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 June 30, 2009OR**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.  Yes xNoo 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).  Yes oNoo 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).  Yes oNox 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
      July 27, 2009:Common Stock,
      $0.001 par value
    91,051,202
      shares


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GERON CORPORATION

INDEX

|                                    |                                                                                                                 | Page
|----------------------------------- | --------------------------------------------------------------------------------------------------------------- | ----
|PART I. FINANCIAL
      INFORMATION
|Item 1:                             | Condensed Consolidated Financial Statements                                                                     | 1   
|                                    | Condensed Consolidated Balance Sheets as of June 30, 2009 and
      December 31, 2008                           | 1   
|                                    | Condensed Consolidated Statements of Operations for the three and
      six months ended June 30, 2009 and 2008 | 2   
|                                    | Condensed Consolidated Statements of Cash Flows for the six months
      ended June 30, 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                     | 18  
|Item 3:                             | Quantitative and Qualitative Disclosures About Market Risk                                                      | 24  
|Item 4:                             | Controls and Procedures                                                                                         | 25  
|                                   
|PART II. OTHER INFORMATION         
|Item
      1:                       | Legal
      Proceedings                                                                                         | 25  
|Item 1A:                            | Risk Factors                                                                                                    | 25  
|Item
      2:                       | Unregistered
      Sales of Equity Securities and Use of Proceeds                                               | 40  
|Item 3:                             | Defaults Upon Senior Securities                                                                                 | 40  
|Item
      4:                       | Submission
      of Matters to a Vote of Security Holders                                                       | 40  
|Item 5:                             | Other Information                                                                                               | 41  
|Item
      6:                       | Exhibits                                                                                                        | 41  
|                                    | SIGNATURE                                                                                                       | 42  

---

PART I. FINANCIAL
INFORMATION

ITEM 1. CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

GERON CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

|                                                                |  | JUNE 30,    |          | DECEMBER 31,
|--------------------------------------------------------------- |  | ----------- | -------- | ------------
|                                                                |  | 2009        |          | 2008        
|                                                                |  | (UNAUDITED) |          |             
|ASSETS                                                          |  |             |          |             
|Current
      assets:                                           |  |             |          |             
|Cash
      and cash equivalents                                 |  | $           | 101,371  |             
|Restricted cash                                                 |  |             | 791      |             
|Marketable securities                                           |  |             | 86,475   |             
|Interest and other receivables                                  |  |             | 481      |             
|Current portion of prepaid and other assets                     |  |             | 4,107    |             
|Total current assets                                            |  |             | 193,225  |             
|Noncurrent portion of prepaid assets                            |  |             | 1,662    |             
|Investments in
      licensees                                  |  |             |         |             
|Property and equipment, net                                     |  |             | 4,745    |             
|Deposits and
      other assets                                 |  |             | 343      |             
|                                                                |  | $           | 199,975  |             
|                                                               
|LIABILITIES AND STOCKHOLDERS EQUITY                            |  |             |          |             
|Current
      liabilities:                                      |  |             |          |             
|Accounts payable                                                |  | $           | 2,453    |             
|Accrued compensation                                            |  |             | 2,023    |             
|Accrued liabilities (including amounts for related parties:     |  |             |          |             
|2009-$275, 2008-$270)                                           |  |             | 3,404    |             
|Current portion of deferred revenue                             |  |             |         |             
|Fair
      value of derivatives                                 |  |             | 2,407    |             
|Current portion of advance payment from related party
      for |  |             |          |             
|research and development, net                                   |  |             | 127      |             
|Total current liabilities                                       |  |             | 10,414   |             
|Noncurrent
      portion of deferred revenue                    |  |             |         |             
|Commitments and contingencies                                   |  |             |          |             
|Stockholders
      equity:                                     |  |             |          |             
|Common stock                                                    |  |             | 91       |             
|Additional paid-in capital                                      |  |             | 733,151  |             
|Accumulated deficit                                             |  |             | (543,652 | )           
|Accumulated other comprehensive (loss) income                   |  |             | (29      | )           
|Total stockholders equity                                      |  |             | 189,561  |             
|                                                                |  | $           | 199,975  |             

See accompanying
notes.

1

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GERON CORPORATION

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

|                                                      |  | THREE MONTHS ENDED |            | SIX MONTHS ENDED
|----------------------------------------------------- |  | ------------------ | ---------- | ----------------
|                                                      |  | JUNE 30,           |            | JUNE 30,        
|                                                      |  | 2009               |            | 2008            
|Revenues from collaborative                           |  |                    |            |                 
|agreements
      (including amounts from related      |  |                    |            |                 
|parties:
      three months - 2009-none; 2008-        |  |                    |            |                 
|$33; six
      months - 2009-none; 2008-$59)          |  | $                  |           |                 
|License fees and royalties (including amounts         |  |                    |            |                 
|from related
      parties: three months - 2009-none; |  |                    |            |                 
|2008-none;
      six months - 2009-none; 2008-        |  |                    |            |                 
|$1,500)                                               |  |                    | 183        |                 
|Total revenues                                        |  |                    | 183        |                 
|                                                     
|Operating expenses:                                   |  |                    |            |                 
|Research and
      development (including             |  |                    |            |                 
|amounts for related parties: three months -           |  |                    |            |                 
|2009-$502; 2008-$169; six months - 2009-              |  |                    |            |                 
|$931; 2008-$318)                                      |  |                    | 15,112     |                 
|General and
      administrative                      |  |                    | 3,828      |                 
|Total operating expenses                              |  |                    | 18,940     |                 
|Loss from operations                                  |  |                    | (18,757    | )               
|Unrealized (loss) gain on derivatives, net            |  |                    | (1,330     | )               
|Interest and other income                             |  |                    | 363        |                 
|Losses recognized under equity method                 |  |                    |            |                 
|investment                                            |  |                    |           |                 
|Interest and other expense                            |  |                    | (34        | )               
|Net loss                                              |  |                    | (19,758    | )               
|Deemed dividend on derivatives                        |  |                    | (190       | )               
|Net loss applicable to common stockholders            |  | $                  | (19,948    | )               
|                                                     
|Basic and diluted net loss per share
      applicable |  |                    |            |                 
|to common
      stockholders                          |  |                    |            |                 
|                                                     
|Net loss per share applicable to common               |  |                    |            |                 
|stockholders                                          |  | $                  | (0.23      | )               
|                                                     
|Shares used in computing net loss per share           |  |                    |            |                 
|applicable
      to common stockholders               |  |                    | 88,547,553 |                 

