condensed consolidated financial statements beginning June 16, 2007. Based on
consideration of the relevant rights described above, we have determined that
BRCs 25% equity interest in TAT is not substantive. The amended arrangement
represents, in substance, a research and development arrangement between us and
BRC. Therefore, this arrangement is being accounted for as a research and
development arrangement. Contributions from BRC represent its share of funding
for future research and development activities that will be performed
principally by BRC and partly by us. Accordingly, BRCs net contributions have
been recorded as an advance payment for research and development on our
condensed consolidated balance sheet. The advance payment from BRC has been
recognized as either a reduction of research and development expenses or
revenues from collaborative agreements depending upon who performs the related
research and development activity. The advance payment from BRC has been
recorded as a reduction of research and development expenses in our condensed
consolidated statements of operations in the period when BRC performs the
underlying research activity on behalf of TAT. The advance payment from BRC has
been recognized as revenues from collaborative agreements in our condensed
consolidated statements of operations in the period when we perform research
activity on behalf of TAT and the source of funds has not been derived from our
cash contributions to TAT. For the three months ended March 31, 2009 and 2008,
we incurred related party research and development costs of $429,000 and
$149,000, respectively. For the three months ended March 31, 2009 and 2008, we
earned related party revenue of none and $26,000, respectively. As of March 31,
2009 and December 31, 2008, the net balance of the advance payment from BRC was
$199,000 and $440,000, respectively. Amounts recognized in our condensed
consolidated statements of operations will be based on proportional performance
over the period of planned research activity, which is expected to be two
months.

4. STOCKHOLDERS EQUITY

Vendor Stock
Issuances

In January
2009, we issued 163,666 shares of our common stock to Lonza Walkersville, Inc.
(Lonza) in a private placement as advance consideration related to a services
agreement pursuant to which Lonza is manufacturing certain products for us
intended for therapeutic use in humans. The total fair value of the common stock
was $1,185,000 which has been recorded as a prepaid asset and is being amortized
to research and development expense on a pro-rata basis as services are
performed. As of March 31, 2009, $790,000 remained as a prepaid asset which is
expected to be expensed over the next three months.

12

---

Geron CorporationNotes to Condensed Consolidated
Financial Statements March 31, 2009 (Unaudited)

In January
2009, we issued 69,290 shares of our common stock to MPI Research, Inc. (MPI) in
a private placement as advance consideration related to a services agreement
pursuant to which MPI has provided and will continue to provide certain
preclinical services in support of our programs. The total fair value of the
common stock was $502,000 which has been recorded as a prepaid asset and is
being amortized to research and development expense on a pro-rata basis as
services are performed. As of March 31, 2009, $157,000 remained as a prepaid
asset which is expected to be expensed over the next three months.

In January
2009, we issued 30,884 shares of our common stock to Samchully Pharmaceutical
Co., Ltd. (Samchully) in a private placement as advance consideration related to
a services agreement pursuant to which Samchully is manufacturing certain
products for us intended for therapeutic use in humans. The total fair value of
the common stock was $224,000 which has been recorded as a prepaid asset and is
being amortized to research and development expense on a pro-rata basis as
services are performed. As of March 31, 2009, $224,000 remained as a prepaid
asset which is expected to be expensed over the next three months.

Public Offering

On February
19, 2009, we completed an underwritten public offering of 7,250,000 shares
of our common stock at a public offering price of $6.60 per share, resulting in
net cash proceeds of approximately $45,933,000 after deducting underwriting
discounts and commissions and offering expenses.

5. SEGMENT INFORMATION

Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information, (SFAS 131) establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision making group, in making decisions
how to allocate resources and assess performance. Our executive management team
represents our chief decision maker, as defined under SFAS 131. To date, we have
viewed our operations as one segment, the discovery and development of
therapeutic and diagnostic products for oncology and human embryonic stem cell
therapies. As a result, the financial information disclosed herein materially
represents all of the financial information related to our principal operating
segment.

6. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS DATA

Supplemental schedule of non-cash operating and investing
activities:

|                                                                 | Three Months Ended
|---------------------------------------------------------------- | ------------------
|                                                                 | March 31,         
|(In
      Thousands)                                             | 2009              
|                                                                 | (Unaudited)       
|Supplemental Operating Activities:                               |                   
|Cash in transit from option exercises                            | $                 
|Net
      unrealized loss on investments in licensees            |                   
|Reclassification between derivative liabilities and
      equity |                   
|Shares issued for 401(k) matching contribution                   |                   
|Shares or warrants issued in exchange for
      services         |                   
|Reclassification between deposits and other current assets       |                   
|Supplemental
      Investing Activities:                         |                   
|Net
      unrealized gain on marketable securities               |                   

13

---

Geron CorporationNotes to Condensed Consolidated
Financial Statements March 31, 2009 (Unaudited)

7. SUBSEQUENT EVENTS

In April
2009 in connection with our continued collaboration with an investor and licensee and the
data received under the collaboration relevant to Gerons therapeutic programs, we modified the
terms of certain outstanding warrants held by this investor by extending
the exercise term and reducing the exercise price. The exercise term of warrants
to purchase 200,000 shares of common stock was extended to March 9, 2012 from
March 9, 2010 and the exercise price was modified to $17.50 per share from
$67.09 per share. The exercise term of warrants to purchase 100,000 shares of
common stock was extended to March 9, 2012 from March 9, 2010 and the exercise
price was unchanged at $12.50 per share. In connection with the modifications,
we expect to recognize a deemed dividend of approximately $190,000 in our
condensed consolidated statements of operations for the three and six months
ending June 30, 2009 for the incremental fair value of the modified warrants, as
calculated using the Black Scholes option-pricing model as of the modification
date.

In April
2009, we issued 174,798 shares of our common stock to MPI Research, Inc. (MPI)
in a private placement as advance consideration related to a services agreement
pursuant to which MPI has provided and will continue to provide certain
preclinical services in support of our programs. The total fair value of the
common stock was $902,000 which has been recorded as a prepaid asset and is
being amortized to research and development expense on a pro-rata basis as
services are performed, which is expected to be approximately one
year.

14

---

|ITEM 2. | MANAGEMENTS DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS
|------- | ------------------------------------------------------------------------------------------

OVERVIEW

This Form
10-Q contains forward-looking statements that involve risks and uncertainties.
We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify forward-looking statements. These
statements appear throughout the Form 10-Q and are statements regarding our
intent, belief, or current expectations, primarily with respect to our
operations and related industry developments. You should not place undue
reliance on these forward-looking statements, which apply only as of the date of
this Form 10-Q. Our actual results could differ materially from those
anticipated in these forward-looking statements for many reasons, including the
risks faced by us and described in Part I, Item 1A, entitled Risk Factors in
the Companys Annual Report on Form 10-K for the fiscal year ended December 31,
2008, and elsewhere in this Form 10-Q.

The
following discussion should be read in conjunction with the unaudited condensed
consolidated financial statements and notes thereto included in Part I, Item 1
of this Quarterly Report on Form 10-Q and with Managements Discussion and
Analysis of Financial Condition and Results of Operations contained in the
Companys Annual Report on Form 10-K for the fiscal year ended December 31,
2008.

Geron is a
Menlo Park, California-based biopharmaceutical company developing first-in-class
therapeutic products for the treatment of cancer and chronic degenerative
diseases, including spinal cord injury, heart failure and diabetes. The company
is advancing an anti-cancer drug and a cancer vaccine that target the enzyme
telomerase through multiple clinical trials. Geron is also believed to be the
world leader in the development of human embryonic stem cell (hESC)-based
therapeutics. The company has received clearance from the Food and Drug
Administration (FDA) to begin the worlds first human clinical trial of a
hESC-based therapy: GRNOPC1 for acute spinal cord injury.

Our results
of operations have fluctuated from period to period and may continue to
fluctuate in the future, as well as the progress of our research and development
efforts and variations in the level of expenses related to developmental efforts
during any given period. Results of operations for any period may be unrelated
to results of operations for any other period. In addition, historical results
should not be viewed as indicative of future operating results. We are subject
to risks common to companies in our industry and at our stage of development,
including risks inherent in our research and development efforts, reliance upon
our collaborative partners, enforcement of our patent and proprietary rights,
need for future capital, potential competition and uncertainty of clinical trial
results or regulatory approvals or clearances. In order for a product to be
commercialized based on our research, we and our collaborators must conduct
preclinical tests and clinical trials, demonstrate the efficacy and safety of
our product candidates, obtain regulatory approvals or clearances and enter into
manufacturing, distribution and marketing arrangements, as well as obtain market
acceptance. We do not expect to receive revenues or royalties based on
therapeutic products for a period of years, if at all.

CRITICAL ACCOUNTING POLICIES AND
ESTIMATES

We believe
that there have been no significant changes in our critical accounting policies
and estimates during the three months ended March 31, 2009 as compared to the
critical accounting policies and estimates disclosed in our Annual Report on
Form 10-K for the year ended December 31, 2008 as filed with the Securities and
Exchange Commission on February 27, 2009.

Our
condensed consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States. The
preparation of these financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses. Note 1 of Notes to Condensed Consolidated Financial
Statements describes the significant accounting policies used in the preparation
of the condensed consolidated financial statements.

