European health regulators recommended approval of Alexza Pharmaceuticals Inc's experimental drug Adasuve for controlling agitation in adults with schizophrenia and bipolar disorder, sending its shares up 19 percent.
Adasuve, Alexza's most advanced drug in development, will be the first treatment for schizophrenia and bipolar disorder that can be inhaled.
"... The beautiful part of (the drug) is that the clinician can give (patients) almost instantaneous response, whereas possibly hours of waiting for any other kind of oral medication, and that is the critical key," WBB Securities LLC analyst Steve Brozak told Reuters.
Three injectable drugs, Bristol-Myers Squibb's Abilify, Eli Lilly's Zyprexa and Pfizer Inc's Geodon, are currently approved to calm patients with schizophrenia or bipolar disorder.
The recommendation from the European Medicines Agency (EMA) will be forwarded to the European Commission, which normally endorses recommendations within two or three months.
Alexza estimates that as many as 8 million adults in the EU suffer from schizophrenia or bipolar disorder.
Adasuve is also under review by the U.S. Food and Drug Administration, with a decision expected by December 21.
"It's simply a question of when it will get approved," Brozak said.
The FDA denied approval to Adasuve in May, after it found deficiencies at the company's Mountain View, California manufacturing facility during an inspection.
Adasuve, which delivers an older antipsychotic drug called loxapine, passes through the lungs and into the bloodstream faster than a typical pill. Loxapine is available as an oral drug for schizophrenia.
Adasuve, which the EMA said should be administered only in a hospital, is delivered using Alexza's Staccato delivery device.
Two late-stage studies were conducted, and both demonstrated statistically significant reductions in agitation compared to a placebo, the company said. The study enrolled 344 adult patients with schizophrenia and 314 adult patients with bipolar disorder.
Alexza's shares jumped 19 percent to $6.25 before easing back to $5.75 by mid-morning on the Nasdaq on Friday.
(Additional reporting by Ben Hirschler in London; Editing by Sriraj Kalluvila)