Geron Corp. could get more than $900 million from a deal to develop its blood disorder drug imetelstat with a unit of Johnson & Johnson.

Geron said Janssen Biotech agreed to pay it $35 million upfront. The Menlo Park, California, company could receive as much as $900 million more as the drug is tested and if it is approved by regulators and reaches certain sales targets. Geron would also get royalties on sales of imetelstat.

Shares of Geron jumped 32 percent to $3.05 in extended trading Thursday. The stock closed Thursday at $2.31 and has lost about half its value this year.

The company is studying imetelstat as a treatment for myelofibrosis, a disease in which abnormal blood cells build up in bone marrow, forming thick scar tissue that slows the production of healthy blood cells. Geron says some patients treated with the drug in clinical trials went into remission or had a reversal of bone marrow fibrosis. Other myelofibrosis drugs treat the symptoms of the disease, included swelling of the spleen.

The companies plan to start a mid-stage trial of the drug in 2015. They also want to study imetelstat as a treatment for other blood diseases.