* Contract for development in oncology extended by a year
* Zalicus to start mid-stage study on arthritis drug in Q2 * Zalicus shares rise 11 pct
Jan 10 (Reuters) - Zalicus Inc ZLCS.O said its oncology research collaborator, Novartis NOVN.VX, was extending their contract by a year to May 2012, sending its shares up 11 percent.
The companies had signed an initial two-year agreement in May 2009 to develop novel anti-cancer compounds using Zalicus’ proprietary screening technology.
As per the original agreement, Zalicus got a $4 million upfront payment and was eligible to receive up to $58 million in milestones.
Zalicus also said it plans to advance its arthritis drug Synavive into mid-stage trials in the second quarter.
The Cambridge, Massachusetts-based company’s shares, which have gained half their value in the past six months, rose 11 percent to $2.39, their highest in nearly 18 months, on Monday on Nasdaq. (Reporting by Shravya Jain and Krishnakali Sengupta in Bangalore; Editing by Anne Pallivathuckal)