Pfizer Inc said it has decided to develop the abuse-resistant painkiller made by its partner Pain Therapeutics Inc, six months after the pharmaceutical giant's comments raised fears it would drop the drug.
Pain Therapeutics shares jumped as much as 30 percent in early trading on the Nasdaq.
The drug, Remoxy, has been rejected twice by the U.S. Food and Drug Administration due to concerns about its manufacturing process and chemical composition.
Pfizer said on May 10 that it had not decided whether to continue developing the drug, sending Pain Therapeutics shares crashing nearly 50 percent.
Pfizer will conduct new clinical trials to address the questions raised by the U.S. regulator, the company said on Tuesday.
The FDA had asked for two studies - one to show that a modified version of Remoxy was the bioequivalent of its original formulation, and another to investigate the potential for abuse of the modified version.
Remoxy is a gel-based capsule of the common painkiller oxycodone, which is widely abused. Remoxy's gel formulation makes it difficult to abuse by crushing or mixing with water or other solubles.
Drug abuse has become a growing concern in the United States and the FDA has already proposed stronger safety language on labels of opioids, a class of painkillers, in response to an epidemic of overdoses and deaths from these widely used medicines.
Opioids include formulations of morphine, oxycodone and fentanyl.
Remoxy was developed using the abuse-resistant technology of Durect Corp, whose shares jumped 11 percent to $1.56 on the Nasdaq.
Pfizer acquired the rights to Remoxy as a part of its acquisition of King Pharmaceuticals Inc in February 2011.
Shares of Pain Therapeutics were up 17 percent at $3.81 on the Nasdaq. Pfizer shares rose about 1 percent to $30.77 on the New York Stock Exchange.
(Reporting by Esha Dey in Bangalore; Editing by Kirti Pandey)