Array Biopharma Inc said one of its drugs met the main goal of improving lung function in a mid-stage study among patients with mild to moderate persistent allergic asthma.
Array shares rose as much as 19 percent to $6.64 — their highest in nearly five years — on Tuesday morning.
Array said it was seeking a partner to develop the drug and Chief Executive Ron Squarer said there was substantial interest from key players in the field.
"In theory, with a partner we may look at higher doses of the drug. With the safety profile, there may be the potential to combine this drug with existing therapies," he said on a conference call with analysts.
Array, which develops drugs to treat cancer, diabetes and hepatitis C, has partnered with companies including AstraZeneca Plc, Amgen Inc and Eli Lilly and Co.
William Blair analyst John Sonnier said the study data looked comparable to a commonly used oral drug called Singulair.
Merck & Co Inc's Singulair generated more than $6 billion in annual sales before its cheaper generic versions became available in the United States last August.
Array said the mechanism of its drug, codenamed ARRY 502, had a potential role in allergic rhinitis and atopic dermatitis and the drug could be applied to the treatment of multiple diseases.
ARRY 502 inhibits a molecule that plays a part in increasing allergic inflammation.
The drug showed an improvement of 3.9 percent in pre-bronchodilator Forced Expiratory Volume in one second (FEV1), compared with a placebo.
FEV1 is the maximal amount of air that can be forcefully exhaled in one second and a measures of lung function.
The drug was well tolerated with fewer adverse events compared with the placebo.
The trial, which enrolled 184 patients in the Unites States, tested 200 mg of the drug dosed twice daily.
Asthma affects about 25 million people in the United States, and about 235 to 300 million worldwide, Array said.
Array shares were up nearly 12 percent at $6.23 in mid-morning trade on the Nasdaq.
(Reporting By Vrinda Manocha in Bangalore; Editing by Joyjeet Das)