Shares of Millennium Pharmaceuticals rose Thursday as the company substantially narrowed its third-quarter loss, and said it expects its full-year loss to be half that previously forecast.

The early morning release also revealed plans by the Cambridge, Mass., company to cut back spending on its research and development, including cutting 14 percent of it staff, leaving about 1,000 employees. The cuts are being made so the company can increase focus on its only commercial drug, Velcade. Millennium also said it is expanding an agreement with a subsidiary of Johnson & Johnson to co-promote the drug within the United States.

Shares of Millennium rose 61 cents, or 585 percent, to $11.07 in afternoon trading on the Nasdaq. The stock has traded between $7.83 and $11.46 the last 52 weeks.

The company's earnings report was a mixed bag. