Geron's (GERN - Get Report) experimental myelofibrosis drug imetelstat will be co-developed by Johnson & Johnson (JNJ - Get Report) under a global partnership agreement announced Thursday.

J&J is paying $35 million upfront to Geron for rights to the drug. The two companies will share development costs equally though Geron is eligible for another $900 million in payments based on future development and regulatory milestones. If imetelstat is approved, Geron will receive royalties from J&J based on the drug's sales. 

Geron shares were halted at $2.31 ahead of the partnership announcement.

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.

Updated results from a earlier phase II study of imetelstat in myelofibrosis were disclosed last week.

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