What happened

Geron Corporation (GERN -7.96%), a small-cap drugmaker, saw its shares continue their recent downturn Monday by falling by as much as 11.3% in early-morning trading. After gaining more than 200% earlier this year, the biotech's shares have now shed over 33% of their value in just the past week. 

Geron's stock is drifting lower in response to criticism from STAT's Adam Feuerstein regarding the efficacy of the company's one and only drug candidate, imetelstat. In the wake of Feuerstein's article, several law firms reportedly launched investigations, sparking fears that Geron may end on the wrong side of a class action lawsuit. 

Chalkboard chart illustrating a downward trend.

Image Source: Getty Images.

Geron's stock has bounced off of its early-morning lows to recover to some degree, but the drugmaker's stock is still down by 7% as of 11:31 a.m. EDT. 

So what

Shares of this battleground stock are going to remain volatile until the fate of the company's blood cancer partnership with biopharma heavyweight Johnson & Johnson (JNJ -1.41%) is a known entity. Having said that, J&J is scheduled to hold its first-quarter earnings call on April 17. In the past, J&J has used its Q1 earnings release to provide updates on its pharmaceutical pipeline. If Geron's imetelstat remains on that list, it could be a strong indicator of which direction this partnership is headed, especially this late in the game. 

Now what

The good news is that Geron's shareholders shouldn't have to wait long too find out if J&J plans on staying the course or not. Imetelstat's ongoing myelofibrosis study, after all, is set to wrap up in early May. As such, J&J and Geron expect to announce the trial's top-line data by the third quarter of this year -- if not earlier.

Although nothing is guaranteed in the high-risk world of cancer drug development, J&J has so far continued to tout imetelstat as a top experimental asset during recent investor presentations, and the company did bring the drug's inventor, Dr. Sergei Gryaznov, on board to work for its subsidiary Alios BioPharma. Perhaps these signs may ultimately turn out to be misleading indicators, but there's also no solid reason to believe that J&J has lost faith in this promising drug, either.