Shares of

Tercica

(TRCA)

found buyers Wednesday after the biopharmaceutical company received regulatory approval for its growth-failure drug.

After Tuesday's market close, the company said the Food and Drug Administration approved Increlex, a treatment for children whose growth has been impeded by a severe deficiency in a chemical known as insulin-like growth factor-1. The drug is also for children who have developed neutralizing antibodies to growth hormone, which keeps bones, cartilage and organs from growing normally.

The stock was up $1.62, or 17%, to $10.95.

In the U.S., about 6,000 children are affected by the conditions. The FDA has designated Increlex as an orphan drug for severe primary insulin-like growth factor deficiency. Orphan-drug status is granted for drugs made for rare diseases, and allows for exclusive marketing rights and tax credits.

"Today, Increlex becomes Tercica's first commercial drug and represents the first major innovation in the treatment of short stature since recombinant growth hormone was approved 20 years ago -- an advance that we believe will change the way physicians diagnose and treat patients with growth failure due to severe primary IGFD," said Tercica President and CEO Dr. John A. Scarlett.

Tercica acquired the rights to develop, commercialize and manufacture Increlex from biotech giant

Genentech

(DNA)

.