UPDATE 3-Neurosearch shares double on Huntington's drug trial

* Firm says Huntexil positive in Phase III study

* Says starting talks with regulatory agencies

* Drug could become firm's first product on the market

* CEO: Huntexil could be launched early 2012

(Adds details, updates share price)

By Anna Ringstrom and Karin Jensen

COPENHAGEN, Feb 3 (Reuters) - Shares in biopharmaceuticals firm Neurosearch A/S (NEUR.CO) doubled in price on Wednesday after it announced positive results from a Phase III trial with a candidate Huntington's disease drug.

If approved, Huntexil could become the Danish company's first product on the market.

"This is of great importance for Neurosearch because it is the only product so close to coming to market," said Sydbank analyst Rune Dahl.

Chief Executive Flemming Pedersen said Neurosearch aimed to file a registration application for Huntexil by the end of this year and would seek rapid approval which could come by the end of 2011.

The drug could be launched at the beginning of 2012, he said.

"That's the time frame we have. We haven't announced anything concrete because there are so many parameters out of our hands, but that's the time frame we are looking at today," Pedersen told Reuters.

The shares rocketed to a 15-month high of 173.50 Danish crowns ($32.65) before cooling slightly to 168 crowns -- up 97.7 percent -- by 1550 GMT. The stock rose against the trend of a 1.6 percent fall in the DJ Stoxx European healthcare index .SXDP.

The stock is still far below its all-time high just above 400 crowns from March 2000.

The current price values the company at about $772 million.

Neurosearch's surge also sparked a rally in other Danish biopharma shares. Bavarian Nordic (BAVA.CO) rose 5 percent and Genmab (GEN.CO) shares rose 2.1 percent.

Jyske Bank analyst Frank Andersen raised his target price on Neurosearch twice in one day, first to 260 crowns from 165 crowns and then to 380 crowns, and repeated a "buy" recommendation on the back of the news.

POSITIVE TEST RESULTS

"Huntexil significantly improves motor functions in Huntington patients," Neurosearch said in a statement.

Data from 437 Huntington patients in the study showed that six months' treatment with Huntexil resulted in "significant improvements in a broader range of voluntary and involuntary motor symptoms associated with the disease," it said.

Huntexil was very well tolerated with adverse effects similar to placebo.

Neurosearch said it was starting talks with scientific advisors and regulatory agencies in Europe and the United States to discuss the outcome of the study and plans for submitting applications for market authorisation for Huntexil.

"This supports our 'buy' recommendation on the shares. This is very good news," Jyske Bank's Andersen said.

He said he had raised his target price on Neurosearch shares for the second time in one day because the treatment price with Huntexil should be higher than his previous estimate and in line with the treatment price for patients using Danish drug maker Lundbeck's (LUN.CO) Huntington's drug Xenazine.

Huntington's disease is a highly disabling, hereditary neurodegenerative genetic disorder which leads to damage of the nerve cells in certain areas of the brain. (Writing by John Acher; Editing by Greg Mahlich and Sharon Lindores)