Chelsea Therapeutics International Ltd's CHTP.O shares more than doubled in value on Wednesday after an independent panel to the U.S. health regulator recommended an approval for the company's drug to treat a rare form of low blood pressure.
Chelsea's shares jumped as much as 151 percent to $5.78, touching their highest in two and a half years and valuing the company at $453 million.
Analysts, however, were cautious as the U.S. Food and Drug Administration rejected the drug in March 2012 even after a positive recommendation from an advisory committee and cited the need for more data.
The panel voted 16 to 1 in favor of the drug, Northera, on Tuesday.
"A degree of caution may be prudent until the FDA responds, however, given strength of regulatory opposition to the drug to date," Needham analyst Alan Carr wrote in a note.
Carr raised his price target on the stock to $8 from $4.
The FDA usually follows the recommendation of advisory panels, but is not bound to do so.
In briefing documents published on Friday before the panel's meeting, FDA reviewers said the drug was not effective enough to warrant approval.
Analysts said testimonials from patients about the drug's efficacy could have influenced the panel to vote in favor of Northera.
"There were multiple patients and caregivers whose dramatic, life-altering change with treatment may have softened the nitpicking about apparent variable efficacy in the trials," Wedbush analyst Liana Moussatos wrote in a note.
Northera, known generically as droxidopa, is intended to treat neurogenic orthostatic hypotension, a prolonged drop in blood pressure upon standing that causes dizziness, fainting and weakness.
The condition, which occurs mostly in the elderly, is associated with nervous system disorders, such as Parkinson's disease.
The FDA is expected to review the drug by February 14.
At least one analyst said the review time could be extended by three months beyond February 14 as the company reaches an agreement with the regulator on the product label, risk management strategy and post-approval requirements.
Chelsea shares were up 118 percent at $5.01 on Wednesday morning on the Nasdaq.
(Reporting by Vrinda Manocha in Bangalore; Editing by Kirti Pandey)