China-based Sinovac Biotech Ltd said a late-stage trial of its experimental vaccine for hand, foot and mouth disease (HFMD) met the main study goal of preventing the infection in infants between the ages of 6 months and 35 months.
The Sinovac stock jumped as much as 60 percent in early trading, making it the top percentage gainer on the Nasdaq. About 5 million shares changed hands by 1041 ET, nearly 85 times their 10-day average volumes.
The trial results showed an immune response to the infection in 95.4 percent of vaccinated subjects. The trial tested two doses of the vaccine in 10,000 healthy infants in China.
Aegis Capital analyst Raghuram Selvaraju said that although the vaccine is likely to get approval from Chinese health regulators, Sinovac could face competition from two government-sponsored companies also testing HFMD vaccines in late-stage trials.
The results of the studies conducted by competitors China National Biotec Group and Kunming Institute of Biological Products are expected later this year, he said.
"If those programs show efficacy rates of greater than 90 percent, then Sinovac has got a problem," Selvaraju told Reuters. "If their efficacy rates are below 70 percent, Sinovac will be the dominant leader in the market."
Sinovac said the vaccine showed only a 2.2 percent incidence of adverse events, which were considered not to be related to the vaccine.
The difference in the rates of serious adverse events in infants who received the vaccine and those who received a placebo was not statistically significant, the company said.
Sinovac will finalize the clinical report as a part of its documents to be filed with the State Food and Drug Administration (SFDA) of the People's Republic of China.
Selvaraju said he expected the vaccine to be approved by the end of the first quarter of 2014, and launched by the middle of 2014.
"There are usually 2 million cases reported in China every year and a vaccination program would cover at least 10 million people," he said.
Sinovac's facility to manufacture the vaccine has been completed and is ready for inspection by the SFDA, the company said in a statement.
Hand, foot and mouth disease, which is caused by enterovirus 71, usually affects infants and children and is spread through direct contact with the mucus, saliva, or faeces of an infected person.
Shares of Sinovac, which has a market capitalization of about $175 million, were up 38 percent at $4.41 in morning trading. They touched a two-year high of $5.09 earlier.
(Reporting By Vrinda Manocha in Bangalore; Editing by Maju Samuel)