Idera Pharmaceuticals Inc said its lead experimental drug for the most common form of psoriasis was found to be safe and well tolerated by patients after 12 weeks of treatment in a mid-stage trial.
The company's shares rose as much as 22 percent in early trading on the Nasdaq on Friday.
Idera said the drug, codenamed IMO-8400, reduced the severity of skin lesions in patients with plaque psoriasis, compared with a placebo.
The drug reduced the severity of lesions by 50 percent in nine of 20 patients and by 75 percent in four patients in the 32-patient study, the company said.
Idera said data from the study would support the drug's development as a treatment for rare autoimmune diseases and B-cell lymphoma, a type of blood cancer, with certain genetic mutations.
The data provides some validation of the drug's mechanism both for future B-cell lymphoma studies and for the potential of Idera's other drug, IMO-9200, Piper Jaffray analyst Edward Tenthoff wrote in a note.
The drug is being tested on patients with Waldenstrom's macroglobulinemia, a rare form of B-cell lymphoma, and diffuse large B-cell lymphoma.
Idera had earlier said it expected to start a study of IMO-9200 as a treatment for autoimmune diseases in the second half of this year. The drug, which has a mechanism similar to that of IMO-8400, is yet to be tested on humans.
Cowen and Co analyst Simos Simeonidis said IMO-8400, if approved for the two forms of B-cell lymphoma, could have peak sales of $1.1 billion in 2031.
The mid-stage trial of IMO-8400 tested three doses of the drug in patients with moderate-to-severe plaque psoriasis.
No treatment-related discontinuations or severe adverse events were reported in the study, the Cambridge, Massachusetts-based company said.
The drug works by inhibiting a type of protein that plays a role in worsening autoimmune diseases and B-cell lymphoma.
Idera's shares were up 13 percent at $4.39 in late morning trading. The stock jumped as much as 40 percent before the bell.
(Reporting by Vrinda Manocha in Bangalore; Editing by Kirti Pandey)