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 September 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 website, 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
      October 26, 2009:Common Stock,
      $0.001 par value
    91,627,842
      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 September 30, 2009 and
      December 31, 2008                                  | 1   
|                              |  | Condensed
      Consolidated Statements of Operations for the three and nine months ended
      September 30, 2009 and 2008 | 2   
|                              |  | Condensed Consolidated Statements of Cash Flows for the nine months
      ended September 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                                 | 16  
|Item 3:                       |  | Quantitative and
      Qualitative Disclosures About Market Risk                                                            | 22  
|Item 4:                       |  | Controls and Procedures                                                                                                     | 23  
|                             
|PART II. OTHER INFORMATION   
|Item 1:                       |  | Legal Proceedings                                                                                                           | 24  
|Item 1A:                      |  | Risk Factors                                                                                                                | 24  
|Item 2:                       |  | Unregistered Sales of Equity Securities and Use of
    Proceeds                                                             | 39  
|Item 3:                       |  | Defaults Upon Senior Securities                                                                                             | 39  
|Item 4:                       |  | Submission of Matters to a Vote of Security Holders                                                                         | 39  
|Item 5:                       |  | Other Information                                                                                                           | 39  
|Item 6:                       |  | Exhibits                                                                                                                    | 39  
|                              |  | SIGNATURE                                                                                                                   | 40  

---

PART I. FINANCIAL
INFORMATION

ITEM 1. CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

GERON
CORPORATIONCONDENSED CONSOLIDATED
BALANCE SHEETS(IN THOUSANDS)

|                                                                  | SEPTEMBER 30, |          | DECEMBER 31,
|----------------------------------------------------------------- | ------------- | -------- | ------------
|                                                                  | 2009          |          | 2008        
|                                                                  | (UNAUDITED)   |          |             
|ASSETS                                                            |               |          |             
|Current
      assets:                                             |               |          |             
|Cash and cash
      equivalents                                   | $             | 97,869   |             
|Restricted
      cash                                             |               | 791      |             
|Marketable
      securities                                       |               | 80,748   |             
|Interest and
      other receivables                              |               | 1,041    |             
|Current
      portion of prepaid and other assets                 |               | 4,234    |             
|Total current assets                                              |               | 184,683  |             
|Noncurrent portion of prepaid assets                              |               | 1,523    |             
|Investments in
      licensees                                    |               | 2,010    |             
|Property and equipment, net                                       |               | 4,265    |             
|Deposits and
      other assets                                   |               | 441      |             
|                                                                  | $             | 192,922  |             
|                                                                  |               |          |             
|LIABILITIES AND STOCKHOLDERS EQUITY                              |               |          |             
|Current liabilities:                                              |               |          |             
|Accounts
      payable                                            | $             | 2,008    |             
|Accrued
      compensation                                        |               | 2,633    |             
|Accrued
      liabilities (including amounts for related parties: |               |          |             
|2009-none, 2008-$270)                                             |               | 2,677    |             
|Current
      portion of deferred revenue                         |               | 700      |             
|Fair value of
      derivatives                                   |               | 1,341    |             
|Current
      portion of advance payment from related party for   |               |          |             
|research and development, net                                     |               |         |             
|Total current liabilities                                         |               | 9,359    |             
|Noncurrent portion of deferred revenue                            |               | 525      |             
|Commitments and contingencies                                     |               |          |             
|Stockholders equity:                                             |               |          |             
|Common
      stock                                                |               | 92       |             
|Additional
      paid-in capital                                  |               | 741,940  |             
|Accumulated
      deficit                                         |               | (558,876 | )           
|Accumulated
      other comprehensive (loss) income               |               | (118     | )           
|Total stockholders equity                                        |               | 183,038  |             
|                                                                  | $             | 192,922  |             

