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. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.