See accompanying
notes.

2

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GERON CORPORATION

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

|                                                                                  | SIX MONTHS ENDED
|--------------------------------------------------------------------------------- | ----------------
|                                                                                  | JUNE 30,        
|                                                                                  | 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 loss (gain) on derivatives,
      net                                  |                 
|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:                                             |                 
|Repurchase of
      common stock                                                  |                 
|Proceeds from issuances of common stock, net of issuance
      costs              |                 
|Net cash provided
      by (used in) financing activities                         |                 
|Net
      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

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Geron CorporationNotes to Condensed Consolidated
Financial Statements June 30, 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 June 30, 2009 and condensed consolidated statements of operations for the
three and six months ended June 30, 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 and six month periods ended
June 30, 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 1,011,597 and 316,545 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.

4

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Geron
CorporationNotes to Condensed
Consolidated Financial Statements June 30, 2009 (Unaudited)

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.

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 current 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 whether we intend to sell the security or whether it is more likely
than not that we would be required to sell the security. Declines in market
value judged other-than-temporary associated with credit losses result in a
charge to interest and other income. Other-than-temporary charges not related to
credit losses are included in accumulated other comprehensive income (loss) in
stockholders equity.

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 Statements June 30, 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
(EITF) 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 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

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Geron
CorporationNotes to Condensed
Consolidated Financial Statements June 30, 2009 (Unaudited)

Restricted Cash

The components of restricted cash
are as follows:

|                                                           | June 30,       |     | December 31,
|---------------------------------------------------------- | -------------- | --- | ------------
|                                                           | 2009           |     | 2008        
|                                                           | (In thousands)
|Certificate of deposit for unused equipment line of credit | $              | 530 |             
|Certificate of
      deposit for credit card purchases     |                | 261 |             
|Funds held in trust for creditors of TA Therapeutics, Ltd. |                |    |             
|                                                           | $              | 791 |             

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) 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 and six months ended June 30, 2009 and 2008 which was allocated as
follows:

|                                             | Three Months Ended |       | Six Months Ended
|-------------------------------------------- | ------------------ | ----- | ----------------
|                                             | June 30,           |       | June 30,        
|                                             | 2009               |       | 2008            
|                                             | (In thousands)    
|Research and development                     | $                  | 1,111 |                 
|General and administrative                   |                    | 1,461 |                 
|Stock-based compensation expense included in |                    |       |                 
|operating expenses                           | $                  | 2,572 |                 

7

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Geron
CorporationNotes to Condensed
Consolidated Financial StatementsJune 30, 2009(Unaudited)

Stock Options

The fair
value of options granted during the six months ended June 30, 2009 and 2008 has
been estimated at the date of grant using the Black Scholes option-pricing model
with the following assumptions:

|                                |  | Six Months Ended June 30,
|------------------------------- |  | -------------------------
|                                |  | 2009                     
|Dividend yield                  |  | None                     
|Expected
      volatility range |  | 0.630 to
      0.631     
|Risk-free interest rate range   |  | 1.54% to 2.34%           
|Expected
      term             |  | 5 yrs                    

Employee Stock Purchase
Plan

The fair
value of employees purchase rights during the six months ended June 30, 2009
and 2008 has been estimated using the Black Scholes option-pricing model with
the following assumptions:

|                                |  | Six Months Ended June
    30,
|------------------------------- |  | -----------------------------
|                                |  | 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 and six months ended June 30, 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 (i) the
date at which a commitment for performance by the counterparty to earn the
equity instrument is reached or (ii) 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 StatementsJune 30, 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 and six months ended June 30, 2009 and 2008
are as follows:

|                                                                            |  | Three Months
    Ended |         | Six Months
      Ended
|--------------------------------------------------------------------------- |  | ---------------------- | ------- | ----------------------
|                                                                            |  | June 30,               |         | June 30,              
|                                                                            |  | 2009                   |         | 2008                  
|                                                                            |  | (In
  thousands)      
|Net
loss                                                                    |  | $                      | (19,758 | )                     
|Change in unrealized gain (loss)
      on                                   |  |                        |         |                       
|available-for-sale securities and marketable investments
      in licensees |  |                        | (73     | )                     
|Change in foreign
      currency translation adjustments                    |  |                        | 1       |                       
|Comprehensive loss                                                          |  | $                      | (19,830 | )                     

The components of accumulated other
comprehensive income (loss) are as follows:

|                                                          |  | June 30, 2009  |      | December 31, 2008
|--------------------------------------------------------- |  | -------------- | ---- | -----------------
|                                                          |  | (In thousands)
|Net unrealized gains on available-for-sale securities and |  |                |      |                  
|marketable investments in
      licensees                 |  | $              | 141  |                  
|Foreign currency
      translation adjustments            |  |                | (170 | )                
|Accumulated other comprehensive
      (loss) income       |  | $              | (29  | )                