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 |            | NINE MONTHS ENDED
|---------------------------------------------------------- | ------------------ | ---------- | -----------------
|                                                           | SEPTEMBER 30,      |            | SEPTEMBER 30,    
|                                                           | 2009               |            | 2008             
|Revenues from collaborative                                |                    |            |                  
|agreements
      (including amounts from related           |                    |            |                  
|parties:
      three months - 2009-none, 2008-$20;         |                    |            |                  
|nine
      months - 2009-none, 2008-$79)                   | $                  | 225        |                  
|License fees and
      royalties (including amounts        |                    |            |                  
|from related
      parties: three months -                 |                    |            |                  
|2009-none,
      2008-none; nine months -                  |                    |            |                  
|2009-none,
      2008-$1,500)                              |                    | 269        |                  
|Total revenues                                             |                    | 494        |                  
|                                                           |                    |            |                  
|Operating expenses:                                        |                    |            |                  
|Research and
      development (including                  |                    |            |                  
|amounts for related parties:                               |                    |            |                  
|three months - 2009-$397, 2008-$184;                       |                    |            |                  
|nine months - 2009-$1,328, 2008-$502)                      |                    | 13,395     |                  
|General and
      administrative                           |                    | 3,499      |                  
|Total operating expenses                                   |                    | 16,894     |                  
|Loss from operations                                       |                    | (16,400    | )                
|Unrealized gain (loss) on derivatives, net                 |                    | 966        |                  
|Interest and other income                                  |                    | 240        |                  
|Losses recognized under equity method
    investment       |                    |           |                  
|Interest and other expense                                 |                    | (30        | )                
|Net loss                                                   |                    | (15,224    | )                
|Deemed dividend on derivatives                             |                    |           |                  
|Net loss applicable to common stockholders                 | $                  | (15,224    | )                
|                                                           |                    |            |                  
|Basic and diluted net loss per share applicable            |                    |            |                  
|to common
      stockholders                               |                    |            |                  
|                                                           |                    |            |                  
|Net loss per share applicable to common
      stockholders | $                  | (0.17      | )                
|                                                           |                    |            |                  
|Shares used in computing net loss per share                |                    |            |                  
|applicable to common stockholders                          |                    | 89,402,642 |                  

See accompanying notes.

2

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GERON CORPORATION

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

|                                                                                  | NINE MONTHS ENDED
|--------------------------------------------------------------------------------- | -----------------
|                                                                                  | SEPTEMBER 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                                                                   |                  
|Translation
      adjustment                                                      |                  
|Net cash used in operating activities                                             |                  
|                                                                                  |                  
|Cash flows from investing activities:                                             |                  
|Restricted cash transfer                                                          |                  
|Loan to related party                                                             |                  
|Investment in licensee, net                                                       |                  
|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 StatementsSeptember 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 September 30, 2009 and condensed consolidated statements of operations for
the three and nine months ended September 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 nine month
periods ended September 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 are 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 1,279,520 and 311,707 shares
for 2009 and 2008, respectively, related to outstanding options, restricted
stock and warrants (as determined using the treasury stock method at the
estimated average market value).

Use of Estimates

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

Fair Value of Financial
Instruments

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 marketable securities. We place our cash and cash equivalents in
money market funds. Our current investments include U.S. Treasury securities,
U.S. government-sponsored enterprise securities and commercial paper with
original maturities ranging from five to eleven months.

4

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

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 associated with credit losses judged as other-than-temporary 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.

Fair Value of
Derivatives

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.

5

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

Revenue Recognition

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.

Restricted Cash

The components of restricted cash
are as follows:

|                                                           | September 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

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 using accounting guidance in effect
at that time and following the straight-line attribution method.

6

---

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

The
following table summarizes the stock-based compensation expense related to stock
options, restricted stock awards and employee stock purchases for the three and
nine months ended September 30, 2009 and 2008 which was allocated as
follows:

|                                                                      | Three Months Ended |       | Nine Months Ended
|--------------------------------------------------------------------- | ------------------ | ----- | -----------------
|                                                                      | September 30,      |       | September 30,    
|                                                                      | 2009               |       | 2008             
|                                                                      | (In thousands)    
|Research and development                                              | $                  | 1,588 |                  
|General and
      administrative                                      |                    | 1,236 |                  
|Stock-based compensation expense included in operating
      expenses | $                  | 2,824 |                  

