Oncolytics Biotech Inc said its cancer drug Reolysin reduced the size of tumours in 92 per cent of lung cancer patients in a mid-stage trial.
The company's shares rose as much as 22 per cent to $3.22 in trading before the bell.
The drug was tested on patients suffering from advanced squamous cell carcinoma of the lung. It was used intravenously in combination with chemotherapy drugs carboplatin and paclitaxel.
"Squamous cell carcinoma of the lung is notoriously difficult to treat, and these results support further investigation of Reolysin in randomized clinical trials for this indication," Chief Executive Brad Thompson said in a statement on Monday.
Squamous cell carcinomas account for 25 per cent to 30 per cent of all lung cancers, according to the American Cancer Society.
Final progression-free survival and safety data for the study will be reported later in the year, the Calgary-based company said.