Recent Accounting Pronouncements

In April
2009, the FASB issued FASB Staff Position (FSP) No. 107-1 and Accounting
Principles Board (APB) Opinion No. 28-1, Interim Disclosures about Fair Value
of Financial Instruments (FSP FAS 107-1 and APB 28-1). This FSP amends
Statement of Financial Accounting Standards No. 107, Disclosures about Fair
Value of Financial Instruments, to require disclosures about fair value of
financial instruments for interim reporting periods of publicly traded companies
as well as in annual financial statements. This FSP also amends APB Opinion No.
28, Interim Financial Reporting, to require those disclosures in summarized
financial information at interim reporting periods. The FSP is effective for
interim reporting periods ending after June 15, 2009. As of June 30, 2009, we
adopted FSP FAS 107-1 and APB 28-1 and there was no impact on our consolidated
financial position, results of operations and cash flows. The required
disclosures have been included in Note 2 on Fair Value Measurements.

In April
2009, the FASB issued FSP FAS No. 115-2 and FAS No. 124-2, Recognition and
Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2 and FAS 124-2).
This FSP amends the other-than-temporary impairment guidance for debt securities
to make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities in
the financial statements. This FSP does not amend existing recognition and
measurement guidance related to other-than-temporary impairments of equity
securities. The FSP is effective for interim reporting periods ending after June
15, 2009. As of June 30, 2009, we adopted FSP FAS No. 115-2 and FAS 124-2 and
there was no impact on our consolidated financial position, results of
operations and cash flows. The required disclosures have been included in Note 2
on Fair Value Measurements.

In April
2009, the FASB issued FSP FAS No. 157-4, Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly (FSP FAS 157-4). This FSP
provides additional guidance for estimating fair value in accordance with SFAS
157 when the volume and level of activity for the asset or liability have
significantly decreased and includes guidance on identifying circumstances that
indicate a transaction is not orderly. This FSP does not change the definition
of fair value under SFAS 157. The FSP is effective for interim reporting periods
ending after June 15, 2009. As of June 30, 2009, we adopted FSP FAS 157-4 and
there was no impact on our consolidated financial position, results of
operations and cash flows.

9

---

Geron
CorporationNotes to Condensed
Consolidated Financial StatementsJune 30, 2009(Unaudited)

In May 2009,
the FASB issued Statement of Financial Accounting Standards No. 165, Subsequent
Events (SFAS 165). This standard provides guidance on managements assessment
of subsequent events, which are defined as events or transactions that occur
after the balance sheet date but before the financial statements are issued or
are available to be issued. This standard also requires disclosure of the date
through which subsequent events have been evaluated and whether that is the date
that the financial statements were issued or available to be issued. SFAS 165 is
effective for interim or annual fiscal periods ending after June 15, 2009. We
adopted SFAS 165 as of June 30, 2009 and there was no impact on our consolidated
financial position, results of operations and cash flows. The required
disclosures have been included in Note 8 on Subsequent Events.

In June
2009, the FASB issued Statement of Accounting Standards No. 166, Accounting for
Transfers of Financial Assetsan amendment of FASB Statement No. 140 (SFAS
166). This standard eliminates the concept of a qualifying special purpose
entity (QSPE) and modifies the derecognition provisions in Statement No. 140.
SFAS 166 is effective for financial asset transfers occurring after the
beginning of an entitys first fiscal year that begins after November 15, 2009.
We do not expect the adoption of SFAS 166 to have a material impact on our
consolidated financial position, results of operations and cash
flows.

In June
2009, the FASB issued Statement of Financial Accounting Standards No. 167,
Amendments to FASB Interpretation No. 46(R) (SFAS 167). This statement amends
the consolidation guidance applicable to variable interest entities and is
effective as of the beginning of an entitys first fiscal year that begins after
November 15, 2009. We are evaluating the impact that SFAS 167 will have on our
consolidated financial position, results of operations and cash flows, if any.

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.

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.

10

---

Geron
CorporationNotes to Condensed
Consolidated Financial StatementsJune 30, 2009(Unaudited)

As of June
30, 2009 and December 31, 2008, the carrying values of our investments in
non-marketable nonpublic companies were none and $656,000, respectively. We
recognized no charges for the three months ended June 30, 2009 and 2008, related
to other-than-temporary declines in fair values of investments in licensees. We
recognized charges of none and $43,000 for the six months ended June 30, 2009
and 2008, respectively, related to other-than-temporary declines in the fair
values of certain of our investments in licensees. We recognized net realized
losses of $19,000 for the three and six months ended June 30, 2009 related to
sales of investments in licensees. In connection with the sales, $19,000 of
previously unrecognized unrealized loss was eliminated from accumulated other
comprehensive loss for the three and six months ended June 30, 2009. We did not
realize any losses from such sales for the three and six months ended June 30,
2008. See Note 3 on Joint Venture and Related Party Transactions for further
discussion of investments in licensees.

