Heron Therapeutics Inc's twice-rejected long-acting injection to prevent chemotherapy-induced nausea and vomiting was finally approved by the U.S. Food and Drug Administration, marking the biotech's first regulatory approval.

The Redwood City, California-based company's shares rose as much as 21 percent to $24 on Wednesday.

Nausea and vomiting, one of the most acute side effects of chemotherapy, occurs in up to 80 percent of patients and is the leading cause of patients discontinuing treatment, according to the National Institute of Health.

Other chemotherapy-induced nausea and vomiting (CINV) treatments, including Eisai's Aloxi injection, are generally effective for 48 hours or less, but Heron's Sustol can protect patients for five days, the company said on Wednesday.

"Sustol appears to have gotten a favorable label ... and the approval removes a major overhang on the stock," Leerink's Jason Gerberry wrote in a note.

The FDA said in April it found no deficiencies in Sustol's marketing application, after postponing its decision on the drug first in January and then in late February.

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Sustol was approved in combination with other agents to prevent nausea and vomiting associated with some forms of chemotherapy, excluding platinum-based regimens, Heron said.

The absence of platinum-based therapies from the label is a bit disappointing, given that Sustol showed a strong response in patients in this class of chemotherapy, Cowen & Co's Boris Peaker wrote in a note.

This exclusion reduces Sustol's addressable population by about 7 percent, company executives said on a conference call.

Heron did not disclose Sustol's price, but said it would reference recently approved CINV treatments. Cowen's Peaker estimates a price of $200 per patient.

Tesaro Inc's oral CINV treatment, rolapitant, was approved last September and works by blocking the activation of neurokinin (NK)-1 receptor.

Sustol, like Aloxi, targets the serotonin-3 (5-HT3) receptor, which plays a role in nausea and vomiting.

Sustol, which is an injectable version of the generic granisetron, will be launched in the fourth quarter.

Heron said it had a support plan in place, consisting of co-pay assistance, extended financing until practices receive reimbursement, and would potentially reimburse patients if insurance claims are rejected.

The treatment is expected to generate peak sales of $306.3 million by 2021, according to Thomson Reuters Cortellis.

Heron's stock, which had lost about a quarter of its value this year up to Tuesday's close, was up about 9 percent in morning trading on Wednesday.