What happened

Shares of Geron (NASDAQ:GERN), a clinical-stage developer of cancer therapeutics, surged 13% in April, according to data from S&P Global Market Intelligence. One major catalyst provided the foundation for Geron's excellent month: a long-awaited clinical data release.

So what

On April 10, Geron announced that its licensing partner, Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson (NYSE:JNJ), had completed its second internal data review of the IMerge and IMbark trials that respectively pertain to imetelstat as a treatment for myelodysplastic syndromes and myelofibrosis. As you can probably surmise from the move higher, things are moving along nicely after a bit of a hiccup following the first internal data review.

A lab researcher taking notes with a vial of blood in his hand.

Image source: Getty Images.

In the initial review of the IMbark study for myelofibrosis, Johnson & Johnson ceased study of the lower-dose 4.7 mg/kg because it was ineffective, which clearly concerned investors about the remaining dose of 9.4 mg/kg. However, the second review found sufficient evidence that the 9.4 mg/kg dose should be the starting dose for further studies. Though the press release didn't offer too many specifics, it did note a lower spleen response rate in front-line myelofibrosis patients than with other drugs, but imetelstat appeared to offer more appealing outcome measures with regard to relapsed or refractory myelofibrosis patients. Within the next year, Geron and J&J should be able to offer overall survival data from the study.

As for IMerge, part one of the phase 2/3 trial in patients with myelodysplastic syndromes demonstrated a similar safety profile to previous clinical trials. Additionally, the benefit and risk assessment of the eight-week and 24-week transfusion independence and hematologic improvement by erythroid response suggests continued development of the drug in lower-risk patients. Data is currently being culled from the study for the Food and Drug Administration (FDA). Should Johnson & Johnson move forward with the phase 3 portion of this two-part study, patient enrollment is expected to begin in the fourth quarter.

Now what

Johnson & Johnson took a pretty big gamble by betting on imetelstat, but it could wind up paying off for J&J and Geron's shareholders. The deal, which was forged back in Nov. 2014 and netted J&J Geron $35 million upfront and the ability to earn up to $900 million in milestone payments, may give J&J its next blockbuster drug.

A lab researcher using a pipette.

Image source: Getty Images.

For example, in early stage studies conducted prior to the tie-up with J&J, imetelstat demonstrated partial and complete responses in myelofibrosis patients, which was something never before seen in clinical studies. The only current FDA-approved drug for myelofibrosis treats symptoms associated with the disease, such as an enlarged spleen, and not the disease itself. With a drug targeting the actual disease, Geron's therapy could become a go-to drug for myelofibrosis patients, if approved.

If there is a downside here, it's that Geron's entire portfolio is imetelstat or bust. It means that clinical data is few and far between, leaving emotions and short-term thinking to rule the roost most of the time. I continue to lean toward seeing Geron succeed with imetelstat, but with only one horse in the stable, a trial failure would essentially wipe out much of your investment. That's something to keep in mind as you monitor Geron's progress.