Xenova, the UK biotech company, said its experimental vaccine for cocaine addiction had shown signs of reducing the euphoric effect associated with taking the drug.
The company's shares experienced a heady rush before coming down to earth on the better than expected news. Xenova's shares climbed as much as 17 per cent before eventually closing down 0.25p at 14.5p.
It said phase two trials of the drug, codenamed TA-CD, showed that of 16 patients who took it over the course of a year, 14 reported it had the effect of reducing their enjoyment from taking cocaine.
Patients also stuck with it for longer than expected, with 12 of the group remaining on it for a year, compared with a more usual drop-out rate of about 75 per cent of addicts in similar trials.
If TA-CD succeeds, it will be the first drug on the market available to combat an addiction to cocaine and it will also transform the fortunes of Xenova. The company said earlier this year that it had £12m in the bank - enough to fund its development costs for only another 12 to 18 months.
David Oxlade, chief executive of Xenova, said: "The problem of cocaine addiction is huge. There are no drugs on the market that are beneficial in this situation and, to our knowledge, no one is developing a similar treatment."
The Slough-based company said it was confident that more rigorous phase three trials of the drug would be partly funded by America's National Institute on Drug Abuse. The company has already received several million pounds in development money from the body, Mr Oxlade said.
Analysts welcomed the trial results, but added the vaccine - which works by building antibodies to cocaine that prevent the drug from reaching the brain - was still a long way from the market. Even if the drug continues to perform well, it is unlikely to be on the market before 2009.
Xenova shares have plunged from a high of 475p in 2000 and it has been struggling to recover from the failure of its lead cancer drug Tariquidar.Reuse content