Estimates
and assumptions about future events and their effects cannot be determined with
certainty. We base our estimates on historical experience and on various other
assumptions believed to be applicable and reasonable under the circumstances.
These estimates may change as new events occur, as additional information is
obtained and as our operating environment changes. These changes have
historically been minor and have been included in the condensed consolidated
financial statements as soon as they became known. Based on a critical
assessment of our accounting policies and the underlying judgments and
uncertainties affecting the application of those policies, management believes
that our condensed consolidated financial statements are fairly stated in
accordance withaccounting principles generally
accepted in the United States, and present a meaningful presentation of our
financial condition and results of operations.

15

---

RESULTS OF OPERATIONS

Revenues

We
recognized no revenues from collaborative agreements for the three months ended
March 31, 2009, compared to $79,000 for the comparable 2008 period. Revenues for
2008 primarily reflected related party reimbursements we received from our joint
venture in Hong Kong, TA Therapeutics, Ltd. (TAT), for scientific research
services and revenue recognized under our collaboration with Corning Life
Sciences. Since June 16, 2007, we have been consolidating TATs results of
operations and have eliminated any related party revenue when the source of
funds has been derived from our contributions to the related party.

We have
entered into license and option agreements with companies involved in oncology,
diagnostics, research tools, agriculture and biologics production. In each of
these agreements, we have granted certain rights to our technologies. In
connection with the agreements, we are entitled to receive license fees, option
fees, milestone payments and royalties on future sales, or any combination
thereof. We recognized license fee revenues of $380,000 for the three months
ended March 31, 2009, compared to $1.6 millionfor the comparable 2008 period related to our
various agreements. In 2008, license fee revenues included recognition of a $1.5
million milestone payment in connection with our joint venture agreement with
Exeter Life Sciences, Inc. as a result of the final Risk Assessment released by
the U.S. Food and Drug Administration addressing food products made from cloned
animals or their progeny. Current revenues may not be predictive of future
revenues.

We received
royalties of $64,000 for the three months ended March 31, 2009, compared to
$33,000 for the comparable 2008 period on product sales of telomerase detection
and telomere measurement kits to the research-use-only market, cell-based
research products and agricultural products. License and royalty revenues are
dependent upon additional agreements being signed and future product sales.

Research and Development
Expenses

Research and
development expenses were $13.8 million for the three months ended March 31,
2009, compared to $13.6 million for the comparable 2008 period. The increase in
research and development expenses for the 2009 first quarter compared to the
2008 first quarter is primarily the net result of increased clinical trial costs
of $427,000 as a result of increased patient enrollment for GRN163L and GRNVAC1
trials and start-up costs for the GRNOPC1 trial, offset by reduced sponsored
research of $222,000. Overall, we expect research and development expenses to
increase in the next year as we incur expenses related to clinical trials for
GRN163L, GRNVAC1 and GRNOPC1 along with continued development of our human
embryonic stem cell (hESC) programs.

Our research
and development activities have arisen from our two major technology platforms,
telomerase and hESCs. The oncology programs focus on treating or diagnosing
cancer by targeting or detecting the presence of telomerase, either inhibiting
activity of the telomerase enzyme, diagnosing cancer by detecting the presence
of telomerase, or using telomerase as a target for therapeutic vaccines. Our
core knowledge base in telomerase and telomere biology supports all these
approaches, and our scientists may contribute to any or all of these programs in
a given period. We have initiated the following clinical trials of
GRN163L:

- Phase I single agent trial in patients with
  chronic lymphoproliferative diseases;
- Phase I single agent trial in patients with solid
  tumor malignancies;
- Phase I trial in patients with advanced non-small
  cell lung cancer when administered intravenously in combination with a
  standard paclitaxel/carboplatin regimen;
- Phase I single agent trial in patients with
  multiple myeloma;
- Phase I/II trial in patients with breast cancer
  when administered intravenously in combination with a paclitaxel/bevacizumab
  regimen; and
- Phase I trial in patients with multiple myeloma
  when administered intravenously in combination with bortezomib with and
  without dexamethasone.

Preliminary
data from these studies showed safety and tolerability of the drug in low-dose
cohorts as well as the expected pharmacokinetic properties after multiple
intravenous infusions of the drug. Interim data from the ongoing clinical trial
of GRN163L in two patients with relapsed and refractory multiple myeloma showed
the first evidence inhumans of telomerase
inhibition by a telomerase targeting drug. These preliminary results will help
optimize dosing schedules to enable sustained telomerase inhibition that
hopefully will translate into clinical activity.

16

---

Taking the
results from the Duke University clinical studies in prostate cancer,
hematologic malignancies and renal cell carcinoma, we optimized the vaccine
manufacturing process and transferred it to a contract manufacturer. We have
initiated a Phase II clinical trial of our telomerase vaccine using the
prime/boost scheme in patients with acute myelogenous leukemia.

Our hESC
therapy programs focus on treating injuries and degenerative diseases with cell
therapies based on cells derived from hESCs. A core of knowledge of hESC
biology, as well as a significant continuing effort in deriving, growing,
maintaining, and differentiating hESCs, underlies all aspects of this group of
programs. Many of our researchers are allocated to more than one hESC program,
and the percentage allocations of time change as the resource needs of
individual programs vary. In our hESC therapy programs, we have concentrated our
resources on several specific cell types, including:

- GRNOPC1, hESC-derived oligodendrocyte progenitor
  cells, for the treatment of acute spinal cord injury;
- GRNCM1, hESC-derived cardiomyocytes, for the
  treatment of myocardial disease and toxicology drug testing;
- GRNIC1, hESC-derived pancreatic islet ß cells for
  the treatment of diabetes;
- hESC-derived osteoblasts for the treatment of
  osteoporosis;
- hESC-derived chondrocytes for the treatment of
  osteoarthritis;
- hESC-derived hepatocytes for liver failure and
  ADME drug testing; and
- hESC-derived dendritic cells for cancer
  immunotherapy and to prevent immune rejection of the other cell types used in
  therapeutic applications.

We have
developed proprietary methods to grow, maintain, and scale the culture of
undifferentiated hESCs that use feeder cell-free and serum-free media with
chemically defined components. Moreover, we have developed scalable processes to
differentiate these cells into therapeutically relevant cells. We have developed
cryopreserved formulations of hESC-derived cells to enable our business model of
delivering on demand cells for therapeutic use. In January 2009, we received
clearance from the FDA to begin a clinical trial of GRNOPC1, our hESC-derived
therapy targeted for the treatment of acute spinal cord injury.

Research and development expenses
allocated by program are as follows (in thousands):

|                     | Three Months Ended
|-------------------- | ------------------
|                     | March 31,         
|                     | 2009              
|                     | (Unaudited)       
|Oncology             | $                 
|hESC
      Therapies |                   
|Total                | $                 

At this
time, we cannot provide reliable estimates of how much time or investment will
be necessary to commercialize products from the programs currently in progress.
Drug development in the U.S. is a process that includes multiple steps defined
by the FDA under applicable statutes, regulations and guidance documents. After
the preclinical research process of identifying, selecting and testing in
animals a potential pharmaceutical compound, the clinical development process
begins with the filing of an IND. Clinical development typically involves three
phases of study: Phase I, II and III. The most significant costs associated with
clinical development are incurred in Phase III trials, which tend to be the
longest and largest studies conducted during the drug development process. After
the completion of a successful preclinical and clinical development program, a
New Drug Application (NDA) or Biologics License Application (BLA) must be filed
with the FDA, which includes, among other things, very large amounts of
preclinical and clinical data and results and manufacturing-related information
necessary to support requested approval of the product. The NDA/BLA must be
reviewed and approved by the FDA.

According to
industry statistics, it generally takes 10 to 15 years to research, develop and
bring to market a new prescription medicine in the United States. In light of
the steps and complexities involved, the successfuldevelopment of our potential products is highly uncertain. Actual
timelines and costs to develop and commercialize a product are subject to
enormous variability and are very difficult to predict. In addition, various
statutes and regulations also govern or influence the manufacturing, safety
reporting, labeling, storage, record keeping and marketing of each
product.

17

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The lengthy
process of seeking these regulatory reviews and approvals, and the subsequent
compliance with applicable statutes and regulations, require the expenditure of
substantial resources. Any failure by us to obtain, or any delay in obtaining,
regulatory approvals could materially adversely affect our business. In
responding to an NDA/BLA submission, the FDA may grant marketing approval, may
request additional information, may deny the application if it determines that
the application does not provide an adequate basis for approval, and may also
refuse to review an application that has been submitted if it determines that
the application does not provide an adequate basis for filing and review. We
cannot provide assurance that any approval required by the FDA will be obtained
on a timely basis, if at all.

For a more
complete discussion of the risks and uncertainties associated with completing
development of potential products, see the sub-section titled Delays in the
commencement of clinical testing of our current and potential product candidates
could result in increased costs to us and delay our ability to generate
revenues and Obtaining regulatory approvals to market our product candidates
in the United States and other countries is a costly and lengthy process and we
cannot predict whether or when we will be permitted to commercialize our product
candidates in Part II, Item 1A entitled Risk Factors and elsewhere in this
quarterly report.

General and Administrative
Expenses

General and
administrative expenses were $3.4 million for the three months ended March 31,
2009, compared to $4.0 million for the comparable 2008 period. The decrease in
general and administrative expenses for the 2009 first quarter compared to the
2008 first quarter was primarily the result of reduced patent legal costs of
$180,000 and reduced consulting costs of $140,000.We currently anticipate general and
administrative expenses to remain consistent with current levels.