Stock Options

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

|                                | Nine Months Ended September
      30,
|------------------------------- | -------------------------------------
|                                | 2009                                 
|Dividend yield                  | None                                 
|Expected
      volatility range | 0.630 to
      0.631                 
|Risk-free interest rate range   | 1.54% to 2.52%                       
|Expected
      term             | 5 yrs                                

Employee Stock Purchase
Plan

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

|                                | Nine Months Ended September
      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 range 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 nine months ended September 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. Forfeitures have been estimated
at the time of grant using historical experience and revised, if necessary, in
subsequent periods if actual forfeitures differ from those estimates.

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.

7

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

Non-Employee Stock-Based
Awards

For our
non-employee stock-based awards, the measurement date on which the fair value of
the stock-based award is calculated 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.

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 nine months ended September 30, 2009 and
2008 are as follows:

|                                                   | Three Months Ended |         | Nine Months Ended
|-------------------------------------------------- | ------------------ | ------- | -----------------
|                                                   | September 30,      |         | September 30,    
|                                                   | 2009               |         | 2008             
|                                                   | (In thousands)    
|Net loss                                           | $                  | (15,224 | )                
|Change in
      unrealized (loss) gain on          |                    |         |                  
|available-for-sale securities and marketable       |                    |         |                  
|investments
      in licensees                     |                    | (88     | )                
|Change in foreign currency translation adjustments |                    | (1      | )                
|Comprehensive
      loss                           | $                  | (15,313 | )                

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

|                                                          | September 30, 2009 |      | December 31, 2008
|--------------------------------------------------------- | ------------------ | ---- | -----------------
|                                                          | (In thousands)    
|Net unrealized gains on available-for-sale securities and |                    |      |                  
|marketable
      investments in licensees                 | $                  | 53   |                  
|Foreign currency
      translation adjustments            |                    | (171 | )                
|Accumulated other comprehensive
      (loss) income       | $                  | (118 | )                

Recently Issued Accounting
Guidance

In June
2009, the Financial Accounting Standards Board (FASB) issued a new accounting
statement which changes the consolidation model for variable interest entities.
This statement requires companies to qualitatively assess the determination of
the primary beneficiary of a variable interest entity (VIE) based on whether the
entity (i) has the power to direct matters that most significantly impact the
activities of the VIE, and (ii) has the obligation to absorb losses or the right
to receive benefits of the VIE that could potentially be significant to the VIE.
The new accounting statement is effective for us on January 1, 2010. We are
evaluating the potential impact, if any, of this new statement on our
consolidated financial statements.

In August
2009, the FASB issued new guidance regarding fair value measurement when a
quoted price in an active market for an identical liability is not available.
Under those circumstances, the fair value of the liability would be determined
using one or more of the techniques prescribed by the FASB. The new guidance
became effective for us on October 1, 2009. We are evaluating the potential
impact, if any, of this new guidance on our consolidated financial
statements.

In September
2009, the FASB ratified a new accounting statement that addresses the use of
estimated selling prices (ESP) in the absence of vendor-specific objective
evidence (VSOE) or other third party evidence (TPE) of the selling price for
deliverables in a multiple-element arrangement. This statement requires the use
of a relative-selling price model for allocating an arrangements total
consideration to its individual elements. Under this model, the ESP is used for
both the delivered and undelivered elements that do not have VSOE or TPE of the
selling price. The new statement is applicable prospectively for any
arrangements we enter into after January 1, 2011. We are evaluating the
potential impact, if any, of this new statement on our consolidated financial
statements.

8

---

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

2. FAIR VALUE
MEASUREMENTS

We
categorize assets and liabilities recorded at fair value in our condensed
consolidated balance sheet based upon the level of judgment associated with
inputs used to measure their value. The categories are 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 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 category for such
instruments.

Cash Equivalents and Marketable
Securities Available-for-Sale

Where quoted
prices are available in an active market, securities are categorized as Level 1.
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 categorized as Level 1.
Level 1 securities include publicly traded equities. Significant investments in
licensees accounted for using the equity method of accounting or equity securities
in non-marketable companies are not measured at fair value and are not assigned
a category level.

