Acadia Pharmaceuticals Inc said data from an initial late-stage trial would be sufficient to file for approval for its experimental antipsychotic drug for Parkinson's disease patients, and that it would not need to conduct an additional trial as planned earlier.
Shares of the company jumped 47 percent to $11.74 in early trade on Thursday. The stock was the biggest percentage gainer on the Nasdaq and more than four million shares had changed hands within the first 10 minutes of trading.
The U.S. Food and Drug Administration agreed with the company that data from the late-stage trial 020, along with supporting data from other studies, was sufficient to support its marketing application for the drug pimavanserin to treat Parkinson's disease psychosis (PDP).
Data from the trial, which was redesigned in mid-2012 after a previous trial had failed, showed that pimavanserin was significantly better than placebo at reducing psychotic effects of Parkinson's disease psychosis.
The drug failed to meet the goals of a previous Phase III study in 2009 due an unusually high placebo effect, according to the company.
Parkinson's disease psychosis is a debilitating disorder that develops in up to 60 percent of patients as their Parkinson's disease progresses.
Most current antipsychotic drugs cannot be used in Parkinson's disease patients as they block dopamine in the brain, which is the primary target for Parkinson's therapy, and can lead to a worsening of motor functions in such patients.
Pimavanserin works by selectively blocking certain serotonin receptors in the brain, but has no effect on dopamine.
Acadia, which plans to submit a marketing application for the drug near the end of 2014, is currently focused on completing the remaining elements of the drug's development program that are needed for the submission.
"We are very pleased with the outcome of our meeting with the FDA, which we expect will reduce substantially both the time and cost of our PDP development program," CEO Uli Hacksell said in a statement.
Pimavanserin is also being tested as a treatment for schizophrenia and Alzheimer's disease psychosis, according to Acadia's website. The company also has a pain drug and a glaucoma drug in the pipeline.
(Reporting by Esha Dey in Bangalore; Editing by Roshni Menon)