Unrealized Gain (Loss) on Fair Value of
Derivatives

Unrealized
gain (loss) on fair value derivatives reflects a non-cash adjustment for changes
in fair value of warrants and options held by non-employees to purchase common
stock that are classified as current liabilities. Under Issue 00-19, derivatives
classified as assets or liabilities are marked to fair value at each financial
reporting date with any resulting unrealized gain (loss) recorded in the
condensed consolidated statements of operations. The derivatives continue to be
reported as an asset or liability until such time as the instruments are
exercised or expire or are otherwise modified to remove the provisions which
require them to be recorded as assets or liabilities, at which time these
instruments are marked to fair value and reclassified from assets or liabilities
to stockholders equity. We incurred a net unrealized gain on derivatives of
$77,000for
the three months ended March 31, 2009, compared to $406,000for the comparable 2008
period. The unrealized gain on derivatives for 2009 and 2008 primarily reflects
the decreasing value of derivative liabilities currently on the condensed
consolidated balance sheet based upon decreasing terms of outstanding
instruments and corresponding adjustments in volatility and interest rate
assumptions.

Interest and Other
Income

Interest
income was $525,000 for the three months ended March 31, 2009, compared to $1.9
million for the comparable 2008 period. The decrease in interest income for the
2009 first quarter compared to the 2008 first quarter was primarily due to
decreased interest rates. Interest earned in future periods will depend on the
size of our securities portfolio and prevailing interest rates.

Losses Recognized Under Equity Method
Investment

In August
2008, we exchanged our equity interest in the Start Licensing, Inc. (Start)
joint venture for equity interest in ViaGen, Inc. (ViaGen). In September 2008,
we provided a loan of $1.5 million to ViaGen in connection with ViaGen acquiring
an interest in an unrelated company. The proceeds of the loan did not fund prior
ViaGen losses and represents additional financial support to ViaGen. In
accordance with the equity method of accounting, we recognized losses of
$656,000 for our proportionate share of ViaGens losses for the three months
ended March 31, 2009 as an adjustment to the basis of the loan. Previously, we
had suspended the equity method of accountingfor
Start and ViaGen since our proportionate share of net losses exceeded the value
of our investment and we had no commitments to provide financial support to
either company.

18

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Interest and Other
Expense

Interest and
other expense was $52,000 for the three months ended March 31, 2009, compared to
$24,000for
the comparable 2008 period. The increase in interest and other expense for the
2009 first quarter compared to the 2008 first quarter was primarily due to
higher investment management charges.

Net Loss

Net loss was
$16.8 million for the three months ended March 31, 2009, compared to
$13.7million for the comparable 2008 period. The increase in net loss for the
2009 first quarter compared to the 2008 first quarter was primarily due to
decreased interest income, reduced revenues from milestones and recognition of
losses under equity method investments.

LIQUIDITY AND CAPITAL
RESOURCES

Cash,
restricted cash, cash equivalents and marketable securities at March 31, 2009
were $200.5 million, compared to $163.7 million at December 31, 2008. We have an
investment policy to invest these funds in liquid, investment grade securities,
such as interest-bearing money market funds, U.S. government and agency
securities, corporate notes, commercial paper, asset-backed securities and
municipal securities. Our investment portfolio does not contain securities with
exposure to sub-prime mortgages, collateralized debt obligations or auction rate
securities and we have not to date recognized an other-than-temporary impairment
on our marketable securities or any significant changes in aggregate fair value
that would impact our cash resources or liquidity. To date, we have not
experienced lack of access to our invested cash and cash equivalents; however,
we cannot provide assurances that access to our invested cash and cash
equivalents will not be impacted by adverse conditions in the financial markets.
The increase in cash, restricted cash, cash equivalents and marketable
securities in 2009 was primarily due to the receipt of $45.9 million in net
proceeds in February 2009 from an underwritten public offering of our common
stock.

We estimate
that our existing capital resources, interest income and equipment financing
facility will be sufficient to fund our current level of operations through at
least December 2010. However, our future capital requirements will be
substantial. Changes in our research and development plans or other changes
affecting our operating expenses or cash balances may result in the expenditure
of available resources before such time. Factors that may require us to use our
available capital resources sooner than we anticipate include:

- continued clinical development of our product
  candidates, GRN163L, GRNVAC1 and GRNOPC1;
- our ability to meaningfully reduce manufacturing
  costs of current product candidates;
- future clinical trial results;
- progress of product and clinical development of
  our other product candidates, such as GRNCM1, GRNIC1 and
  GRNVAC2;
- cost and timing of regulatory approvals;
  and
- filing, maintenance, prosecution, defense and
  enforcement of patent claims and other intellectual property
  rights.

If our
capital resources are insufficient to meet future capital requirements, we will
need to raise additional capital to fund our operations. We intend to seek
additional funding through strategic collaborations, public or private equity
financings, equipment loans or other financing sources that may be available.
However, we may be unable to raise sufficient additional capital when we need
it, on favorable terms or at all. If we are unable to obtain adequate funds on
reasonable terms, we may be required to curtail operations significantly or
obtain funds by entering into financing, supply or collaboration agreements on
unattractive terms or we may be required to relinquish rights to technology or
product candidates or to grant licenses on terms that are unfavorable to us.

Cash
Flows from Operating Activities.Net cash
used in operations for the three months ended March 31, 2009 and 2008 was $9.3
million and $12.9 million, respectively. The decrease in net cash used for
operations in 2009 was primarily the result of changes to current and noncurrent
liabilities.

Cash
Flows from Investing Activities.Net cash
used in investing activities was $21.1million for the three months ended March 31,
2009, compared to net cash provided by investing activities of $5.5 million for
the comparable 2008 period. The decrease in net cash provided by investing
activities reflected increased marketable securities purchases.

19

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As of March
31, 2009, we had approximately $500,000 available for borrowing under our
equipment financing facility. We intend to renew the commitment for a new
equipment financing facility in 2009 to further fund equipment purchases. If we
are unable to renew the commitment, we will use our cash resources for capital
expenditures.

Cash
Flows from Financing Activities.Net cash
provided by financing activities for the three months ended March 31, 2009 was
$46.7 million, compared to none for the comparable 2008 period. In February
2009, we completed a public offering of 7.25 million shares of our common stock
at a public offering price of $6.60 per share, resulting in net proceeds of
approximately $45.9 million after deducting underwriting discounts and
commissions and offering expenses.

Contractual Obligations

As of March 31, 2009 our contractual
obligations for the next five years, and thereafter were as follows:

|                                         |  | Principal Payments Due by
      Period
|---------------------------------------- |  | --------------------------------------
|                                         |  |                                       
|Contractual Obligations
      (1)        |  | Total                                 
|                                         |  | (Amounts in thousands)                
|Equipment leases                         |  | $                                     
|Operating leases
      (2)               |  |                                       
|Research funding (3)                     |  |                                       
|Total
      contractual cash obligations |  | $                                     

|(1) |  | This table does not include any
      milestone payments under research collaborations or license agreements as
      the timing and likelihood of such payments are not known. In addition,
      this table does not include payments under our severance plan if there
      were a change in control of the company or severance payments to key
      employees under involuntary termination.                                                                                                                                                                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | In March 2008, we issued 742,158
      shares of our common stock to the lessor of our premises at 200 and 230
      Constitution Drive in payment of our monthly rental obligation from August
      1, 2008 through July 31, 2012. In May 2007, we issued 210,569 shares of
      our common stock to the lessor of our premises at 149 Commonwealth Drive
      in payment of our monthly rental obligation from May 1, 2007 through April
      30, 2010. The fair value of the common stock issuances has been recorded
      as a prepaid asset and is being amortized to rent expense on a
      straight-line basis over the lease periods.
|   
|(3) |  | Research funding is comprised of
      sponsored research and license commitments at various laboratories around
      the world, including commitments of our majority-owned subsidiary,
      TAT.                                                                                                                                                                                                                                                                                                                                                                                                                                               

Off-Balance Sheet
Arrangements

None

ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

The
following discussion about our market risk disclosures contains forward-looking
statements. Actual results could differ materially from those projected in the
forward-looking statements. We are exposed to market risk related to changes in
interest rates and foreign currency exchange rates. We do not use derivative
financial instruments for speculative or trading purposes.

Credit
Risk. We place our cash, restricted cash,
cash equivalents, and marketable securities with six financial institutions in
the United States. Deposits with banks may exceed the amount of insurance
provided on such deposits. While we monitor the cash balances in our operating
accounts and adjust the cash balances as appropriate, these cash balances could
be impacted if the underlying financial institutions fail or could be subject to
other adverse conditions in the financial markets. To date, we have not
experienced any loss or lack of access to cash in our operating accounts or to
our cash equivalents and marketable securities in our investment portfolios.
Financial instruments that potentially subject us to concentrations of credit
risk consist primarily of marketable securities. Marketable securities currently
consist of U.S. Treasury securities, U.S. government-sponsored enterprise
securities and commercial paper. Our investment policy, approved by our Board of
Directors, limits the amount we may invest in any one type of investment issuer,
thereby reducing credit risk concentrations.

