A small pharmaceutical company has surged 137% in 2 days after positive results in trials for lung disease treatment

• aTyr Pharma shares have soared as much as 137% this week following notice of a positive clinical trial.
• An early-stage clinical trial for a treatment addressing pulmonary sarcoidosis showed it was safe and tolerable.
• The company will continue developing its lead product candidate ATYR1923 based on the early trial results.

Shares of aTyr Pharma extended a rally into a second session Tuesday, propelled higher after the biopharma company released promising results about a lung-disease treatment from an early-stage clinical trial.

The shares have jumped as much as 137% from Friday's close, hitting an intraday high of $12.97 on Tuesday and touching a market capitalization of $219 million. The stock closed Monday's session up by 67% at $9.15.

During Tuesday's trade, the shares bulked as much as 42% before trimming the gain to 22%.

The rally got underway after aTyr said Monday its lead product candidate, ATYR1923, met its primary endpoint in demonstrating safety and tolerability in a phase 1b/2a trial of 37 patients with pulmonary sarcoidosis. Pulmonary sarcoidosis is an inflammatory disease that is affecting 200,000 Americans.

The trial also showed ATYR1923 produced improvements in, among other things, steroid reduction and lung function compared with placebo.

aTyr said its plans to continue developing ATYR1923. It's aiming to meet with the US Food and Drug Administration to present its data and expects to initiate a registrational trial next year. Current treatment options for pulmonary sarcoidosis include corticosteroids and other immunosuppressive therapies, which aTyr says have limited efficacy and are associated with serious side effects, the company said.