Zeltia shares soar after cancer drug approval

(Adds share price)

MADRID, July 20 (Reuters) - Shares in Spanish drug company Zeltia (ZEL.MC) soared on Friday after its cancer treatment Yondelis was recommended for approval in Europe, its first medicine to make its way to the market. Zeltia shares were 19.4 percent higher at 9.79 euros at 0800 GMT after the European Medicines Agency (EMEA) late on Thursday recommended Yondelis be approved by the European Commission, a process which usually takes a couple of months.

The company said Yondelis should be available to treat soft tissue sarcomas by the end of the year.

"This is excellent news," Zeltia Chairman Jose Maria Fernandez Sousa said in a statement.

"Under the expected timeframe, many European patients may have access to Yondelis before the end of the year," added Zeltia.

It gave no estimate of what financial impact Yondelis would have on Zeltia, which earns most of its money from selling paints and varnishes and whose PharmaMar biotechnology unit is researching marine organisms for medical use.

Zeltia's revenues were only 76 million euros ($105 million) last year. It made a net loss of 44 million euros.

EMEA's recommendation is a landmark for Zeltia and its most important product Yondelis, which was rejected by EU regulators in 2003.

That move meant Zeltia had to conduct new clinical trials on the drug, which is based on a tiny organism first found on the roots of mangrove trees in the Caribbean.

Zeltia said the new trials had shown Yondelis reduced the progression of tumours by 27 percent. More than 60 percent of patients taking the drug were still alive a year after starting the treatment, Zeltia added.

Yondelis was given orphan drug status to be used on soft tissue sarcoma -- a rare and usually fatal form of cancer that attacks muscles, fat or blood vessels -- in 2001 by European authorities and in 2004 by the U.S. Food and Drug Agency.

It was given the same status for use on ovarian cancer in 2003 in Europe and 2005 in the United States. Yondelis is now in Phase III trials for ovarian cancer and Phase II for ovarian and testicular cancer.

Yondelis will be sold by Zeltia's PharmaMar unit in Europe. It has a licensing agreement with U.S. group Johnson & Johnson (JNJ.N) for outside Europe.

((Reporting by Jane Barrett; editing by Quentin Bryar; Reuters Messaging: jane.barrett.reuters.com@reuters.net; email: jane.barrett@reuters.com; Tel: +34 91 585 8340))

($1=.7242 Euro) Keywords: ZELTIA YONDELIS/

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