Marketable debt and equity
securities by security type at June 30, 2009 were as follows:

|                                                         |  |                |        |       | Gross      |        | Gross      |       | Estimated
|-------------------------------------------------------- |  | -------------- | ------ | ----- | ---------- | ------ | ---------- | ----- | ---------
|                                                         |  |                |        |       | Unrealized |        | Unrealized |       | Fair     
|                                                         |  | Cost           |        | Gains |            | Losses |            | Value
|                                                         |  | (In thousands)
|Included in cash and cash equivalents:                   |  |                |        |       |            |        |            |       |          
|Money market funds                                       |  | $              | 98,839 |       | $          |       |            | $     |         
|Restricted cash:                                         |  |                |        |       |            |        |            |       |          
|Certificates of deposit                                  |  | $              | 791    |       | $          |       |            | $     |         
|Marketable securities:                                   |  |                |        |       |            |        |            |       |          
|U.S.
      Treasury securities (due in less than 1 year) |  | $              | 15,237 |       | $          | 3      |            | $     | (3       
|Government-sponsored enterprise securities               |  |                |        |       |            |        |            |       |          
|(due in less than 1 year)                                |  |                | 40,068 |       |            | 56     |            |       |         
|Commercial paper (due in less than 1 year)               |  |                | 31,022 |       |            | 92     |            |       |         
|Investments in licensees                                 |  |                | 7      |       |            |       |            |       | (7       
|                                                         |  | $              | 86,334 |       | $          | 151    |            | $     | (10      

Marketable debt and equity
securities by security type at December 31, 2008 were as follows:

|                                                         |  |                |         |       | Gross      |        | Gross      |            |           |  
|-------------------------------------------------------- |  | -------------- | ------- | ----- | ---------- | ------ | ---------- | ---------- | --------- | -
|                                                         |  |                |         |       | Unrealized |        | Unrealized |            | Estimated
|                                                         |  | Cost           |         | Gains |            | Losses |            | Fair Value
|                                                         |  | (In thousands)
|Included in cash and cash equivalents:                   |  |                |         |       |            |        |            |            |           |  
|Money market funds                                       |  | $              | 106,046 |       | $          |       |            | $          |          |  
|U.S. Treasury securities                                 |  |                | 1,254   |       |            |       |            |            |          |  
|                                                         |  | $              | 107,300 |       | $          |       |            | $          |          |  
|                                                         |  |                |         |       |            |        |            |            |           |  
|Restricted cash:                                         |  |                |         |       |            |        |            |            |           |  
|Certificates of deposit                                  |  | $              | 788     |       | $          |       |            | $          |          |  
|Money market funds                                       |  |                | 28      |       |            |       |            |            |          |  
|                                                         |  | $              | 816     |       | $          |       |            | $          |          |  
|                                                         |  |                |         |       |            |        |            |            |           |  
|Marketable securities:                                   |  |                |         |       |            |        |            |            |           |  
|U.S. Treasury securities (due in less than 1
      year) |  | $              | 10,314  |       | $          | 55     |            | $          |          |  
|Government-sponsored enterprise securities               |  |                |         |       |            |        |            |            |           |  
|(due in less than 1 year)                                |  |                | 25,764  |       |            | 87     |            |            |          |  
|Commercial paper (due in less than 1
      year)         |  |                | 17,176  |       |            | 95     |            |            |          |  
|Investments in licensees                                 |  |                | 27      |       |            |       |            |            | (26       | )
|                                                         |  | $              | 53,281  |       | $          | 237    |            | $          | (26       | )

11

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Geron
CorporationNotes to Condensed
Consolidated Financial StatementsJune 30, 2009(Unaudited)

Marketable
debt and equity securities with unrealized losses at June 30, 2009 and December
31, 2008 were as follows:

|                             |  | Less Than 12 Months |        | 12 Months or Greater |       | Total        
|---------------------------- |  | ------------------- | ------ | -------------------- | ----- | -------------
|                             |  |                     |        |                      | Gross |              
|                             |  | Estimated           |        | **Unrealized**       |       | **Estimated**
|                             |  | Fair Value          |        | Losses               |       | Fair Value   
|                             |  | (In thousands)     
|As of June 30, 2009:         |  |                     |        |                      |       |              
|U.S. Treasury
    securities |  | $                   | 11,737 |                      | $     | (3           
|Investments in
    licensees |  |                     |       |                      |       |             
|                             |  | $                   | 11,737 |                      | $     | (3           
|                            
|As of December 31, 2008:     |  |                     |        |                      |       |              
|Investments in licensees     |  | $                   |       |                      | $     |             

The gross
unrealized losses related to U.S. Treasury securities were due to changes in
interest rates. We do not intend to sell these investments and it is not more
likely than not that we will be required to sell these investments before
recovery of the amortized cost bases, which may be at maturity. The gross
unrealized losses related to investments in licensees were a result of declining
valuations for those biopharmaceutical companies. We have determined that the
gross unrealized losses on our investments in licensees as of June 30, 2009 and
December 31, 2008 are temporary in nature. We review our investments in
licensees quarterly to identify and evaluate whether any investments have
indications of possible impairment. Factors considered in determining whether a
loss is temporary include the length of time and extent to which fair value has
been less than the cost basis, the financial condition and near-term prospects
of the investee, and our intent and ability to hold the investment for a period
of time sufficient to allow for any anticipated recovery in market value.

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:

|                                |  | June 30, 2009        |  | December 31, 2008   
|------------------------------- |  | -------------------- |  | --------------------
|Dividend yield                  |  | None                 |  | None                
|Expected
      volatility range |  | 0.626 to
      1.057 |  | 0.749 to
      0.758
|Risk-free interest rate range   |  | 0.56% to 2.54%       |  | 0.57% to 1.71%      
|Expected term
      range       |  | 1 yr to 6
      yrs  |  | 1 yr to 6
      yrs 

The expected volatility range is
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.

