Rockwell Medical Inc said a late-stage trial of its experimental iron deficiency drug met the main goal of improving hemoglobin levels in patients with chronic kidney disease.
The company's shares rose 52 percent to $5.74 in heavy trading before the bell.
The study was the first of two planned late-stage trials, and tested Soluble Ferric Pyrophosphate (SFP) in adult patients with chronic kidney disease.
SFP is the company's lead experimental drug. It aims to replace iron that is lost during a dialysis treatment and is delivered via the fluids used in dialysis.
"This is one of the company's biggest milestones. It is the first late-stage result the company has ever reported," Andrew McDonald, analyst at LifeSci Advisors told Reuters.
Rockwell Medical said it expects results from the second late-stage trial to confirm those of the first study.
"Pending positive results from the second study, chances of FDA approval are very high," McDonald said, adding that similar results are likely as both studies are identical.
He said if the drug was approved, it could generate $300 million to $500 million in annual sales for Rockwell Medical.
The company said the frequency and severity of adverse events experienced by patients on SFP and those on a placebo were comparable.
Rockwell reported positive results from a clinical study of SFP in February, saying that regular administration of the drug reduced by 37 percent the need for erythropoietin stimulating agents that are used to stimulate red blood cell production.
The drug is intended to be a replacement for IV iron, which is a standard of care for patients suffering from chronic kidney disease, but causes allergic reactions.
In dialysis, waste and extra fluid is removed from the blood by pumping it from the patient into a machine, which filters it and pumps it back into the body.
Rockwell is also testing SFP in early-stage trials for three other mediums of delivery - oral, peritoneal dialysis and total parenteral nutrition.
(Reporting by Esha Dey and Vrinda Manocha in Bangalore; Editing by Sreejiraj Eluvangal)