CARLSBAD, Calif. ( TheStreet) -- Isis Pharmaceuticals ( ISIS) shares moved higher Monday after the company announced results from a small mid-stage study showing for the first time that an experimental gene-silencing drug was capable of lowering triglyceride levels and increasing insulin sensitivity in diabetic patients who entered the study with moderately high levels of the fatty particles in their blood.

Based on these data and more expected later this summer, Isis is designing a phase III study of the drug, known as ISIS-APOCIIIRx, to treat patients with severely high levels of triglycerides.

Shares of Isis rose 26% to $27.75 in late Monday trading.

Isis said Monday that meetings with regulatory officials later will take place later this year to get the go-ahead for the pivotal study, which could start enrolling patients in early 2014.

Approximately 50,000 patients have severely high triglyceride levels, which the company defines as greater than 880 mg/dl, Isis estimates. These patients are at high risk for heart attacks, strokes and pancreatitis, a potentially fatal swelling of the pancreas.

Isis believes its drug may help significantly lower triglyceride levels in these patients, many of whom are already being treated with currently approved medicines such as prescription-grade fish oil (including Amarin's ( AMRN - Get Report) Vascepa), niacin or fibrates.

In the study presented Monday, treatment with weekly injections of ISIS-APOCIIIRx for 13 weeks led to an 88 percent reduction in a protein known as apolipoprotein C-III (apoC-III), which helps regulate the level of triglycerides in the bloodstream. Lowering apoC-III, in turn, resulted in a 72 percent reduction in triglyceride levels, a 40 percent increase in HDL (good cholesterol) and improvements in insulin sensitivity.

The study enrolled 11 patients with Type 2 diabetes who had baseline levels of triglycerides between 200 mg per dl and 500 mg per dl.

On the safety side, the injections of ISIS-APOCIIIRx caused no significant serious adverse events, including no "clinically meaningful" increases in liver enzymes, which can be a sign of liver toxicity.

The Isis drug is designed to work by turning off the gene responsible for producing the apoCIII protein. Last year, Isis and partner Sanofi ( SNY - Get Report) were granted U.S. approval to market Kynamro to treat patients with severely high levels of cholesterol. Kynamro works in a similar manner as ISIS-APOCIIIRx but can also cause liver damage and painful injection-site reactions. European regulators rejected Kynamro due to concerns about the drug's safety.

On Monday, Isis said its new triglyceride-lowering drug appears to be safer and better tolerated than Kynamro, although the former has been studied in far fewer patients and for a shorter period of time.

ISIS-APOCIIIRx is a potential competitor to Amarin's Vascepa, but the need for weekly injections plus the risk that long-term use may lead to safety issues are likely to limit it to use in patients with much more severe disease.

Later this summer, Isis is expected to announce further results from the phase II study in patients with more severe baseline levels of triglycerides.

Monday's data were presented at the annual meeting of the American Diabetes Association, taking place in Chicago.

-- Reported by Adam Feuerstein in Boston.

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