As of June
30, 2009 and December 31, 2008, the following warrants and non-employee options
to purchase common stock were considered derivatives and classified as current
liabilities:

|                 |  |          |      |             |                    |            |                  |        | At June 30, 2009 |                | At December 31, 2008
|---------------- |  | -------- | ---- | ----------- | ------------------ | ---------- | ---------------- | ------ | ---------------- | -------------- | --------------------
|                 |  |          |      |             |                    |            |                  |        | Number           |                | Fair                
|Issuance         |  | Exercise |      | Exercisable |                    | Expiration |                  | of     |                  | Value          |                     
|Date             |  | Price    |      | Date        |                    | Date       |                  | Shares |                  | (In thousands) |                     
|April 2005       |  | $        | 7.95 |             | April 2005         |            | April 2010       |        | 351,852          |                | $                   
|March
      2005 |  | $        | 6.39 |             | January
      2007 |            | March
      2015 |        | 304,600          |                |                     
|                 |  |          |      |             |                    |            |                  |        |                  |                | $                   

12

---

Geron
CorporationNotes to Condensed
Consolidated Financial StatementsJune 30, 2009(Unaudited)

For the
three months ended June 30, 2009 and 2008, no reclassifications were made from
current liabilities to stockholders equity for warrants and non-employee
options classified as derivatives under Issue 00-19. For the six months ended
June 30, 2009 and 2008, $30,000 and none, respectively, were reclassified from
current liabilities to stockholders equity related to warrants and non-employee
options classified as derivatives under Issue 00-19.

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 June 30, 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.

Changes in Level 3 Recurring Fair Value
Measurements

The table
below includes a rollforward of the balance sheet amounts for the three and six
months ended June 30, 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 June 30,
      2009                                       
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  | Fair Value at                                                                
|                       |  | March 31,                                                                    
|(In thousands)         |  | 2009                                                                         
|Derivative liabilities |  | $                                                                            

13

---

Geron
CorporationNotes to Condensed
Consolidated Financial StatementsJune 30, 2009(Unaudited)

|                       |  | Fair Value Measurements Using Significant Unobservable Inputs
      (Level 3)
|---------------------- |  | -----------------------------------------------------------------------------
|                       |  | Six Months Ended June 30,
      2009                                         
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  | Fair Value at                                                                
|                       |  | December
      31,                                                           
|(In thousands)         |  | 2008                                                                         
|Derivative liabilities |  | $                                                                            

|(1) |  | Reported as unrealized loss on
      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 June 30, 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s
acquisition of 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 any commitments 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.

Since the
adjusted basis of our investment was zero at March 31, 2009, we suspended the
equity method of accounting as of April 1, 2009. We recognized losses of
$656,000 for our proportionate share of ViaGens operating losses for the six
months ended June 30, 2009. Our share of losses is recorded in the condensed
consolidated statements of operations under losses recognized under equity
method investment.

14

---

Geron
CorporationNotes to Condensed
Consolidated Financial StatementsJune 30, 2009(Unaudited)

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 and six months ended June 30, 2009, we
incurred related party research and development costs of $502,000 and $931,000,
respectively, compared to $169,000 and $318,000, for the comparable 2008
periods. For the three and six months ended June 30, 2009, we earned no related
party revenue, compared to $33,000 and $59,000, for the comparable 2008 periods.
As of June 30, 2009 and December 31, 2008, the net balance of the advance
payment from BRC was $127,000 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 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. As of June 30, 2009, $406,000 remained as a prepaid
asset which is expected to be expensed over the next six months.

In May 2009,
we issued 205,252 shares of our common stock to DP Clinical, Inc. (DP Clinical)
in a private placement as advance consideration related to a services agreement
pursuant to which DP Clinical has provided and will continue to provide certain
clinical services in support of our programs. The total fair value of the common
stock was $1,324,000 which has been recorded as a prepaid asset and will
be amortized to research and development expense on a pro-rata basis as
services are performed. As of June 30, 2009, $1,324,000 remained as a prepaid
asset which is expected to be expensed over the next twelve months.

15

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Geron
CorporationNotes to Condensed
Consolidated Financial StatementsJune 30, 2009(Unaudited)

Warrant Modification

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 recognized a deemed dividend of approximately
$190,000 in our condensed consolidated statements of operations for the three
and six months ended 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.

5. COLLABORATIVE AGREEMENT

On June 29,
2009, we entered into a worldwide exclusive license and alliance agreement with
GE Healthcare UK Limited (GEHC) to develop and commercialize cellular assay
products derived from human embryonic stem cells (hESCs) for use in drug
discovery, development and toxicity screening. Under the terms of the agreement,
GEHC has been granted an exclusive license under Gerons intellectual property
portfolio covering the growth and differentiation of hESCs, as well as a
sublicense under Gerons rights to the hESC patents held by the Wisconsin Alumni
Research Foundation. We have established a multi-year alliance program with GEHC
under which scientists from both companies will work to develop hESC-based
products for drug discovery.

In
connection with the agreement, we will receive upfront non-refundable license
payments under the exclusive license and sublicense as well as milestone
payments upon achievement of certain commercial development and product sales events and royalties on
future product sales. Under the alliance program, GEHC will be responsible for
all costs incurred by GEHC and all costs incurred by Geron for activities
undertaken at Geron, including the funding of Geron scientists working on the
alliance program. An Alliance Steering Committee, with representatives from each
company, will coordinate and manage the alliance program.

License
payments under the GEHC agreement will be recorded as deferred revenue upon
receipt and recognized ratably as revenue over the alliance program period as a
result of our continuing involvement with the collaboration. Funding received
for Gerons efforts under the alliance program will be recognized as revenue as
costs are incurred, which is expected to approximate our level of effort over
the period of the alliance program. Since the milestone payments are subject to
substantive contingencies, any such payments will be recognized upon completion
of the specified milestones. Royalties received under the agreement will
generally be recognized as revenue upon receipt of the related royalty payment.
As of June 30, 2009, we had not received any payments under the GEHC
collaborative agreement.

