Progenics shares soar on bowel drug approval

BANGALORE (Reuters) - Shares of Progenics Pharmaceuticals (PGNX.O: Quote, Profile, Research) rose as much as 48 percent, a day after the company's bowel drug, Relistor, won U.S. approval and received a positive opinion from European health regulators.

Progenics is partnered with Wyeth (WYE.N: Quote, Profile, Research) for the development of the drug. Wyeth shares were up 24 cents at $44.80 in afternoon trade on the New York Stock Exchange.

Relistor is already approved in Canada, and is expected to be approved for opioid-induced constipation (OIC) in Europe by mid-year.

Citigroup analyst Yaron Werber upgraded the stock to "hold" from "sell," calling the approval from the U.S. Food and Drug Administration a "pleasant surprise".

In March, Progenics shares lost almost two-thirds of their value after the drug failed a late-stage trial for another bowel condition -- post-operative ileus (POI).

At that time, Werber had doubted that the drug would be approved in April and had cut the stock's rating.

In a note to clients, RBC Capital Markets analyst Michael Yee said the U.S. approval is a "significant achievement and clears a major regulatory overhang for the company."

Yee raised the stock's price target to $19 from $10 keeping an "outperform" rating, and said mid-stage trial data for oral Relistor would be the next biggest catalyst for the stock.

Progenics is also studying the oral formulation of the drug in a mid-stage trial for OIC in chronic pain patients.