As of
September 30, 2009 and December 31, 2008, the carrying values of our investments
in non-marketable nonpublic companies were $2,010,000 and $656,000,
respectively. We recognized no charges for the three months ended September 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 nine
months ended September 30, 2009 and 2008, respectively, related to
other-than-temporary declines in fair values of certain of our investments in
licensees. We recognized net realized losses of $7,000 and $26,000 for the three
and nine months ended September 30, 2009, respectively, related to sales of
investments in licensees. In connection with the sales, $7,000 and $26,000 of
previously unrecognized unrealized loss was eliminated from accumulated other
comprehensive loss for the three and nine months ended September 30, 2009,
respectively. We did not realize any losses from such sales for the three and
nine months ended September 30, 2008. See Note 3 on Joint Venture and Related
Party Transactions for further discussion of investments in
licensees.

9

---

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

Marketable debt securities by security type at September 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                                 |  | $                    | 97,051 |            | $ |               |  | $        
|Restricted cash:                                         |  |                      |        |            |   |                |  |          
|Certificates of
      deposit                            |  | $                    | 791    |            | $ |               |  | $        
|Marketable securities:                                   |  |                      |        |            |   |                |  |          
|U.S. Treasury securities (due
      in less than 1 year) |  | $                    | 42,719 |            | $ | 21             |  | $        
|Government-sponsored
      enterprise securities         |  |                      |        |            |   |                |  |          
|(due in less than 1 year)                                |  |                      | 25,117 |            |   | 13             |  |          
|Commercial paper (due in less
      than 1 year)         |  |                      | 12,859 |            |   | 19             |  |          
|                                                         |  | $                    | 80,695 |            | $ | 53             |  | $        

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      |            |   |           |  |                 
|                                                 |  | $              | 53,281  |            | $ | 237        |  | $               

There were no unrealized losses for marketable debt and equity securities
at September 30, 2009.

Marketable equity securities with unrealized losses at 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 December 31, 2008:     |                     |   |                      |   |           
|Investments in
    licensees | $                   |  |                      | $ |          

The gross
unrealized losses related to investments in licensees were a result of declining
valuations for those biopharmaceutical companies. We determined that the gross
unrealized losses on our investments in licensees as of December 31, 2008 were
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.

10

---

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

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 categorization.

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

|                                |  | September 30,
      2009 |  | December 31,
      2008
|------------------------------- |  | ------------------------ |  | -----------------------
|Dividend yield                  |  | None                     |  | None                   
|Expected
      volatility range |  | 0.628 to
      0.631     |  | 0.749 to
      0.758   
|Risk-free interest rate range   |  | 0.18% to 2.31%           |  | 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 range 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
September 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 September 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 |                       | 284,600 |                     
|               |  |          |      |             |                    |            |                  |                       |         |                     

For the
three and nine months ended September 30, 2009, $100,000 and $130,000,
respectively, were reclassified from current liabilities to stockholders equity
related to exercises of non-employee options classified as derivatives. No such
reclassifications were made for the three and nine months ended September 30,
2008.

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 September 30, 2009,
and indicates the fair value category assigned.

|                                               |  | 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)                           |  |                                                      
|Total                                          |  | $                                                    

11

---

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

|                     |  | Fair Value Measurements at Reporting
      Date Using
|-------------------- |  | -----------------------------------------------------
|                     |  |                                                      
|                     |  | Quoted Prices in                                     
|                     |  | Active Markets for                                   
|                     |  | Identical Assets                                     
|(In
      thousands) |  | Level 1                                              
|Liabilities          |  |                                                      
|Derivatives (3)      |  | $                                                    

|(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 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 nine
months ended September 30, 2009 (including the change in fair value), for
financial instruments in the Level 3 category. When a determination is made to
categorize 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 September 30,
      2009                                  
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  |                                                                              
|                       |  | Fair Value at                                                                
|                       |  | June 30,                                                                     
|(In thousands)         |  | 2009                                                                         
|Derivative liabilities |  | $                                                                            

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

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

12

---

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

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
suspended 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.

