Psivida Corp said U.S. health regulators cleared its experimental eye insert to skip initial studies and proceed directly to late-stage trials, sending its shares up as much as 53 percent on Thursday.
The product is a sustained-release device which is injected into the back of the eye and aims to treat posterior uveitis, an inflammatory disease of one of the layers of the eye.
The condition is the third largest cause of blindness in the United States, the company said.
The U.S. Food and Drug Administration agreed that the main goal of the trials would be to study the recurrence of uveitis within 12 months and that Psivida may reference much of the data from the trials already conducted on its other insert Iluvien.
"As the same micro-insert was used in the Iluvien trials, we expect to observe a comparable side-effect profile in uveitis patients as was seen in diabetic macular edema patients," Chief Executive Paul Ashton said.
Iluvien, which has twice been rejected by the FDA, is approved to treat retinal swelling in diabetic patients in the UK, Austria, France and Portugal.
Psivida added that since the experimental insert delivers the same drug as its other insert Retisert, which is FDA-approved to treat posterior uveitis, the company expects to see favorable efficacy in the late-stage studies.
Shares of Watertown, Massachusetts-based Psivida were up 54 percent at $3.33 on the Nasdaq on Thursday morning.
(Reporting By Pallavi Ail in Bangalore; Editing by Sreejiraj Eluvangal)