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Theravance rises on panel review of Vibativ

NEW YORK (AP) -- Shares of Theravance Inc. rose Friday after Food and Drug Administration advisers said its antibiotic Vibativ should be approved to treat hospital-acquired pneumonia.

THE SPARK: The FDA advisory panel offered mixed opinions on Vibativ. A majority of panelists said clinical trial data did not provide substantial evidence the drug works and is safe. However they said the data showed evidence of safety and effectiveness when other treatments are not available. The FDA is not required to follow the panel's advice, though it often does.

THE BIG PICTURE: Vibativ is approved as a treatment for complex skin infections. It is Theravance's only approved drug.

Theravance is trying to get approval to market the drug as a treatment for pneumonia that is contracted when a patient is already hospitalized. It's a very dangerous infection because the patients are often already sick and the germs can be more virulent than those encountered outside of hospitals. Hospital-acquired pneumonia is particularly common among patients who are using ventilators to assist their breathing.

SHARE ACTION: Theravance shares rose $1.05, or 5 percent, to $22.45 in afternoon trading. The stock has lost about 30 percent of its value since reaching $31.87 on July 18.