In August
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
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 was 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.

In September
2008, Geron provided a $1,500,000 loan to ViaGen in connection with ViaGens
acquisition of an interest in an unrelated company. The loan bore an interest
rate of 6% per annum and was convertible into ViaGen equity at Gerons option at
the then current market value. Since the proceeds of the loan did not fund prior
ViaGen losses and represented additional financial support to ViaGen, we applied
the equity method of accounting to the basis of the loan and recognized losses
of $656,000 and $229,000 for our proportionate share of ViaGens operating
losses for the nine months ended September 30, 2009 and 2008, respectively,
which has been recorded in the condensed consolidated statements of operations
under losses recognized under equity method investment. Since the loan basis was
reduced to zero at March 31, 2009, we suspended the equity method of
accounting.

In September
2009, Geron purchased $3,603,000 in equity from ViaGen and simultaneously Exeter
converted its outstanding debt with ViaGen into equity. The new equity purchase
did not fund prior ViaGen losses and represented additional financial support to
ViaGen. Ownership of ViaGen upon consummation of the transactions and at
September 30, 2009 was as follows: Exeter  70%; Geron  28%; and Smithfield
Foods  2%. Subsequent to our equity purchase, Geron received $1,593,000 from
ViaGen in repayment of the 2008 loan, including accrued interest. As the source
of funds to repay the loan and accrued interest was derived from our equity
purchase, the equity investment in ViaGen was recorded net of the loan and
interest payment. Gerons net investment in ViaGen at September 30, 2009 was
$2,010,000. We have no commitments to provide financial support or obligations
to perform services or other activities for ViaGen.

With the new
investment in 2009, we will resume applying the equity method of accounting and
will increase (decrease) the carrying value of our investment by our
proportionate share of ViaGens earnings (losses). If equity method losses
exceed the carrying value of the investment, losses will be 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. If 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.

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 preclinical 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.

13

---

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

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. As of September 30, 2009, all of the contributions
from BRC had been expended.

For the
three and nine months ended September 30, 2009, we incurred related party
research and development costs of $397,000 and $1,328,000, respectively,
compared to $184,000 and $502,000, for the comparable 2008 periods. For the
three and nine months ended September 30, 2009, we earned no related party
revenue, compared to $20,000 and $79,000, for the comparable 2008 periods. As of
September 30, 2009 and December 31, 2008, the net balance of the advance payment
from BRC was zero and $440,000, respectively.

4. STOCKHOLDERS EQUITY

Vendor Stock Issuance

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. As of September 30, 2009, $414,000 remained as a prepaid asset which
is expected to be expensed over the next three months.

Offering of Common Stock and
Warrants

In September
2009, we sold 550,000 shares of Geron common stock (Shares) and warrants to
purchase an additional 150,000 shares of common stock with an exercise price of
$9.00 per share (Warrants) to certain institutional investors at a price of
$6.55 per share for total gross proceeds of $3,603,000. The Shares, Warrants and
shares of common stock underlying the warrants (Warrant Shares) were issued
through a prospectus supplement to an effective shelf registration statement.
The Warrants are immediately exercisable for a period of five years from the
date of issuance. The Shares, Warrants and Warrant Shares are subject to a one
year lock-up which prohibits the sale or other disposition of these securities
over the one year lock-up period unless certain price thresholds for Geron
common stock are met.

14

---

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

5. COLLABORATIVE
AGREEMENT

In June
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 received upfront non-refundable license
payments under the exclusive license and sublicense and can receive milestone
payments upon achievement of certain commercial development and product sales
events and royalties on future product sales. Under the alliance program, GEHC
is 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, coordinates and manages the alliance
program.

License
payments under the GEHC agreement were recorded as deferred revenue upon receipt
and are being 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 is being 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.
For the three and nine months ended September 30, 2009, we recognized $225,000
as revenue from collaborative agreements and $175,000 in license fee revenue in
connection with this agreement.

