UPDATE 1-QLT to divest acne treatment following FDA ruling

(Adds details, comments, updates trading)

By Scott Anderson

TORONTO, March 17 (Reuters) - QLT Inc (QLT.TO: Quote, Profile, Research) said on Monday that it would proceed with plans to divest its topical acne treatment Aczone after the U.S. Food and Drug Administration removed key blood monitoring requirements for the treatment.

Selling the acne treatment, estimated to be a $100-million product, is the first in a multi-step process of returning the company to its core business of treating eye diseases.

QLT shares jumped C$1.09, or 47 percent, to C$3.41 following the news.

"This is a value-enhancing day for QLT," Bob Butchofsky, president and chief executive, told Reuters.

"The market's reaction is validation of that in a very tough market and we look forward to getting the process underway to divest this asset and move the company forward in the programs that we are keeping."

The company, which was founded in 1981 and known for its Visudyne anti-blindness treatment, had drifted away from that business over the years and branched out into areas such as acne and prostate cancer.

But a slumping share price and investor dissatisfaction have forced the company to refocus on its core business.