Shares of Geron Corporation (GERN) soared as much as 30% in today's trading session after the company announced that it has established a partnership deal with a unit of Johnson & Johnson (JNJ) known as Jansen Biotech. The deal makes use of Geron's cancer drug  Imetelstat, which treats a rare form of a blood cancer. This rare form of blood cancer, myelofibrosis, has limited treatment options. 

The reason for the surge in share price for Geron is that the company is set to receive an upfront payment of $35 million and could eventually obtain $900 million as milestone payments are made. The scope of this deal far exceeds the current value because it has also been observed that Imetelstat may also be used to target other cancers such as AML -- Acute Myelogenous Leukemia - and Myelodisplastic Syndrome. Therefore Geron's value may rise higher over time as Imetelstat is applied to other forms of cancer. 

The current share price for Geron is at around $2.75 per share which would value the company with a market cap of around $435 million. As mentioned above, the company's share price and market cap should rise over time as additional cancers are targeted using Imetelstat.

According to The Street,

You can read more details about the terms of the Geron-J&J partnership in the company's 8-K, but to sum it up, J&J is making a conservative bet on imetelstat and doesn't have to commit fully until the drug generates more positive data. Starting in the middle of next year, Geron and J&J will conduct a larger phase II study of imetelstat in myelofibrosis patients. J&J will use results from that study to make a go/no-go decision on funding further development of the drug.

The motivation for Jansen Biotech performing this collaboration is the power that Imetelstat provides; in patients with Myelofibrosis, Imetelstat was able to reverse some of the effects of the cancer. This company is truly remarkable with their cancer compound and we believe that this is a great long term investment.