6. SEGMENT INFORMATION

Our
executive management team represents our chief decision maker. 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.

7. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS DATA

Supplemental
schedule of non-cash operating and investing activities:

|                                                                 | Nine Months Ended
|---------------------------------------------------------------- | -----------------
|                                                                 | September 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 October 1, 2009 to October 30, 2009, the filing
date of this Form 10-Q, and have determined no events to be
disclosed.

15

---

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. We are advancing an anti-cancer drug and a cancer vaccine that target
the enzyme telomerase through multiple clinical trials in different
cancers.

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 nine months ended September 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.

16

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RESULTS OF OPERATIONS

Revenues

We
recognized revenues of $225,000 from collaborative agreements for the three and
nine months ended September 30, 2009, compared to $74,000 and $240,000 for the
comparable 2008 periods. Revenues for 2009 reflect revenue recognized under our
collaboration with GE Healthcare, Ltd. Revenues in 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 $239,000 and $765,000 for the
three and nine months ended September 30, 2009, respectively, compared to
$267,000 and $1.9 million for the comparable 2008 periods related to our various
agreements. In 2009, license fees primarily reflected revenue recognized from
upfront license fee payments under our collaboration with GE Healthcare. 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 (FDA) addressing food products made from cloned
animals or their progeny. We expect to recognize revenues of $175,000 for the
remainder of 2009, $700,000 in 2010, $350,000 in 2011 and none thereafter
related to our existing deferred revenue. Current revenues may not be predictive
of future revenues.

We received
royalties of $30,000 and $131,000 for the three and nine months ended September
30, 2009, respectively, compared to $26,000 and $78,000 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 $13.4 million and $42.3 million for the three and nine
months ended September 30, 2009, respectively, compared to $14.2 million and
$39.4 million for the comparable 2008 periods. The decrease in research and
development expenses for the 2009 third quarter compared to the 2008 third
quarter was primarily the net result of higher process development costs of
$642,000 for our hESCs, increased clinical trial costs of $230,000 as a result
of increased patient enrollment for imetelstat and GRNVAC1 trials, and increased
personnel costs for additional headcount of $545,000, offset by reduced
manufacturing costs of $1.5 million due to the timing of imetelstat drug
purchases for clinical trials and reduced preclinical study costs of $843,000.
The increase in research and development expenses for the first nine months of
2009 compared to first nine months of 2008 was primarily due to increased
clinical trial costs of $1.3 million and higher personnel related costs of $1.1
million. Overall, we expect research and development expenses to increase as we
incur expenses related to clinical trials for imetelstat and GRNVAC1 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
imetelstat:

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

17

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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 two patients with relapsed
and refractory multiple myeloma in the ongoing clinical trial of imetelstat
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
  toxicology drug testing and the treatment of myocardial disease;
- 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. Currently, the human clinical trial of GRNOPC1,
our hESC-derived therapy targeted for the treatment of acute spinal cord injury,
has been placed on clinical hold by the FDA. We are in discussions with the
agency to answer its questions and proceed with the clinical trial.

18

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

|                     | Three Months Ended |        | Nine Months Ended
|-------------------- | ------------------ | ------ | -----------------
|                     | September 30,      |        | September 30,    
|                     | 2009               |        | 2008             
|                     | (Unaudited)       
|Oncology             | $                  | 6,722  |                  
|hESC
      Therapies |                    | 6,673  |                  
|Total                | $                  | 13,395 |                  

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.

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 $3.5 million and $10.7 million for the three and
nine months ended September 30, 2009, respectively, compared to $4.1 million and
$12.2 million for the comparable 2008 periods. The decrease in general and
administrative expenses for the 2009 third quarter compared to the 2008 third
quarter was primarily due to reduced legal costs associated with our patents of
$104,000 and lower consulting costs of $134,000. The decrease in general and
administrative expenses for the first nine months of 2009 compared to the first
nine months of 2008 was primarily due to reduced legal costs associated with our
patents of $384,000, decreased equity-based non-cash compensation expense of
$499,000 and lower consulting costs of $279,000. We currently anticipate general
and administrative expenses to remain consistent with current levels.