6. 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.

16

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Geron
CorporationNotes to Condensed
Consolidated Financial StatementsJune 30, 2009(Unaudited)

7. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS DATA

Supplemental schedule of non-cash
operating and investing activities:

|                                                                 |  | Six Months Ended
|---------------------------------------------------------------- |  | ----------------
|                                                                 |  | June 30,        
|(In
      Thousands)                                             |  | 2009            
|                                                                 |  | (Unaudited)     
|Supplemental Operating Activities:                               |  |                 
|Cash in transit from option exercises                            |  | $               
|Net unrealized gain (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 loss on marketable securities                     |  |                 

8. SUBSEQUENT EVENT

We have
evaluated events occurring from July 1, 2009 to July 31, 2009, the filing date
of this Form 10-Q, and have determined the following subsequent event to be
disclosed.

In July
2009, we issued 137,363 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 $1,087,000 which has been recorded as a prepaid asset and will
be amortized to research and development expense on a pro-rata basis as
services are performed which is expected to be four months.

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

FORWARD-LOOKING
STATEMENTS

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 are within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. 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 II, Item 1A, entitled Risk Factors and in Managements Discussion and
Analysis of Financial Condition and Results of Operations in Part I, Item 2 of
this Form 10-Q.

OVERVIEW

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
developing first-in-class biopharmaceuticals 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 in different
cancers and has received clearance to initiate the first clinical trial of a
human embryonic stem cell (hESC)-based therapy.

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 six months ended June 30, 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 with accounting principles generally accepted in the United States,
and present a meaningful presentation of our financial condition and results of
operations.

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RESULTS OF OPERATIONS

Revenues

We
recognized no revenues from collaborative agreements for the three and six
months ended June 30, 2009, compared to $87,000 and $166,000 for the comparable
2008 periods. 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 $145,000 and $526,000 for the
three and six months ended June 30, 2009, respectively, compared to $92,000 and
$1.7 million for the comparable 2008 periods 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 $38,000 and $101,000 for the three and six months ended June 30,
2009, respectively, compared to $19,000 and $52,000 for the comparable 2008
periods 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 $15.1 million and $28.9 million for the three and six
months ended June 30, 2009, respectively, compared to $11.6 million and $25.2
million for the comparable 2008 periods. The increase in research and
development expenses for the 2009 second quarter compared to the 2008 second
quarter was primarily the result of higher manufacturing and process development
costs of $2.0 million for our GRN163L, GRNVAC1 and GRNOPC1 product candidates,
increased clinical trial costs of $601,000 as a result of increased patient
enrollment for GRN163L and GRNVAC1 trials and startup costs for the GRNOPC1
trial, increased preclinical study costs of $223,000 and increased personnel
costs for additional headcount of $436,000. The increase in research and
development expenses for the first six months of 2009 compared to first six
months of 2008 was primarily due to higher manufacturing and process development
costs of $1.6 million for GRN163L, GRNVAC1 and GRNOPC1, increased clinical trial
costs of $1.0 million, increased preclinical study costs of $493,000 and higher
personnel related costs of $536,000. Overall, we expect research and development
expenses to increase 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 are conducting 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;

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- 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 in humans 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.

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 are
conducting 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 human 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 |        | Six Months Ended
|-------------------- |  | ------------------ | ------ | ----------------
|                     |  | June 30,           |        | June 30,        
|                     |  | 2009               |        | 2008            
|                     |  | (Unaudited)       
|Oncology             |  | $                  | 7,691  |                 
|hESC
      Therapies |  |                    | 7,421  |                 
|Total                |  | $                  | 15,112 |                 

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 United States 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 Investigational New Drug (IND) application.
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.

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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 successful development 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.

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 included elsewhere in
this quarterly report.

General and Administrative
Expenses

General and
administrative expenses were $3.8 million and $7.2 million for the three and six
months ended June 30, 2009, respectively, compared to $4.0 million and $8.1
million for the comparable 2008 periods. The decrease in general and
administrative expenses for the 2009 second quarter compared to the 2008 second
quarter was primarily due to reduced legal costs associated with our patents of
$100,000 and lower consulting costs of $87,000. The decrease in general and
administrative expenses for the first six months of 2009 compared to the first
six months of 2008 was primarily due to reduced legal costs associated with our
patents of $280,000 and lower consulting costs of $226,000. We currently
anticipate general and administrative expenses to remain consistent with current
levels.

Unrealized Gain (Loss) on
Derivatives

Unrealized
gain (loss) on 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 unrealized loss on derivatives of $1.3
million for the three and six months ended June 30, 2009, compared to unrealized
gain of $495,000 and $901,000 for the comparable 2008 periods. The unrealized
loss on derivatives for 2009 primarily reflects higher fair values of derivative
liabilities as a result of increasing common stock values as of the end of the
current reporting period in comparison to prior reporting periods. The
unrealized gain on derivatives for 2008 primarily reflects the decreasing value
of derivative liabilities as a result of decreasing terms of outstanding
instruments and corresponding adjustments in volatility and interest rate
assumptions.

