BioCryst Pharmaceuticals Inc. said the U.S. government exercised options to test the company's antiviral drug in humans and non-primates as a treatment for hemorrhagic fever viruses such as Ebola.
The biotechnology company's shares rose as much as 4.4 percent in morning trade.
BioCryst said it would receive $4.1 million from the National Institute of Allergy and Infectious Diseases to advance development of an intramuscular formulation of its drug, BCX4430.
"BCX4430 appears to be an ideal product candidate as the agency (NIAID) is intent on moving away from its historical 'one bug, one drug' approach towards more broad-based therapeutic agents," Needham & Co. analyst Serge Belanger said in a note.
Companies with potential Ebola therapies have captured the spotlight as developers face mounting pressure to expedite research on new medical interventions to combat the deadly outbreak.
So far, no Ebola drugs or vaccines have entered mid-stage human trials, let alone been approved. The most advanced have been tested only in monkeys and a handful of humans.
The World Health Organization said on Tuesday that people infected in the West African Ebola outbreak could be offered untested drugs, ushering in an opportunity for companies with potential Ebola drugs of their own.
However, some analysts are skeptical of the speed at which these potential Ebola cures will be adopted.
"Given that BCX4430 is a preclinical candidate and has yet to be tested in humans, it's unlikely it will be used during the current Ebola virus outbreak," Belanger added.
Fragile health systems, significant deficits in resources and infrastructure, and the general inexperience in dealing with Ebola outbreaks could act as hurdles to the adoption of potential Ebola therapies, MLV & Co. analyst Vernon Bernardino said.
The NIAID funding is part of the up to $22 million contract awarded to BioCryst by the agency last September.
NIAID is also supporting the development of GlaxoSmithKline Plc and Johnson & Johnson's experimental Ebola vaccines.
Birmingham, Alabama-based BioCryst's stock was up about 2 percent at $13.67 on the Nasdaq on Wednesday.
© 2016 Thomson/Reuters. All rights reserved.