Geron Corporation’s share price leapt by almost a third during trading on the Nasdaq Stock Exchange yesterday after revealing that it had signed an agreement with Merck & Co to develop a cancer vaccine targeting the telomerase enzyme that is critical to the growth and progression of most cancers.

Under the terms of the agreement, Geron will receive an unspecified upfront payment, in addition to further milestone payments and royalties on future product sales. Merck has also agreed to acquire equity in Geron at a future date as part of the latter’s next round of financing. Additional financial details were not disclosed.

In addition, Merck has acquired an option to negotiate a separate deal for Geron’s dendritic cell-based telomerase vaccine that is currently in Phase I/II clinical trials. Dendritic cells are specialised that help the immune system to recognise cancer cells and Geron will receive an option payment from Merck in consideration for the option. The structure and terms of an agreement for the dendritic cell vaccine will be negotiated should Merck decide to exercise its rights under the option.