20

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*Interest Rate
Sensitivity*. The fair value of our cash
equivalents and marketable securities at March 31, 2009 was $198.6 million.
These investments include $124.5 million of cash equivalents which are due in
less than 90 days and $74.1 million of short-term investments which are due in
less than one year. Our investment policy is to manage our marketable securities
portfolio to preserve principal and liquidity while maximizing the return on the
investment portfolio through the full investment of available funds. We
diversify the marketable securities portfolio by investing in multiple types of
investment grade securities. We primarily invest our marketable securities
portfolio in short-term securities with at least an investment grade rating to
minimize interest rate and credit risk as well as to provide for an immediate
source of funds. Although changes in interest rates may affect the fair value of
the marketable securities portfolio and cause unrealized gains or losses, such
gains or losses would not be realized unless the investments are sold. Due to
the nature of our investments, which are primarily U.S. Treasury securities,
U.S. government-sponsored enterprise securities, commercial paper and money
market funds, we have concluded that there is no material market risk
exposure.

Foreign
Currency Exchange Risk. Because we translate
foreign currencies into United States dollars for reporting purposes, currency
fluctuations can have an impact, though generally immaterial, on our results. We
believe that our exposure to currency exchange fluctuation risk is insignificant
primarily because our wholly-owned international subsidiary, Geron Bio-Med Ltd.,
satisfies its financial obligations almost exclusively in its local currency. As
of March 31, 2009, there was an immaterial currency exchange impact from our
intercompany transactions. As of March 31, 2009, we did not engage in foreign
currency hedging activities.

ITEM 4. CONTROLS AND
PROCEDURES

(a)Evaluation
of Disclosure Controls and Procedures. The
Securities and Exchange Commission defines the term disclosure controls and
procedures to mean a companys controls and other procedures that are designed
to ensure that information required to be disclosed in the reports that it files
or submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported, within the time periods specified in the Commissions
rules and forms. Our Chief Executive Officer and our Chief Financial Officer
have concluded, based on the evaluation of the effectiveness of our disclosure
controls and procedures by our management, with the participation of our Chief
Executive Officer and our Chief Financial Officer, as of the end of the period
covered by this report, that our disclosure controls and procedures were
effective for this purpose.

(b)Changes in Internal Controls Over Financial Reporting. There was no change in our internal control over financial
reporting for the three months ended March 31, 2009 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

It should be
noted that any system of controls, however well designed and operated, can
provide only reasonable assurance, and not absolute assurance, that the
objectives of the system are met. In addition, the design of any control system
is based in part upon certain assumptions about the likelihood of future events.
Because of these and other inherent limitations of control systems, there can be
no assurance that any design will succeed in achieving its stated goals in all
future circumstances.

PART II. OTHER
INFORMATION

ITEM 1. LEGAL
PROCEEDINGS

None

ITEM 1A. RISK FACTORS

Our business
is subject to various risks, including those described below. You should
carefully consider these risk factors, together with all of the other
information included in this Form 10-Q. Any of these risks could materially
adversely affect our business, operating results and financial
condition.

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RISKS RELATED TO OUR
BUSINESS

Our business is at an early stage of
development.

Our business
is at an early stage of development, in that we do not yet have product
candidates in late-stage clinical trials or on the market. We have begun
clinical testing of our lead anti-cancer drug, GRN163L, in patients with chronic
lymphoproliferative diseases, solid tumor malignancies, non-small cell lung
cancer, breast cancer and multiple myeloma. We have begun clinical testing of
our telomerase cancer vaccine, GRNVAC1, in patients with acute myelogenous
leukemia. We have no other product candidates in clinical testing. We have
received FDA clearance to begin the worlds first human clinical trial of a
hESC-based therapy: GRNOPC1 for acute spinal cord injury. Our ability to develop
product candidates that progress to and through clinical trials is subject to
our ability to, among other things:

- succeed in our research and development
  efforts;
- select therapeutic compounds or cell therapies for
  development;
- obtain required regulatory approvals;
- manufacture product candidates; and
- collaborate successfully with clinical trial sites, academic
  institutions, physician investigators, clinical research organizations and
  other third parties.

Potential
lead drug compounds or other product candidates and technologies require
significant preclinical and clinical testing prior to regulatory approval in the
United States and other countries. Our product candidates may prove to have
undesirable and unintended side effects or other characteristics adversely
affecting their safety, efficacy or cost-effectiveness that could prevent or
limit their commercial use. In addition, our product candidates may not prove to
be more effective for treating disease or injury than current therapies.
Accordingly, we may have to delay or abandon efforts to research, develop or
obtain regulatory approvals to market our product candidates. In addition, we
will need to determine whether any of our potential products can be manufactured
in commercial quantities at an acceptable cost. Our research and development
efforts may not result in a product that can be or will be approved by
regulators or marketed successfully. Physicians may not prescribe our products,
or patients or third party payors may not accept such products. Competitors may
have proprietary rights which prevent us from marketing our products or they may
sell similar, superior or lower-cost products. Because of the significant
scientific, regulatory and commercial milestones that must be reached for any of
our development programs or product candidates to be successful, any program or
product candidate may be abandoned, even after we have expended significant
resources, such as our investments in telomerase technology, human embryonic
stem cells, GRN163L, GRNVAC1 and GRNOPC1, which could adversely affect our
business and cause a sharp drop in our stock price.

The science
and technology of telomere biology and telomerase, human embryonic stem cells
and nuclear transfer are relatively new. There is no precedent for the
successful commercialization of therapeutic product candidates based on our
technologies. These development programs are therefore particularly risky. In
addition, we, our licensees or our collaborators must undertake significant
research and development activities to develop product candidates based on our
technologies, which will require additional funding and may take years to
accomplish, if ever.

Restrictions on the use of human
embryonic stem cells, political commentary and the ethical and social
implications of research involving human embryonic stem cells could prevent us
from developing or gaining acceptance for commercially viable products based
upon such stem cells and adversely affect the market price of our common stock.

Some of our
most important programs involve the use of stem cells that are derived from
human embryos. The use of human embryonic stem cells gives rise to ethical and
social issues regarding the appropriate use of these cells. Our research related
to human embryonic stem cells may become the subject of adverse commentary or
publicity, which could significantly harm the market price for our common
stock.

Some
political and religious groups have voiced opposition to our technology and
practices. We use stem cells derived from human embryos that have been created
forin vitrofertilization procedures but are no longer desired or suitable for that
use and are donated with appropriate informed consent. Many research
institutions, including some of our scientific collaborators, have adopted
policies regarding the ethical use of human embryonic tissue. These policies may
have the effect of limiting the scope of research conducted using human
embryonic stem cells, thereby impairing our ability to conduct research in this
field.

22

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Furthermore,
on March 9, 2009, President Obama issued Executive Order 13505, entitled
Removing Barriers to Responsible Scientific Research Involving Human Stem
Cells (the Executive Order). As a result, the Secretary of Health and Human
Services, through the Director of the National Institutes of Health (NIH), is
required to review existing NIH guidelines as well as other widely-recognized
guidelines relating to human stem cell research and issue new NIH guidance
within 120 days of the date of the Executive Order. The new guidance will, among
other things, state whether federal funding for research on new stem cell lines
will be allowed. As of March 31, 2009, the new guidelines had not been issued.
Certain states are considering enacting, or already have enacted, legislation
relating to stem cell research, including California whose voters approved
Proposition 71 to provide state funds for stem cell research in November 2004.
In the United Kingdom and other countries, the use of embryonic or fetal tissue
in research (including the derivation of human embryonic stem cells) is
regulated by the government, whether or not the research involves government
funding.

Government-imposed restrictions with respect to use of embryos or human
embryonic stem cells in research and development could have a material adverse
effect on us, including:

- harming our ability to establish critical
  partnerships and collaborations;
- delaying or preventing progress in our research, product
  development or clinical testing;
- preventing commercialization of therapies derived from human
  embryonic stem cells; and
- causing a decrease in the price of our stock.

RISKS RELATED TO OUR FINANCIAL
POSITION AND NEED FOR ADDITIONAL FINANCING

We have a history of losses and
anticipate future losses, and continued losses could impair our ability to
sustain operations.

We have
incurred operating losses every year since our operations began in 1990. As of
March 31, 2009, our accumulated deficit was approximately $523.7 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 our
development efforts and clinical testing activities continue, our operating
losses may increase in size.

Substantially all of our revenues to date have been research support
payments under collaboration agreements and revenues from our licensing
arrangements. We may be unsuccessful in entering into any new corporate
collaboration or license agreement that results in revenues. We do not expect
that the revenues generated from these arrangements will be sufficient alone to
continue or expand our research or development activities and otherwise sustain
our operations.

While we
receive royalty revenue from licenses, we do not currently expect to receive
sufficient royalty revenues from these licenses to sustain our operations. Our
ability to continue or expand our research and development activities and
otherwise sustain our operations is dependent on our ability, alone or with
others, to, among other things, manufacture and market therapeutic
products.

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 equity, which may not be
offset by future financings. We will need to generate significant revenues to
achieve profitability. We may not be able to generate these revenues, and we may
never achieve profitability. Our failure to achieve profitability could
negatively impact the market price of our common stock. Even if we do become
profitable, we cannot assure you that we would be able to sustain or increase
profitability on a quarterly or annual basis.

