SAN MATEO, Calif. (AP) ¿ NeurogesX Inc. said Wednesday it will study Qutenza as a treatment for nerve pain caused by shingles or diabetes, following an agreement with the Food and Drug Administration.

The drug will be tested as a potential treatment for post-herpetic neuralgia following pretreatment with an FDA-approved topical anesthetic.

The FDA is currently reviewing Qutenza as a potential treatment for the nerve pain condition, with a decision expected by Aug. 16.

The new study will involve 20 patients receiving the pain patch after a 60-minute pretreatment with an FDA-approved topical anesthetic. The goal of the study is the mean duration of the patch application.

Qutenza is already approved in Europe.

The drug had a slight setback in 2008, when it failed to reduce nerve pain in a late-stage study of HIV patients. At the time, though, it produced positive results in post-herpetic neuralgia.

Lazard Capital Markets analyst William Tanner reaffirmed a "Buy" rating and $8 target price on the stock, citing the study agreement with the FDA.

"Following European Union approval of Qutenza, we believe commercial prospects for the company are improving," he said, in a note to investors.

The company could announce a European partnership soon, he said.

Shares rose 14 cents, or 2.4 percent, to $6.09 in midday trading. The stock reached a new 52-week high of $6.25 earlier in the trading session.

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