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Interest and Other
Income

Interest
income was $363,000 and $888,000 for the three and six months ended June 30,
2009, respectively, compared to $1.4 million and $3.3 million for the comparable
2008 periods. The decrease in interest income for the 2009 periods compared to
the 2008 periods 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). We had suspended the
equity method of accounting for 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. In September 2008, we provided a
loan of $1.5 million to ViaGen in connection with ViaGens acquisition of 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 none
and $656,000 for our proportionate share of ViaGens losses for the three and
six months ended June 30, 2009, respectively, as an adjustment to the basis of
the loan. As of March 31, 2009, the basis of the loan was zero and thus we
suspended the equity method of accounting as of April 1, 2009 since we had no
commitments to provide financial support to ViaGen.

Interest and Other
Expense

Interest and
other expense was $34,000 and $86,000 for the three and six months ended June
30, 2009, respectively, compared to $24,000 and $48,000 for the comparable 2008
periods. The increase in interest and other expense for the 2009 periods
compared to the 2008 periods was primarily due to higher investment management
charges.

Deemed Dividend on Derivatives

In April
2009, we modified the terms of certain outstanding warrants held by an investor
by extending the exercise term and for certain of these warrants, reducing the
exercise price. In connection with the modifications, we recognized a deemed
dividend of approximately $190,000 for the incremental fair value of the
modified warrants, as calculated using the Black Scholes option-pricing model as
of the modification date.

Net Loss Applicable to Common
Stockholders

Net loss
applicable to common stockholders was $19.9 million and $36.8 million for the
three and six months ended June 30, 2009, respectively, compared to $13.6
million and $27.2 million for the comparable 2008 periods. The increase in net
loss for the 2009 second quarter compared to the 2008 second quarter was
primarily due to decreased interest income, higher research and development
expenses associated with continued clinical development of our programs and
unrealized losses associated with our derivative liabilities. The increase in
net loss for the first six months of 2009 compared to the first six months of
2008 was primarily due to decreased interest income, reduced revenues from
milestones, increased research and development expenses and unrealized losses
associated with our derivative liabilities.

LIQUIDITY AND CAPITAL
RESOURCES

Cash,
restricted cash, cash equivalents and marketable securities at June 30, 2009
were $188.6 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 to date we have not 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 (after deducting underwriting discounts and commissions and offering
expenses) in February 2009 from an underwritten public offering of 7.25 million
shares of our common stock.

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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, any
of which could have a material adverse effect on our business.

Cash
Flows from Operating Activities.Net cash
used in operations for the six months ended June 30, 2009 and 2008 was $20.5
million and $20.9 million, respectively. The decrease in net cash used for
operations in 2009 was primarily the result of increased usage of common stock
in exchange for services provided by vendors.

Cash
Flows from Investing Activities.Net cash
used in investing activities was $34.5million for the six months ended June 30,
2009, compared to net cash provided by investing activities of $2.3 million for
the comparable 2008 period. The decrease in net cash provided by investing
activities reflected increased marketable securities purchases.

As of June
30, 2009, we had approximately $500,000 available for borrowing under our
equipment financing facility. We renewed the commitment for a new equipment
financing facility in 2009 to further fund equipment purchases. If we are unable
to renew the commitment in the future, we will use our cash resources for
capital expenditures.

Cash
Flows from Financing Activities.Net cash
provided by financing activities was $47.0 million for the six months ended June
30, 2009, compared to net cash used in financing activities of $343,000 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 June 30, 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 |  | $                                     

23

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|(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.

Interest
Rate Sensitivity. The fair value of our cash
equivalents and marketable securities at June 30, 2009 was $185.3 million. These
investments include $98.8 million of cash equivalents which are due in less than
90 days and $86.5 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 U.S. dollars for reporting purposes, currency
fluctuations can have an impact, though generally immaterial, on our operating
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 June 30, 2009, there was an immaterial currency exchange
impact from our intercompany transactions. As of June 30, 2009, we did not
engage in foreign currency hedging activities.

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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, as amended, 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 June 30,
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.

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. Competitors may have proprietary rights
which prevent us from developing and 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.

25

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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 had been created
forin vitrofertilization procedures but were no longer desired or suitable for that
use and were 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.

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, in July 2009 the Secretary of Health
and Human Services, through the Director of the National Institutes of Health
(NIH), issued new guidelines relating to human stem cell research. Under the new
guidelines, federal funding is allowed for research using human embryonic stem
cells derived from embryos created byin
vitrofertilization for reproductive
purposes, but are no longer needed for that purpose. Strict ethics requirements
must be followed to qualify new stem cell lines, including extensive
documentation around consent forms and written policies and procedures. 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
- as a result of the potential adverse
  effects above, causing a decrease in the price of our
stock.

26

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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
June 30, 2009, our accumulated deficit was approximately $543.7 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 independently 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 future 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 for
  the remaining 2009 fiscal year 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.

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.

27

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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 (CROs) 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 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.

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, 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.

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.

28

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Our
potential product candidates will require extensive preclinical and clinical
testing prior to submission of any regulatory application to commence 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.

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 the manufacture, distribution
  and sales and marketing of products; and
- criminal prosecution.

29

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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 proposed by the United States Patent and
Trademark Office (the Patent Office) in 2007. 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  the U.S.
Court of Appeals for the Federal Circuit issued an initial opinion on the appeal
in March 2009, but in July 2009 it agreed to re-hear the appeal en banc (meaning
before the whole appeals court rather than a panel of just three judges). We do
not know what the ultimate outcome of the appeal will be 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.

30

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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 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.

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 been
involved in two patent oppositions before the 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.

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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 appealed 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.

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.

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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.

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, Sienna is developing cancer diagnostics using
our telomerase technology and GE Healthcare is developing cell-based assays
using cells derived from our human embryonic stem cells. 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.

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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.