We will need additional capital to
conduct our operations and develop our product candidates, and our ability to
obtain the necessary funding is uncertain.

We will
require substantial capital resources in order to conduct our operations and
develop our product candidates, and we cannot assure you that our existing
capital resources, interest income and equipment financing arrangement will be
sufficient to fund our current and planned operations. The timing and degree of
any future capital requirements will depend on many factors, including:

- the accuracy of the assumptions underlying our
  estimates for our capital needs in 2009 and beyond;
- the magnitude and scope of our research and development
  programs;
- the progress we make in our research and
  development programs, preclinical development and clinical
  trials;
- our ability to establish, enforce and maintain strategic
  arrangements for research, development, clinical testing, manufacturing and
  marketing;
- the number and type of product candidates that we
  pursue;
- the time and costs involved in obtaining regulatory approvals
  and clearances; and
- the costs involved in preparing, filing, prosecuting,
  maintaining, defending and enforcing patent claims.

23

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We do not
have any committed sources of capital. Additional financing through strategic
collaborations, public or private equity financings, capital lease transactions
or other financing sources may not be available on acceptable terms, or at all.
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.
Additional equity financings, if we obtain them, could result in significant
dilution to stockholders. Further, in the event that additional funds are
obtained through arrangements with collaborative partners, these arrangements
may require us to relinquish rights to some of our technologies, product
candidates or proposed products that we would otherwise seek to develop and
commercialize ourselves. If sufficient capital is not available, we may be
required to delay, reduce the scope of or eliminate one or more of our programs,
any of which could have a material adverse effect on our business.

RISKS RELATED TO CLINICAL AND
COMMERCIALIZATION ACTIVITIES

Delays in the commencement of
clinical testing of our current and potential product candidates could result in
increased costs to us and delay our ability to generate revenues.

The commencement of clinical trials
can be delayed for a variety of reasons, including delays in:

- demonstrating sufficient safety and efficacy to
  obtain regulatory clearance to commence a clinical trial;
- reaching agreement on acceptable terms with our collaborators
  on all aspects of the clinical trial, including the contract research
  organizations and the trial sites;
- reaching agreement on acceptable terms with prospective
  contract research organizations and trial sites;
- manufacturing sufficient quantities or producing drugs
  meeting our quality standards of a product candidate;
- obtaining approval of an Investigational New Drug (IND)
  application or proposed trial design from the Food and Drug Administration
  (FDA); and
- obtaining institutional review board approval to conduct a
  clinical trial at a prospective site.

In addition, clinical trials may be
delayed due to insufficient patient enrollment, which is a function of many
factors, including the size and nature of the patient population, the nature of
the protocol, the proximity of patients to clinical sites, the availability of
effective treatments for the relevant disease, and the eligibility criteria for
the clinical trial. Delays in commencing clinical testing of our product
candidates could have a material adverse effect on our business.

We do not have experience as a
company conducting large-scale clinical trials, or in other areas required for
the successful commercialization and marketing of our product
candidates.

Preliminary
results from clinical trials of GRN163L and GRNVAC1 may not be indicative of
successful outcomes in later stage trials. Negative or limited results from any
current or future clinical trials could delay or prevent further development of
our product candidates which would adversely affect our business.

We have no
experience as a company in conducting large-scale, late stage clinical trials,
and our experience with early-stage clinical trials with small numbers of
patients is limited. In part because of this limited experience, we cannot be
certain that planned clinical trials will begin or be completed on time, if at
all. Large-scale trials would require either additional financial and management
resources, or reliance on third-party clinical investigators, clinical research
organizations (CROs) or consultants. Relying on third-party clinical
investigators or CROs may force us to encounter delays that are outside of our
control. Any such delays could have a material adverse effect on our
business.

We also do
not currently have marketing and distribution capabilities for our product
candidates. Developing an internal sales and distribution capability would be an
expensive and time-consuming process. We may enter into agreements with third
parties that would be responsible for marketing and distribution. However, these
third parties may not be capable of successfully selling any of our product
candidates. The inability to commercialize and market our product candidates
could materially affect our business.

24

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Obtaining regulatory approvals to
market our product candidates in the United States and other countries is a
costly and lengthy process and we cannot predict whether or when we will be
permitted to commercialize our product candidates.

Federal,
state and local governments in the United States and governments in other
countries have significant regulations in place that govern many of our
activities and may prevent us from creating commercially viable products from
our discoveries. The regulatory process, particularly for biopharmaceutical
product candidates like ours, is uncertain, can take many years and requires the
expenditure of substantial resources.

Our
potential product candidates will require extensive preclinical and clinical
testing prior to submission of any regulatory application for commercial sales.
In particular, human pharmaceutical therapeutic product candidates are subject
to rigorous requirements of the FDA in the United States and similar health
authorities in other countries in order to demonstrate safety and efficacy. Data
obtained from preclinical and clinical activities is susceptible to varying
interpretations that could delay, limit or prevent regulatory agency approvals.
In addition, delays or rejections may be encountered as a result of changes in
regulatory agency policy during the period of product development and/or the
period of review of any application for regulatory agency approval for a product
candidate.

Any product
candidate that we or our collaborators develop must receive all relevant
regulatory agency approvals before it may be marketed in the United States or
other countries. Obtaining regulatory approval is a lengthy, expensive and
uncertain process. Because certain of our product candidates involve the
application of new technologies or are based upon a new therapeutic approach,
they may be subject to substantial additional review by various government
regulatory authorities, and, as a result, the process of obtaining regulatory
approvals for them may proceed more slowly than for product candidates based
upon more conventional technologies.

Delays in obtaining regulatory
agency approvals could:

- significantly harm the marketing of any products
  that we or our collaborators develop;
- impose costly procedures upon our activities or the
  activities of our collaborators;
- diminish any competitive advantages that we or our
  collaborators may attain; or
- adversely affect our ability to receive royalties and
  generate revenues and profits.

Even if we
commit the necessary time and resources, the required regulatory agency
approvals may not be obtained for any product candidates developed by us or in
collaboration with us. If we obtain regulatory agency approval for a new
product, this approval may entail limitations on the indicated uses for which it
can be marketed that could limit the potential commercial use of the
product.

Failure to achieve continued
compliance with government regulation over approved products could delay or halt
commercialization of our products.

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 withdrawal of the product
from the market. The sale by us or our collaborators of any commercially viable
product will be subject to government regulation from several standpoints,
including the processes of:

- manufacturing;
- advertising and promoting;
- selling and marketing;
- labeling; and
- distribution.

If, and to the extent that, we are
unable to comply with these regulations, our ability to earn revenues will be
materially and negatively impacted.

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Failure to
comply with regulatory requirements can result in severe civil and criminal
penalties, including but not limited to:

- recall or seizure of products;
- injunction against manufacture, distribution, sales and
  marketing; and
- criminal prosecution.

The imposition of any of these
penalties or other commercial limitations could significantly impair our
business, financial condition and results of operations.

RISKS RELATED TO PROTECTING OUR
INTELLECTUAL PROPERTY

Impairment of our intellectual
property rights may adversely affect the value of our technologies and product
candidates and limit our ability to pursue their development.

Protection
of our proprietary technology is critically important to our business. Our
success will depend in part on our ability to obtain and enforce our patents and
maintain trade secrets, both in the United States and in other countries.
Further, our patents may be challenged, invalidated or circumvented, and our
patent rights may not provide proprietary protection or competitive advantages
to us. In the event that we are unsuccessful in obtaining and enforcing patents,
our business would be negatively impacted.

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 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 technology, or enforce issued patents, is
uncertain. In the United States, recent court decisions in patent cases as well
as proposed legislative changes to the patent system only exacerbate this
uncertainty. Furthermore, significant amendments to the regulations governing
the process of obtaining patents were recently proposed by the United States
Patent and Trademark Office (the Patent Office). These amendments were widely
regarded as detrimental to the interests of biotechnology and pharmaceutical
companies. The implementation of the amendments was blocked by a court
injunction requested by a pharmaceutical company. At this time, the Patent
Office is challenging the court decision through an appeals process, and we do
not know if the appeal will be successful or whether or when the Patent Office
might seek to reintroduce the amendments in a modified form.

In Europe,
the European Patent Convention prohibits the granting of European patents for
inventions that concern uses of human embryos for industrial or commercial
purposes. The European Patent Office (EPO) is presently interpreting this
prohibition broadly, and is applying it to reject patent claims that pertain to
hESCs. In a recent decision of the EPO Enlarged Board of Appeals, a patent
application owned by the Wisconsin Alumni Research Foundation (WARF) and
containing broad claims to human embryonic stem cells as compositions of matter
was held to be unpatentable. Geron holds a worldwide license under this patent
family; the decision does mean that this WARF patent family will not afford
protection to Gerons products in Europe. However, the reason given by the EPO
for the decision was narrowly focused: the EPO found the claims objectionable on
the basis that at the time that WARF filed the patent application it was
necessary to use a human embryo to obtain hESCs since no cell lines were
available. In contrast, the hESCs that we use, and which we employed in the
technologies claimed in our own European patent applications, were sourced from
established hESC lines. Consequently, the decision in the WARF case does not
directly address the patentability of the subject matter in our filings.
However, at this time we cannot predict what view the EPO will take on our
applications and therefore we do not yet know whether or to what extent we will
be able to obtain patent protection for our hESC technologies in Europe. If we
are unable to protect our inventions related to hESCs in Europe, our business
would be negatively impacted.

