Osiris Therapeutics Inc said data from a study showed that its Grafix wound-care product proved "overwhelmingly" effective in treating diabetic foot ulcers, paving the way for increased reimbursement from insurers that will boost sales of the therapy.
Shares jumped to their highest in more than six years, doubling the value of the company to about $800 million.
Grafix, which was commercially launched in the United States in 2010, is a therapy that delivers stem cells directly to the site of a wound, helping regenerate tissue, while protecting the area from inflammation, scarring and infection.
The company said 62 percent of patients in the Grafix arm of the post-marketing trial achieved complete wound closure, compared with a 21 percent success rate in patients who received conventional treatment.
Osiris initiated the study in the second quarter of 2012 to obtain full reimbursement for use of Grafix in an outpatient setting.
"We are very impressed by today's data and believe that reimbursement for Grafix in (diabetic foot ulcers) could dramatically expand the sales opportunity," Piper Jaffray analyst Edward Tenthoff wrote in a note.
The company said it will move all patients in the study to the Grafix treatment immediately.
Shares of Columbia, Maryland-based were up 124 percent at $23.96 on Tuesday morning on the Nasdaq.
(Reporting by Pallavi Ail in Bangalore; Editing by Saumyadeb Chakrabarty)