Achillion Pharmaceuticals Inc said all patients treated with its experimental hepatitis C drug showed no detectable levels of the virus four weeks after the therapy, sending its shares up 18 percent.
The mid-stage trial tested Achillion's drug, ACH-3102, in 12 patients in combination with Gilead Sciences Inc's Sovaldi, also known as sofosbuvir.
Achievement of 100 percent cure rate confirms the competitive profile of NS5A, Wells Fargo Securities analyst Brian Abrahams wrote in a note.
ACH-3102 belongs to a promising new class of drugs that work by blocking the NS5A protein needed by the virus to replicate.
Achillion is also working on a different class of drugs known as nucleotide inhibitor, or "nuc", and which has been the focus of investors' attention.
"This class of drug (ACH-3102) is not as unique an asset as ACH-3422, that's the nuc. If they have positive data, then they are going to have a very high likelihood of takeout just like Idenix," FBR Capital Markets & Co analyst Andrew Berens told Reuters.
Merck & Co Inc agreed in June to buy Idenix Pharmaceuticals Inc for $3.85 billion to boost its hepatitis c drugs portfolio. Gilead paid $11 billion in cash to buy biotech company Pharmasset for Sovaldi.
Gilead said on Friday an arbitration panel ruled in its favor, rejecting patent infringement claims from Roche Holding AG related to Sovaldi.
Achillion is expected to report data from an early-stage trial of ACH-3422 at the end of this year.
Nucs, which comprise the backbone of current hepatitis C treatment, work by blocking a protein needed by the hepatitis C virus to replicate.
Hepatitis C drugs have a history of being expensive, largely because some 170 million people worldwide have the often-fatal liver disease and do not have good treatment options.
Sovaldi costs $84,000 for 12 weeks of treatment.
Achillion said it would begin treating 12 additional patients for six weeks with a once-daily dose of ACH-3102 and sofosbuvir. [ID:nGNXVBIEVa]
The trial excluded the older hepatitis C drug ribavirin, which can cause rashes, anemia and other side-effects.
Achillion shares gave up most of their early gains and were up 8 percent at $9.13 on Friday morning on the Nasdaq. The stock touched an 18-month high of $9.94.
About 12 million shares changed hands by 11:00 a.m. ET, more than four times their 10-day average volume.
(Reporting by Anand Basu in Bangalore; Editing by Simon Jennings)