Penny-stock Aastrom Bioscience ( ASTM) shot up in Tuesday's premarket session as traders decided a partnership involving bone-grafts was potentially big news.

The Ann Arbor, Mich., biotech will collaborate with the Musculoskeletal Transplant Foundation to develop treatments for regeneration of tissue like bone and cartilage. It described the foundation as the "leading provider of allograft, or donor-derived tissue, matrices."

Aastrom's shares rose 49 cents, or 41%, to $1.69 on the Instinet premarket session.