UPDATE 3-BioMS shares jump on positive trial ruling

* Panel urges continuation of dirucotide trial

* Shares rise as much as 12.6 percent (Adds background; updates share price)

TORONTO, April 14 (Reuters) - BioMS (MS.TO) shares jumped more than 12 percent on Tuesday after an independent safety drug board recommended the biotech company continue trials of its multiple sclerosis treatment.

The small Edmonton, Alberta-based company said the U.S. Data Safety Monitoring Board completed a safety analysis of its phase 3 Maestro-03 trial of dirucotide, used for the treatment of secondary progressive MS, (SPMS) and ruled that the company should continue.

SPMS is characterized by a steady progression of clinical neurological damage, with or without superimposed relapses and minor remissions.

Approximately 2.5 million people worldwide have MS, including about 400,000 in the United States and 50,000 in Canada.

Dirucotide is being studied in two late-stage trials -- in the United States and across Europe and Canada -- as a treatment for SPMS. Key results are due later this year, with approval targeted in 2011 or 2012.

"We believe the Data Safety Monitoring Board's decision today to continue the trial bodes well for the safety of the drug, but in our view does not impact the potential efficacy results coming out, which we continue to believe to be risky, but if it works could be a major positive catalyst for the stock," said Maher Yaghi, an analyst at Desjardins Securities in Montreal.

Yaghi said positive results could propel the company's stock to as high as C$15 a share.

BioMS shares were up 4.4 percent at C$2.40 on the Toronto Stock Exchange on Tuesday afternoon, after rising 12.6 percent to C$2.59 earlier in the session.

The shares tumbled more than 50 percent in late January after studies showed the treatment failed to meet a main goal in a mid-stage study.

The study, when used by patients suffering from relapsing-remitting multiple sclerosis (RRMS) showed the drug did not prevent symptoms from coming back. People who took the drug were just as likely to have symptoms return after 15 months as patients who did not take it.

The drug, did, however, show signs of slowing down the progression of the crippling disease.

($1=$1.21 Canadian) (Reporting by Scott Anderson, additional reporting by Richa Dubey in Bangalore; editing by Rob Wilson)