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 our future success.

Challenges to our patent rights can
result in costly and time-consuming legal proceedings that may prevent or limit
development of our product candidates.

Where
several parties seek 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. Moreover, parties that receive an adverse decision in an interference
can lose important patent rights. Our pending patent applications, or our issued
patents, may be drawn into interference proceedings which may delay or prevent
the issuance of patents, or result in the loss of issued patent rights. As more
groups become engaged in scientific research and product development in the
areas of telomerase biology and embryonic stem cells, the risk of our patents
being challenged through patent interferences, oppositions, reexaminations or
other means will likely increase.

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The
interference process can also be used to challenge a patent that has been issued
to another party. For example, in 2004 we were party to two interferences
declared by the Patent Office at our request. These interferences involved two
of our pending applications relating to nuclear transfer technology and two
issued patents, held by the University of Massachusetts (U. Mass) and licensed
to Advanced Cell Technology, Inc. (ACT) of Worcester, Massachusetts. We
requested these interferences in order to clarify our patent rights to this
technology and to facilitate licensing to companies wishing to utilize this
technology in animal cloning. The Board of Patent Appeals and Interferences
issued final judgments in each of these cases, finding in both instances that
all of the claims in the U. Mass patents in question were unpatentable, and
upholding the patentability of Gerons pending claims. These judgments were
appealed by U. Mass and ACT, but the appeals have now been dismissed as part of
a settlement agreement, resulting in invalidation of the U. Mass patents
involved.

Outside of
the United States, certain jurisdictions, such as Europe, New Zealand and
Australia, permit oppositions to be filed against the granting of patents.
Because our intent is to commercialize products internationally, securing both
proprietary protection and freedom to operate outside of the United States is
important to our business. We are 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. For example, we have recently
been involved in two patent oppositions before the European Patent Office (EPO)
with a Danish company, Pharmexa. Pharmexa (which acquired the Norwegian company
GemVax in 2005) was developing a cancer vaccine that employs a short telomerase
peptide to induce an immune response against telomerase and was conducting a
Phase III clinical trial. Pharmexa obtained a European patent with broad claims
to the use of telomerase vaccines for the treatment of cancer, and Geron opposed
that patent in 2004. In 2005, the Opposition Division (OD) of the EPO revoked
the claims originally granted to Pharmexa, but permitted Pharmexa to add new,
narrower claims limited to five specific small peptide fragments of telomerase.
The decision was appealed to the Technical Board of Appeals (TBA). In August
2007, the TBA ruled, consistent with the decision of the OD, that Pharmexa was
not entitled to the originally granted broad claims but was only entitled to the
narrow claims limited to the five small peptides.

In parallel,
Pharmexa opposed a European patent held by Geron, the claims of which cover many
facets of human telomerase, including the use of telomerase peptides in cancer
vaccines. In June 2006, the OD of the EPO revoked three of the granted claims in
Gerons patent, specifically the three claims covering telomerase peptide cancer
vaccines. We have appealed that decision to the TBA, and that appeal is still
pending. Because this appeal is ongoing, the outcome cannot be determined at
this time. We are also seeking to obtain patent coverage in Europe for
telomerase peptides through a European divisional patent application. If those
patent claims are issued, they too may be subject to an opposition proceeding.
In late 2008, Pharmexa reported that it sold its telomerase vaccine program to a
Korean company, KAEL Co. Ltd.

European
opposition and appeal proceedings can take several years to reach final
decision. The oppositions discussed above reflect the complexity of the patent
landscape in which we operate, and illustrate the risks and uncertainties. We
are also currently involved in other patent opposition proceedings in Europe and
Australia.

Patent
opposition proceedings are not currently available in the U.S. patent system,
but legislation has been proposed to introduce them. However, issued U.S.
patents can be reexamined by the Patent Office at the request of a third party.
Patents owned or licensed by Geron may therefore be subject to reexamination. As
in any legal proceeding, the outcome of patent reexaminations is uncertain, and
a decision adverse to our interests could result in the loss of valuable patent
rights.

In July
2006, requests were filed on behalf of the Foundation for Taxpayer and Consumer
Rights (now renamed as Consumer Watchdog) for reexamination of three issued
U.S. patents owned by WARF and relating to human embryonic stem cells. These
three patents (U.S. Patent Nos. 5,843,780, 6,200,806 and 7,029,913), which are
the U.S. equivalents of the European WARF case discussed above, are licensed to
Geron pursuant to a January 2002 license agreement with WARF. The license
agreement conveys exclusive rights to Geron under the WARF patents for the
development and commercialization of therapeutics based on neural cells,
cardiomyocytes and pancreatic islet cells, derived from human embryonic stem
cells, as well as nonexclusive rights for other product opportunities. In
October 2006, the Patent Office initiated the reexamination proceedings. After
initially rejecting the patent claims, the Patent Office recently issued
decisions in all three cases upholding the patentability of the claims. The
decisions to uphold the 5,843,780 and 6,200,806 patents are final and not
subject to further appeal. Consumer Watchdog has filed a notice of appeal
against the decision on the 7,029,913 patent. We cooperated with WARF in these
reexamination actions and expect that WARF will continue to vigorously defend
its patent position in this appeal. While the decisions in these reexamination
proceedings to date have all been favorable to our patent position, the outcome
of the appeal or of any future reexamination proceedings cannot be determined at
this time. Reduction or loss of claim scope in these WARF embryonic stem cell
patents would negatively impact Gerons proprietary position in this
technology.

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Successful
challenges to our patents through interferences, oppositions or reexamination
proceedings could result in a loss of patent rights in the relevant
jurisdiction(s). If we are unsuccessful in actions we bring against the patents
of other parties, we may be subject to litigation, or otherwise prevented from
commercializing potential products in the relevant jurisdiction, or may be
required to obtain licenses to those patents or develop or obtain alternative
technologies, any of which could harm our business. Furthermore, if such
challenges to our patent rights are not resolved promptly in our favor, our
existing business relationships may be jeopardized and we could be delayed or
prevented from entering into new collaborations or from commercializing certain
products, which could materially harm our business.

If we fail to meet our obligations
under license agreements, we may lose our rights to key technologies on which
our business depends.

Our business
depends on several critical technologies that are based in part on patents
licensed from third parties. Those third-party license agreements impose
obligations on us, such as payment obligations and obligations to diligently
pursue development of commercial products under the licensed patents. If a
licensor believes that we have failed to meet our obligations under a license
agreement, the licensor could seek to limit or terminate our license rights,
which could lead to costly and time-consuming litigation and, potentially, a
loss of the licensed rights. During the period of any such litigation our
ability to carry out the development and commercialization of potential products
could be significantly and negatively affected. If our license rights were
restricted or ultimately lost, our ability to continue our business based on the
affected technology platform would be severely adversely affected.

We may be subject to litigation that
will be costly to defend or pursue and uncertain in its
outcome.

Our business
may 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. That litigation is likely to be
expensive and may require a significant amount of managements time and
attention, at the expense of other aspects of our business. 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 affect our legal or contractual rights, which could have a significant
adverse effect on our business.

Patent
litigation may also be necessary to enforce patents issued or licensed to us or
to determine the scope and validity of our proprietary rights or the proprietary
rights of others. We may not be successful in any patent litigation. Patent
litigation can be extremely expensive and time-consuming, even if the outcome is
favorable to us. An adverse outcome in a patent litigation, patent opposition,
patent interference, or any other proceeding in a court or patent office could
subject our business to significant liabilities to other parties, require
disputed rights to be licensed from other parties or require us to cease using
the disputed technology, any of which could severely harm our
business.

We may be subject to infringement
claims that are costly to defend, and which may limit our ability to use
disputed technologies and prevent us from pursuing research and development or
commercialization of potential products.

Our
commercial success depends significantly on our ability to operate without
infringing patents and the proprietary rights of others. Our technologies may
infringe the patents or proprietary rights of others. In addition, we may become
aware of discoveries and technology controlled by third parties that are
advantageous to our programs. In the event our technologies infringe the rights
of others or we require the use of discoveries and technology controlled by
third parties, we may be prevented from pursuing research, development or
commercialization of potential products or may be required to obtain licenses to
those patents or other proprietary rights or develop or obtain alternative
technologies. We have obtained licenses from several universities and companies
for technologies that we anticipate incorporating into our potential products,
and we initiate negotiation for licenses to other technologies as the need or
opportunity arises. We may not be able to obtain a license to patented
technology on commercially favorable terms, or at all. If we do not obtain a
necessary license, we may need to redesign our technologies or obtain rights to
alternate technologies, the research and adoption of which could cause delays in
product development. In cases where we are unable to license necessary
technologies, we could be prevented from developing certain potential products.
Our failure to obtain alternative technologies or a license to any technology
that we may require to research, develop or commercialize our product candidates
would significantly and negatively affect our business.

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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.

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 assure you 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.

RISKS RELATED TO OUR RELATIONSHIPS
WITH THIRD PARTIES

We depend on other parties to help
us develop, manufacture and test our product candidates, and our ability to
develop and commercialize potential products may be impaired or delayed if
collaborations are unsuccessful.