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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. 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
an unrealized gain of $966,000 and an unrealized loss of $287,000 on derivatives
for the three and nine months ended September 30, 2009, respectively, compared
to an unrealized loss of $162,000 and an unrealized gain of $739,000 for the
comparable 2008 periods. The unrealized gains and losses on derivatives for 2009
and 2008 primarily reflect the change in fair values of derivative liabilities
as a result of fluctuating common stock values as of the end of each reporting
period in comparison to prior reporting periods.

Interest and Other
Income

Interest
income was $240,000 and $1.1 million for the three and nine months ended
September 30, 2009, respectively, compared to $1.2 million and $4.5 million for
the comparable 2008 periods. The decrease in interest income for the 2009
periods compared to the 2008 periods was primarily due to lower 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 represented additional financial support to ViaGen.

In September
2009, we provided $3.6 million as a new equity investment in ViaGen and also
received $1.6 million from ViaGen in repayment of our loan, resulting in a net
investment of $2.0 million. The new investment in 2009 did not fund prior ViaGen
losses and represented 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 nine months
ended September 30, 2009, respectively, and losses of $229,000 for the
comparable 2008 periods.

Interest and Other
Expense

Interest and
other expense was $30,000 and $116,000 for the three and nine months ended
September 30, 2009, respectively, compared to $23,000 and $71,000 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 $15.2 million and $52.0 million for the
three and nine months ended September 30, 2009, respectively, compared to $17.2
million and $44.4 million for the comparable 2008 periods. The decrease in net
loss for the 2009 third quarter compared to the 2008 third quarter was primarily
the result of reduced research and development expenses associated with the
timing of imetelstat drug purchases for clinical trials and unrealized gains on
the fair value of derivative liabilities, offset by decreased interest income.
The increase in net loss for the first nine months of 2009 compared to the first
nine months of 2008 was primarily due to decreased interest income, reduced
revenues from milestones, increased research and development expenses and
unrealized losses on the fair value of derivative liabilities.

20

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LIQUIDITY AND CAPITAL
RESOURCES

Cash,
restricted cash, cash equivalents and marketable securities at September 30,
2009 were $179.4 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.

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, imetelstat, 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 nine months ended September 30, 2009 and 2008 was
$31.8 million and $30.6 million, respectively. The increase in net cash used for
operations in 2009 was primarily the result of decreased usage of common stock
in exchange for services provided by vendors.

Cash
Flows from Investing Activities.Net cash
used in investing activities was $31.2million for the nine months ended September
30, 2009, compared to net cash provided by investing activities of $6.8 million
for the comparable 2008 period. The decrease in net cash provided by investing
activities reflected increased marketable securities purchases.

As of
September 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.

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Cash
Flows from Financing Activities. Net cash
provided by financing activities was $51.5 million for the nine months ended
September 30, 2009, compared to net cash used in financing activities of
$342,000 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. In
September 2009, we sold 550,000 shares of Geron common stock and warrants to
purchase an additional 150,000 shares of common stock with an exercise price of
$9.00 per share to certain institutional investors at a price of $6.55 per share
for total gross proceeds of $3.6 million.

Contractual Obligations

As of September 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 |  | $                               

|(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 in
      the event of 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 each common stock issuance
      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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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.

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Interest
Rate Sensitivity. The fair value of our cash
equivalents and marketable securities at September 30, 2009 was $177.8 million.
These investments include $97.1 million of cash equivalents which are due in
less than 90 days and $80.7 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 September 30, 2009, there was an immaterial currency
exchange impact from our intercompany transactions. As of September 30, 2009, we
did not engage in foreign currency hedging activities.

ITEM 4. CONTROLS AND
PROCEDURES

(a)Evaluation of Disclosure Controls and
Procedures. The Securities and Exchange
Commission defines the term disclosure controls and procedures to mean a
companys controls and other procedures that are designed to ensure that
information required to be disclosed in the reports that it files or submits
under the Securities Exchange Act of 1934, 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 September
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.

