What happened

Shares of Geron Corp. (NASDAQ:GERN) gained as much as 21% in pre-market trading today after the clinical-stage biotech announced that a second internal review of imetelstat's ongoing clinical trials for two blood-based malignancies  -- lower risk myelodysplastic syndromes (MDS) and relapsed or refractory myelofibrosis (MF) -- warrants further investigation for both indications. Johnson & Johnson's (NYSE:JNJ) biotech subsidiary Janssen is handling the drug's clinical program through a collaborative license with Geron. 

A rocket in the sky

Image source: Getty Images.

So what

After imetelstat's first internal data review, its utility in myelofibrosis appeared to be in serious doubt. Janssen, after all, closed patient enrollment in the 4.7 mg/kg dosing arm of the study, and only detected an "encouraging trend" in the higher 9.4 mg/kg dosing arm. 

Today, however, the two companies reported that the second internal review supported the 9.4 mg/kg as an appropriate starting dose for patients with relapsed or refractory MF. While short on details, the good news is that imelstat appears to be providing a clinical benefit in MF worthy of additional investment by J&J and Janssen. 

Now what

Imetelstat's study in MF will reportedly continue unchanged, keeping the hope alive that this drug will ultimately garner multiple indications in the high-value hematology space. If so, it should turn out to be a blockbuster product. 

Additionally, J&J and Geron said that the second part of imetelstat's other trial in MDS will be submitted for refinements to the FDA. And if all goes according to plan, imetelstat could be in the pivotal phase of its trial for MDS by the fourth quarter of this year. 

The key takeaway is that imetelstat is starting to look like the real deal. So, while it's probably prudent to remain cautious with this small-cap biotech, it might be a good idea to start grabbing at least a few shares in case imetelstat does beat the odds and somehow lives up to the lofty expectations of J&J and Geron.  

George Budwell has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Johnson & Johnson. The Motley Fool has a disclosure policy.