Shares of Pain Therapeutics Inc (PTIE.O) and Durect Corp (DRRX.O) rose more than 40 percent after partner Pfizer Inc (PFE.N) said it is in talks with U.S. health regulators to find a way forward on the companies' painkiller, Remoxy.
The U.S. Food and Drug Administration twice declined to approve Remoxy, an abuse-resistant painkiller, on concerns about the drug's chemistry and production process.
Pain Therapeutics and Durect shares crashed in November when Pfizer called Remoxy "a challenging asset," raising fears that the pharmaceutical giant would not pursue development of the drug.
Pfizer owns marketing rights to the drug, developed by Pain Therapeutics using Durect's technology.
On a post-earnings call on Tuesday, Pfizer said it had a "productive meeting" with the regulator in March.
"We've had discussions with the FDA and have a clear understanding of what we need to do to meet FDA requirements," Pfizer Chief Executive Ian Read told Reuters.
Read declined to specify what the agency wants, or how Pfizer will satisfy the agency's requirements -- including whether new studies or new analyses of completed studies have been requested.
He had told Reuters in November that the drug would be evaluated in three more trials to be completed by March 2013.
Durect shares rose 48 percent to $1.85 in early trading, but pared some gains to be up at $1.57 around midday. Pain Therapeutics shares jumped about 40 percent to touch a high of $4.60, before easing back a little to $4.00.
(Reporting by Ransdell Pierson in New York and Pallavi Ail in Bangalore; Editing by Sriraj Kalluvila)