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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, imetelstat, 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. Currently,
the human clinical trial of GRNOPC1, our hESC-derived therapy targeted for the
treatment of acute spinal cord injury, has been placed on clinical hold by the
U.S. Food and Drug Administration (FDA). We are in discussions with the agency
to answer its questions and proceed with the clinical trial. 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, imetelstat, GRNVAC1 and GRNOPC1, which could adversely affect our
business and cause a sharp drop in our stock price.

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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.

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
September 30, 2009, our accumulated deficit was approximately $559 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.

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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.

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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.

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.

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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.

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

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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. The Patent Office challenged
the court decision through an appeal to the U.S. Court of Appeals for the
Federal Circuit (CAFC). The CAFC 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). Most
recently the Patent Office has rescinded some of the contested new rules and it
is possible that the appeal will be dismissed. At this point we do not know how
the appeal will be resolved or whether the Patent Office will introduce new
modified rules to replace those recently rescinded.

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

Publication
of discoveries in scientific or patent literature tends to lag behind actual
discoveries by at least several months and sometimes several years. Therefore,
the persons or entities that we or our licensors name as inventors in our
patents and patent applications may not have been the first to invent the
inventions disclosed in the patent applications or patents, or the first to file
patent applications for these inventions. As a result, we may not be able to
obtain patents for discoveries that we otherwise would consider patentable and
that we consider to be extremely significant to our future success.

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

Where
several parties seek U.S. patent protection for the same technology, the Patent
Office may declare an interference proceeding in order to ascertain the party to
which the patent should be issued. Patent interferences are typically complex,
highly contested legal proceedings, subject to appeal. They are usually
expensive and prolonged, and can cause significant delay
in the issuance of patents. Moreover, parties that receive an adverse decision
in interference can lose important patent rights. Our pending patent
applications, or our issued patents, may be drawn into interference proceedings
which may delay or prevent the issuance of patents, or result in the loss of
issued patent rights. As more groups become engaged in scientific research and
product development in the areas of telomerase biology and embryonic stem cells,
the risk of our patents being challenged through patent interferences,
oppositions, reexaminations or other means will likely
increase.

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

Outside of
the United States, certain jurisdictions, such as Europe, New Zealand and
Australia, permit oppositions to be filed against the granting of patents.
Because our intent is to commercialize products internationally, securing both
proprietary protection and freedom to operate outside of the United States is
important to our business. We are involved in both opposing the grant of patents
to others through such opposition proceedings and in defending our patent
applications against oppositions filed by others. For example, we have 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;

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- reimbursement coverage;
- price; and
- patent position, including potentially dominant patent positions of
  others.

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

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

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

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

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

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 September 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 September 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;

36

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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.

The sale of a substantial number of
shares of our common stock in the public market, or the perception that such
sales could occur, could significantly and negatively affect the market price
for our common stock. As of September 30, 2009, we had 200,000,000 shares of
common stock authorized for issuance and 91,612,116 shares of common stock
outstanding. In addition, as of September 30, 2009, we have reserved for future
issuance approximately 25,931,319 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

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. As of September 30, 2009, $414,000 remained as a prepaid asset which
is expected to be expensed over the next three months.

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

Purchases of Equity Securities by the
Issuer and Affiliated Purchasers

None.

ITEM 3. DEFAULTS UPON SENIOR
SECURITIES

None.

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

None.

ITEM 5. OTHER
INFORMATION

None.

ITEM 6. EXHIBITS

|ExhibitNumber |      | Description
|------------- | ---- | -----------
|              | 10.1 |            
|              |      |            
|              | 31.1 |            
|              |     
|              | 31.2 |            
|              |     
|              | 32.1 |            
|              |     
|              | 32.2 |            

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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: October 30, 2009 |                  

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EXHIBIT INDEX

|ExhibitNumber |      | Description
|------------- | ---- | -----------
|              | 10.1 |            
|              |      |            
|              | 31.1 |            
|              |      |            
|              | 31.2 |            
|              |      |            
|              | 32.1 |            
|              |     
|              | 32.2 |            

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