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 noncommercial 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.

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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.

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.

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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.

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.

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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.

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 June 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 June 30, 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;

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- 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. In the third and fourth quarters of 2008,
as well as during the first half of 2009, broad distress in the financial
markets and the economy have resulted in greatly increased market uncertainty
and instability in both U.S. and international capital and credit markets. These
conditions, combined with volatile oil prices, declining business and consumer
confidence and increased unemployment have recently contributed to substantial
market volatility, and if such market conditions persist, the price of our
common stock may fluctuate or decline. 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 June 30, 2009, we had 200,000,000 shares of common
stock authorized for issuance and 90,755,672 shares of common stock outstanding.
In addition, as of June 30, 2009, we have reserved for future issuance
approximately 26,275,600 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
or alter the rights, preferences, privileges and restrictions granted to or
imported upon these shares without further vote or action by our stockholders.
As of the date of this filing, 50,000 shares of preferred stock have 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 in one or more classes or series. 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.

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.

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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.

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.

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

Recent Sales of Unregistered
Securities

On April 27, 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. As of June
30, 2009, $406,000 remained as a prepaid asset which is expected to be expensed
over the next six months.

On May 12,
2009, we issued 205,252 shares of our common stock to DP Clinical, Inc. (DP
Clinical) in a private placement as advance consideration related to a services
agreement pursuant to which DP Clinical has provided and will continue to
provide certain clinical services in support of our programs. The total fair
value of the common stock was $1,324,000 which has been recorded as a prepaid
asset and will be amortized to research and development expense on a
pro-rata basis as services are performed. As of June 30, 2009, $1,324,000
remained as a prepaid asset which is expected to be expensed over the next
twelve months.

On July 7,
2009, we issued 137,363 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 $1,087,000 which has been recorded as a prepaid asset
and will be amortized to research and development expense on a
pro-rata basis as services are performed which is expected to be four
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.
MPI, DP Clinical and Lonza 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

The 2009
Annual Meeting of Stockholders of the Company was held pursuant to notice on May
29, 2009 at 8:30 a.m. local time at the Companys headquarters, 230 Constitution
Drive, Menlo Park, California. There were present at the meeting, in person or
represented by proxy, the holders of 60,120,882 shares of Common Stock. The
matters voted on at the meeting and the votes cast were as follows:

(a) The nominees for Class I
Directors listed below were elected at the meeting.

|                        |  |                     |  | NO. OF
      COMMON |  |                    
|----------------------- |  | ------------------- |  | ------------------- |  | -------------------
|                        |  | NO. OF
      COMMON |  | VOTES               |  | NO. OF
      COMMON
|NAME OF NOMINEE         |  | VOTES IN FAVOR      |  | ABSTAINING          |  | VOTES
WITHHELD     
|Thomas B. Okarma        |  | 56,276,060          |  | 0                   |  | 3,844,822          
|Patrick J.
      Zenner |  | 56,191,917          |  | 0                   |  | 3,928,965          

Edward V.
Fritzky and Thomas D. Kiley are Class II Directors and were not up for election
at the 2009 Annual Meeting. Alexander E. Barkas, Karin Eastham and Charles J.
Homcy are Class III Directors and were not up for election at the 2009 Annual
Meeting. Drs. Barkas and Homcy, Ms. Eastham and Messrs. Fritzky and Kiley
continue to serve as directors of the Company.

40

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(b) The
amendments to the Companys 2006 Directors Stock Option Plan to revise certain
terms with respect to stock options, restricted stock awards and restricted
stock units to be granted under such plan were approved. There were 11,120,537
shares of Common Stock voting in favor, 6,993,231 shares of Common Stock voting
against, 223,382 shares of Common Stock abstaining and 41,783,732 shares of
Common Stock non-voting.

(c) The
amendment to the Companys 1996 Employee Stock Purchase Plan to increase the
aggregate number of shares of Common Stock authorized for issuance under such
plan by 600,000 shares was approved. There were 15,746,389 shares of Common
Stock voting in favor, 2,403,167 shares of Common Stock voting against, 187,593
shares of Common Stock abstaining and 41,783,733 shares of Common Stock
non-voting.

(d) The
appointment of Ernst & Young LLP as the Companys independent accountants
for the fiscal year ending December 31, 2009 was ratified. There were 58,271,065
shares of Common Stock voting in favor, 1,505,099 shares of Common Stock voting
against and 344,718 shares of Common Stock abstaining.

ITEM 5. OTHER
INFORMATION

None.

ITEM 6. EXHIBITS

|Exhibit |      |            
|------- | ---- | -----------
|Number  |      | Description
|        | 4.1  |            
|        |      |            
|        | 4.2  |            
|        |      |            
|        | 10.1 |            
|        |      |            
|        | 10.2 |            
|        |      |            
|        | 10.3 |            
|        |      |            
|        | 31.1 |            
|        |      |            
|        | 31.2 |            
|        |      |            
|        | 32.1 |            
|        |      |            
|        | 32.2 |            

41

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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:              
|                    |                  
|                    |                  
|                    |                  
|Date: July 31, 2009 |                  

42

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EXHIBIT INDEX

|Exhibit |      |            
|------- | ---- | -----------
|Number  |      | Description
|        | 4.1  |            
|        |      |            
|        | 4.2  |            
|        |      |            
|        | 10.1 |            
|        |      |            
|        | 10.2 |            
|        |      |            
|        | 10.3 |            
|        |      |            
|        | 31.1 |            
|        |      |            
|        | 31.2 |            
|        |      |            
|        | 32.1 |            
|        |     
|        | 32.2 |            

---