Avanir Jumps on Study Results (Update)

(Updated to include comments from Avanir's CEO and to update the stock price.)

ALISO VIEJO, Calif. (TheStreet) -- Avanir Pharmaceuticals(AVNR Quote) said that a late-stage clinical trial showed that its drug, used to treat a neurological disorder that causes unprovoked emotional outbursts, successfully addressed FDA safety concerns.

That was enough to send shares of the company as much as 80% higher in Tuesday's early going, though the stock later backed off those advances, closing at $2.83, up 64 cents, or 30%. Volume reached more than 29 million shares. Daily average turnover is just 850,000.

In the phase III trial, Avenir said that its drug, called Zenvia, led to a 47.2% reduction in the rate of the outbursts compared to the placebo.

In the main, Avanir conducted the test to address concerns raised by the FDA back in 2006 that one of Zenvia's ingredients, quinidine, might pose cardiovascular risks in some patients if they doubled the recommended dosage in order to make up, say, for a missed allotment.

Quinidine, a common treatment for heart arrhythmia, is part of the Zenvia formula because it helps metabolize the crucial ingredient, dextromethorphan.

Avanir therefore used the trial -- its third phase III study of Zenvia so far -- to test whether a smaller amount of quinidine would still allow the drug to be effective. The company cut the quinidine amount per dosage to 10 milligrams from 30.

Reported "adverse events," or side effects, were "mild to moderate in nature," Avanir said, and occurred at about the same rate in the Zenvia patients as the control group. Dizziness, nausea and diarrhea, however, occurred at a more frequent rate in the Zenvia group.