Our strategy
for the development, clinical testing and commercialization of our product
candidates requires that we enter into collaborations with corporate partners,
licensors, licensees and others. We are dependent upon the subsequent success of
these other parties in performing their respective responsibilities and the
continued cooperation of our partners. By way of examples: Merck is developing
cancer vaccines targeted to telomerase other than the dendritic cell-based
vaccines that we are developing and Sienna is developing cancer diagnostics
using our telomerase technology. Our collaborators may not cooperate with us or
perform their obligations under our agreements with them. We cannot control the
amount and timing of our collaborators resources that will be devoted to
activities related to our collaborative agreements with them. Our collaborators
may choose to pursue existing or alternative technologies in preference to those
being developed in collaboration with us.

Under agreements with other parties,
we may rely significantly on them to, among other activities:

- conduct research and development activities in
  conjunction with us;
- design and conduct advanced clinical trials in the event that
  we reach clinical trials;
- fund research and development activities with
  us;
- manage and license certain patent rights;
- pay us fees upon the achievement of milestones;
  and
- market with us any commercial products that result from our
  collaborations.

The
development and commercialization of potential products will be delayed if
collaborators or other partners fail to conduct these activities in a timely
manner or at all. In addition, our collaborators could terminate their
agreements with us and we may not receive any development or milestone payments.
If we do not achieve milestones set forth in the agreements, or if our
collaborators breach or terminate their collaborative agreements with us, our
business may be materially harmed.

We also rely
on other companies for certain process development, manufacturing or other
technical scientific work, especially with respect to our GRN163L, GRNVAC1,
GRNOPC1 and GRNCM1 programs. We have contracts with these companies that specify
the work to be done and results to be achieved, but we do not have direct
control over their personnel or operations. If these companies do not perform
the work which they were assigned, our ability to develop or manufacture our
product candidates could be significantly harmed.

Our reliance on the activities of
our non-employee consultants, research institutions, and scientific contractors,
whose activities are not wholly within our control, may lead to delays in
development of our product candidates.

We rely
extensively upon and have relationships with scientific consultants at academic
and other institutions, some of whom conduct research at our request, and other
consultants who assist us in formulating our research and development and
clinical strategy or other matters. These consultants are not our employees and
may have commitments to, or consulting or advisory contracts with, other
entities that may limit their availability to us. We have limited control over
the activities of these consultants and, except as otherwise required by our
collaboration and consulting agreements, can expect only limited amounts of
their time to be dedicated to our activities.

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In addition,
we have formed research collaborations with many academic and other research
institutions throughout the world. These research facilities may have
commitments to other commercial and non-commercial entities. We have limited
control over the operations of these laboratories and can expect only limited
amounts of their time to be dedicated to our research goals.

If any of
these third parties are unable or refuse to contribute to projects on which we
need their help, our ability to generate advances in our technologies and
develop our product candidates could be significantly harmed.

RISKS RELATED TO COMPETITIVE FACTORS

The loss of key personnel could slow
our ability to conduct research and develop product
candidates.

Our future
success depends to a significant extent on the skills, experience and efforts of
our executive officers and key members of our scientific staff. We face intense
competition for qualified individuals from numerous pharmaceutical,
biopharmaceutical and biotechnology companies, as well as academic and other
research institutions. We may be unable to retain our current personnel or
attract or assimilate other highly qualified management and scientific personnel
in the future on acceptable terms. The loss of any or all of these individuals
could harm our business and might significantly delay or prevent the achievement
of research, development or business objectives.

Our products are likely to be
expensive to manufacture, and they may not be profitable if we are unable to
significantly reduce the costs to manufacture them.

Our
telomerase inhibitor compound, GRN163L, our telomerase cancer vaccine, GRNVAC1,
and our hESC-based products are likely to be more expensive to manufacture than
most other drugs currently on the market today. Oligonucleotides are relatively
large molecules with complex chemistry, and the cost of manufacturing an
oligonucleotide like GRN163L is greater than the cost of making most
small-molecule drugs. Our present manufacturing processes are conducted at a
modest scale and we hope to substantially reduce manufacturing costs through
process improvements, as well as through scale increases. If we are not able to
do so, however, and, depending on the pricing of the potential product, the
profit margin on the telomerase inhibitor may be significantly less than that of
most drugs on the market today.

GRNVAC1 is
an autologous therapy that is produced from a patients blood using a unique
process that generates highly activated dendritic cells that contain RNA coding
for the protein component of telomerase. Since the treatment is
patient-specific, the manufacturing costs are higher than under a scalable
production environment. We are developing procedures to differentiate hESCs to
dendritic cells as an alternative to isolating dendritic cells from each
patient. The hESC-derived dendritic cells could be produced scalably and could
serve as a widely useful vaccine delivery vehicle. If we are unable to scalably
produce dendritic cells at a lower manufacturing cost, the cost for GRNVAC1 may
reduce the affordability of the therapy for patients and reduce our potential
profitability.

Our
manufacturing processes for differentiated cells from hESCs are conducted at a
small scale and at a high cost per unit measure. The cell-based therapies we are
developing based on hESCs will probably require large quantities of cells. We
continue to develop processes to scale up production of the cells in a
cost-effective way. We may not be able to charge a high enough price for any
cell therapy product we develop, even if it is safe and effective, to make a
profit. If we are unable to realize significant profits from our potential
product candidates, our business would be materially harmed.

Some of our competitors may develop
technologies that are superior to or more cost-effective than ours, which may
impact the commercial viability of our technologies and which may significantly
damage our ability to sustain operations.

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 that are the focus of our programs in oncology and human embryonic
stem cell therapies, including the study of telomeres, telomerase, human
embryonic stem cells, and nuclear transfer. In addition, other products and
therapies that could compete directly with the product candidates that we are
seeking to develop and market currently exist or are being developed by
pharmaceutical and biopharmaceutical companies and by academic and other
research organizations.

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Many companies
are developing alternative therapies to treat cancer and, in this regard, are
competitors of ours. According to public data from the FDA and NIH, there are
more than 200 approved anti-cancer products on the market in the United States,
and several thousand in clinical development.

Many of the
pharmaceutical companies developing and marketing these competing products
(including GlaxoSmithKline, Bristol-Myers Squibb Company and Novartis AG, among
others) have significantly greater financial resources and expertise than we do
in:

- research and
  development;
- manufacturing;
- preclinical and clinical testing;
- obtaining regulatory approvals;
  and
- marketing and distribution.

Smaller companies
may also prove to be significant competitors, particularly through collaborative
arrangements with large and established companies. 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 programs.

In addition to the above factors, we expect to face competition in the
following areas:

- product efficacy and safety;
- the timing and scope of regulatory
  consents;
- availability of resources;
- reimbursement coverage;
- price; and
- patent position, including potentially dominant
  patent positions of others.

As a result of
the foregoing, our competitors may develop more effective or more affordable
products, or achieve earlier patent protection or product commercialization than
we do. Most significantly, competitive products may render any product
candidates that we develop obsolete, which would negatively impact our business
and ability to sustain operations.

To be successful, our product
candidates must be accepted by the health care community, which can be very slow
to adopt or unreceptive to new technologies and products.

Our product
candidates and those developed by our collaborators, if approved for marketing,
may not achieve market acceptance since hospitals, physicians, patients or the
medical community in general may decide not to accept and utilize these
products. The product candidates that we are attempting to develop represent
substantial departures from established treatment methods and will compete with
a number of conventional drugs and therapies manufactured and marketed by major
pharmaceutical companies. The degree of market acceptance of any of our
developed potential products will depend on a number of factors, including:

- our establishment and demonstration to the medical
  community of the clinical efficacy and safety of our product
  candidates;
- our ability to create products that are superior
  to alternatives currently on the market;
- our ability to establish in the medical community
  the potential advantage of our treatments over alternative treatment methods;
  and
- reimbursement policies of government and
  third-party payors.

If the health care community does not accept our potential products for
any of the foregoing reasons, or for any other reason, our business would be
materially harmed.

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If we fail to obtain acceptable
prices or adequate reimbursement for our product candidates, the use of our
potential products could be severely limited.

Our ability to
successfully commercialize our product candidates will depend significantly on
our ability to obtain acceptable prices and the availability of reimbursement to
the patient from third-party payors. Significant uncertainty exists as to the
reimbursement status of newly-approved health care products, including
pharmaceuticals. If our potential products are not considered cost-effective or
if we fail to generate adequate third-party reimbursement for the users of our
potential products and treatments, then we may be unable to maintain price
levels sufficient to realize an appropriate return on our investment for
potential products currently in development. In both U.S. and other markets,
sales of our potential products, if any, will depend in part on the availability
of reimbursement from third-party payors, examples of which include:

- government health administration
  authorities;
- private health
  insurers;
- health maintenance organizations;
  and
- pharmacy benefit management
  companies.

Both federal and state governments in the United States and governments
in other countries continue to propose and pass legislation designed to contain
or reduce the cost of health care. Legislation and regulations affecting the
pricing of pharmaceuticals and other medical products may be adopted before any
of our potential products are approved for marketing. Cost control initiatives
could decrease the price that we receive for any product candidate we may
develop in the future. In addition, third-party payors are increasingly
challenging the price and cost-effectiveness of medical products and services
and any of our potential products may ultimately not be considered
cost-effective by these third parties. Any of these initiatives or developments
could materially harm our business.

