Shares of Avanir Pharmaceuticals, Inc. (NASDAQ: AVNR) were up nearly 80 percent on Tuesday morning, after the drug maker announced positive results from a late-stage clinical trial of the company’s neurological disorder drug, Zenvia.

Zenvia reduced emotional outbursts by 47.2 percent, compared with placebo in the study. That topped the study’s goal, of demonstrating a 36 percent reduction. Both Zenvia 30/10 mg and 20/10 mg provided a statistically significant reduction in the number of emotional outbursts when compared to placebo. Further analysis of the initial endpoint, at week twelve, patients in the Zenvia 30/10 mg group reported a statistically significant mean reduction of 88% from baseline in PBA episode rates. Additionally, patients involved with the study found Zenvia generally safe and well tolerated.

Zenvia is used to treat pseudobulbar affect (PBA), which is categorized by uncontrollable emotional outbursts including laughing or crying. PBA is also known as involuntary emotional expression disorder (IEED), and often occurs alongside brain injuries or neurologic diseases such multiple sclerosis, Lou Gehrig’s disease, or Parkinson’s disease. PBA is estimated to affect approximately 2 million Americans.

“It was all that we had hoped for and more,” said Avanir Chief Executive Officer Keith Katkin in an interview. “It really exceeded our expectations from an efficacy perspective.”

The drug could bring in $500 million in annual U.S. sales by 2015, according to Summer Street Research analyst Carol Werther. “They’ve got a much safer drug that looks efficacious in a condition that has basically nothing,” he said. “It bodes very well for approval.”

Shares of the Southern California-based Avanir traded as high as $3.86 in the first half hour of trading, up $1.67 from Monday’s closing price of $2.19. In early morning trading, the volume of shares changing hands increased three and a half times, from the previous daily average of 850,000 to over 3 million, and the company’s market value rose to about $310 million.

The results are especially encouraging after Avanir was forced to restart the STAR clinical trial in 2007 after the U.S. Food and Drug Administration expressed safety concerns about the heart rhythm impact of quindine, a component of Zanvia after receiving data from the initial 2006 testing of the drug.

The FDA’s main objection was concerning the heart rhythm impact of quinidine, used to increase the amount of the active ingredient, dextromethorphan, in the body. The agency asked Avanir to go back and perform new trials with only one-third as much quinidine — 10 milligrams instead of 30 milligrams.

“We are very encouraged by the top-line results and we believe that the STAR data should be sufficient to address the issues outlined in the FDA approvable letter,” said Katkin. “We hope to have a full presentation of the STAR trial results at a scientific meeting later this year and plan to submit our complete response to the FDA in the first half of 2010.”