Encysive Trial Moves Ahead

Encysive (ENCY Quote) just got a nice shot in the arm.

The Houston-based biotechnology company has secured regulatory approval to resume an important drug trial that was halted over safety concerns early this year. The company can now move forward with early trials of TBC3711, a new treatment for resistant hypertension, while it waits for an even more crucial decision from the Food and Drug Administration.

The company continues to seek the FDA's blessing for Thelin, a new medication for pulmonary arterial hypertension, so that it can start selling the drug in the U.S. and Europe alike.

Investors, pining for good news from the FDA, celebrated the development. They sent shares of Encysive up 12% to $6.78 on Friday.

Still, analysts were more restrained.

"We believe it is an incremental positive development for Encysive because continued clinical hold would have further delayed the development of Encysive's most significant pipeline product outside of Thelin," Rodman & Renshaw analyst Navdeep Jaikaria wrote late Thursday. "However, as TBC3711 is still in very early stage development, it is currently not a key driver of ENCY shares."

Thelin has been shaping the company's fate instead. Originally, the drug looked destined for U.S. approval early this year. But the drug has hit unexpected roadblocks -- on two separate occasions -- as regulators seek more information about its performance.

This time around, Encysive has waited longer than usual for an update from the agency. Jaikaria sounds worried as a result.

"The FDA appears to have been significantly delinquent in getting back to Encysive whether the submitted response is complete," he noted. "While the 30-day timeline is not set in stone and there are also two federal holidays (Veteran's Day and Thanksgiving) since the filing, we still find it unsettling that the FDA still has not rendered a response by now."