RISKS RELATED TO ENVIRONMENTAL AND
PRODUCT LIABILITY

Our activities involve hazardous
materials, and improper handling of these materials by our employees or agents
could expose us to significant legal and financial penalties.

Our research and
development activities involve the controlled use of hazardous materials,
chemicals and various radioactive compounds. As a consequence, we are subject to
numerous environmental and safety laws and regulations, including those
governing laboratory procedures, exposure to blood-borne pathogens and the
handling of biohazardous materials. We 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.

Although we
believe that our safety procedures for using, handling, storing and disposing of
hazardous materials comply with the standards prescribed by state and federal
regulations, the risk of accidental contamination or injury from these materials
cannot be eliminated. In the event of such an accident, state or federal
authorities could curtail our use of these materials and we could be liable for
any civil damages that result, the cost of which could be substantial. 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 could subject us to
significant liabilities, including joint and several liability under certain
statutes. Any such liability 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 our research and
manufacturing facilities and operations.

Additional
federal, state and local laws and regulations affecting us may be adopted in the
future. We may incur substantial costs to comply with these laws and regulations
and substantial fines or penalties if we violate any of these laws or
regulations, which would adversely affect our business.

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.

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 our
potential products is alleged to have injured subjects or patients. This risk
exists for product candidates tested in human clinical trials as well as
potential products that are sold commercially. 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. 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.

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RISKS RELATED TO OUR COMMON STOCK AND
FINANCIAL REPORTING

Our stock price has historically
been very volatile.

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. This
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.

Historically, our stock price has been extremely volatile. Between
January 1999 and March 2009, our stock has traded as high as $75.88 per share
and as low as $1.41 per share. Between January 1, 2006 and March 31, 2009, the
price has ranged between a high of $10.00 per share and a low of $1.95 per
share. The significant market price fluctuations of our common stock are due to
a variety of factors, including:

- the demand in the market for our common
  stock;
- the experimental nature of our product
  candidates;
- fluctuations in our operating
  results;
- market conditions relating to the
  biopharmaceutical and pharmaceutical industries;
- announcements of technological innovations,
  new commercial products, or clinical progress or lack thereof by us, our
  collaborative partners or our competitors;
- announcements concerning regulatory
  developments, developments with respect to proprietary rights and our
  collaborations;
- comments by securities
  analysts;
- general market
  conditions;
- political developments related to human
  embryonic stem cell research;
- public concern with respect to our product
  candidates;or
- the issuance of common stock to partners,
  vendors or to investors to raise additional capital.

In addition,
the stock market is subject to other factors outside our control that can cause
extreme price and volume fluctuations. Securities class action litigation has
often been brought against companies, including many biotechnology companies,
which experience volatility in the market price of their securities. Litigation
brought against us could result in substantial costs and a diversion of
managements attention and resources, which could adversely affect our
business.

The sale of a substantial number of
shares may adversely affect the market price for our common stock.

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 for our common stock. As of March 31, 2009, we had
200,000,000 shares of common stock authorized for issuance and 89,013,842 shares
of common stock outstanding. In addition, as of March 31, 2009, we have reserved
for future issuance approximately 27,315,380 shares of common stock for our
stock plans, potential milestone payments and outstanding warrants.

In addition,
we have issued common stock to certain parties, such as vendors and service
providers, as payment for products and services. Under these arrangements, we
typically agree to register the shares for resale soon after their issuance. We
may continue to pay for certain goods and services in this manner, which would
dilute your interest in us. Also, sales of the shares issued in this manner
could negatively affect the market price of our stock.

Our undesignated preferred stock may
inhibit potential acquisition bids; this may adversely affect the market price
for our common stock and the voting rights of holders of our common
stock.

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
the rights, preferences, privileges and restrictions of these shares without
further vote or action by our stockholders. As of the date of this Form 10-Q,
50,000 shares of preferred stockhave been
designated Series A Junior Participating Preferred Stock and the Board of
Directors still has authority to designate and issue up to 2,950,000 shares of
preferred stock. 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.

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In addition, if
we issue preferred stock in the future 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.

Provisions in our share purchase
rights plan, charter and bylaws, and provisions of 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.

Our Board of
Directors has adopted a share purchase rights plan, commonly referred to as a
poison pill. This plan entitles existing stockholders to rights, including the
right to purchase shares of common stock, in the event of an acquisition of 15%
or more of our outstanding common stock.

Our share
purchase rights plan could prevent stockholders from profiting from an increase
in the market value of their shares as a result of a change of control of us by
delaying or preventing a change of control. In addition, our Board of Directors
has the authority, without further action by our stockholders, to issue
additional shares of common stock, and to fix the rights and preferences of one
or more series of preferred stock.

In addition
to our share purchase rights plan and the undesignated preferred stock,
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:

- prevent stockholders from taking actions by
  written consent;
- divide the Board of Directors into separate
  classes with terms of office that are structured to prevent all of the
  directors from being elected in any one year; and
- set forth procedures for nominating directors and
  submitting proposals for consideration at stockholders
meetings.

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 change of control severance plan which
could require an acquiror 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.

We do not intend to pay cash
dividends on our common stock in the foreseeable future.

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 the Board of Directors. Furthermore, we may incur additional
indebtedness that may severely restrict or prohibit the payment of
dividends.

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.

Section 404
of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act) requires that we
establish and maintain an adequate internal control structure and procedures for
financial reporting and include a report of management on our internal control
over financial reporting. Our annual report 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.

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The
requirements of Section 404 of the Sarbanes-Oxley Act 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
consolidated financial statements, a decline in our stock price, or other
material adverse effects on our business, reputation, results of operations,
financial condition or liquidity.

ITEM 2. UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered
Securities

On January
28, 2009, we issued 163,666 shares of our common stock to Lonza Walkersville,
Inc. (Lonza) in a private placement as advance consideration related to a
services agreement pursuant to which Lonza is manufacturing certain products for
us intended for therapeutic use in humans. The total fair value of the common
stock was $1,185,000 which has been recorded as a prepaid asset and is being
amortized to research and development expense on a pro-rata basis as services
are performed. As of March 31, 2009, $790,000 remained as a prepaid asset which
is expected to be expensed over the next three months.

On January
28, 2009, we issued 69,290 shares of our common stock to MPI Research, Inc.
(MPI) in a private placement as advance consideration related to a services
agreement pursuant to which MPI has provided and will continue to provide
certain preclinical services in support of our programs. The total fair value of
the common stock was $502,000 which has been recorded as a prepaid asset and is
being amortized to research and development expense on a pro-rata basis as
services are performed. As of March 31, 2009, $157,000 remained as a prepaid
asset which is expected to be expensed over the next three months.

On January
28, 2009, we issued 30,884 shares of our common stock to Samchully
Pharmaceutical Co., Ltd. (Samchully) in a private placement as advance
consideration related to a services agreement pursuant to which Samchully is
manufacturing certain products for us intended for therapeutic use in humans.
The total fair value of the common stock was $224,000 which has been recorded as
a prepaid asset and is being amortized to research and development expense on a
pro-rata basis as services are performed. As of March 31, 2009, $224,000
remained as a prepaid asset which is expected to be expensed over the next three
months.

We issued
the above-described shares of common stock in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.
Lonza, MPI and Samchully represented to us that they are accredited investors as
defined in Rule 501(a) of the Securities Act of 1933, as amended, and that the
securities issued pursuant thereto were being acquired for investment
purposes.

Purchases of Equity Securities by the
Issuer and Affiliated Purchasers

None

ITEM 3. DEFAULTS UPON SENIOR
SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS

None

ITEM 5. OTHER
INFORMATION

None

35

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ITEM 6. EXHIBITS

|Exhibit |  |                                                                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description                                                                                                                                                                                       
|31.1    |  | Certification of Chief Executive Officer pursuant to Form of Rule
      13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002, dated April 30, 2009.
|       
|31.2    |  | Certification of Chief Financial Officer pursuant to Form of Rule
      13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002, dated April 30, 2009.
|       
|32.1    |  | Certification of Chief Executive Officer pursuant to 18 U.S.C.
      Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002, dated April 30, 2009.              
|       
|32.2    |  | Certification of Chief Financial Officer pursuant to 18 U.S.C.
      Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002, dated April 30, 2009.              

SIGNATURE

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, thereunto duly
authorized.

|                     | GERON CORPORATION                 
|-------------------- | ----------------------------------
|                     |                                   
|                     | By: /s/ DAVID L.
      GREENWOOD  
|                     |                                   
|                     | David L.
      Greenwood          
|                     | Executive Vice
      President and
|                     | Chief Financial
      Officer     
|Date: April 30, 2009 | (Duly Authorized
      Signatory) 

36

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EXHIBIT INDEX

|Exhibit |  |                                                                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description                                                                                                                                                                                       
|31.1    |  | Certification of Chief Executive Officer pursuant to Form of Rule
      13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002, dated April 30, 2009.
|       
|31.2    |  | Certification of Chief Financial Officer pursuant to Form of Rule
      13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002, dated April 30, 2009.
|       
|32.1    |  | Certification of Chief Executive Officer pursuant to 18 U.S.C.
      Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002, dated April 30, 2009.              
|       
|32.2    |  | Certification of Chief Financial Officer pursuant to 18 U.S.C.
      Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002, dated April 30, 2009.              

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