Amarin Corp Plc's shares jumped 38 percent following the U.S. Food and Drug Administration's surprise move to delay a decision on approval for an expanded use of the Irish drugmaker's blood fat-lowering drug.
Analysts expected the FDA to reject the wider use of the drug, Vascepa, after a panel of advisors in October said it should not be approved for a broader population until results from an additional study were analyzed.
Amarin's stock has lost nearly 63 percent of its value since then.
The FDA in October also revoked an agreement that guaranteed that the design of a late-stage trial of Vascepa was adequate to support a marketing application. Amarin appealed for a review, and the agency held up the decision on approval as it was still considering the appeal.
"(The delay) is a positive relative to Amarin getting a rejection. It's a positive that the FDA is considering their appeal," said Jon LeCroy, managing director and senior analyst at MKM Partners.
The FDA, which was to release its decision on Vascepa's wider use on Friday, did not assign a fresh action date, Amarin said.
The regulator is also viewing Amarin's appeal for reinstatement of the agreement and the approval for the drug's expanded use as "separate administrative decisions worthy of separate consideration". The agency plans to convey its decision on reinstating the agreement before January 15, the company said.
Vascepa was approved in 2012 to reduce high levels of triglycerides — a type of blood fat that can increase the risk of heart disease — in patients not taking cholesterol-lowering statins such as Pfizer Inc's Lipitor.
In a bid to broaden the drug's market and improve sales, Amarin applied for approval to sell Vascepa to patients with blood fat abnormalities who are at high risk of coronary heart disease and are taking statins.
Amarin's American depositary shares were up 31 percent at $2.08 in morning trading on the Nasdaq. They traded at around $15 when Vascepa won U.S. approval.
(Reporting by Zeba Siddiqui in Bangalore; Editing by Sriraj Kalluvila)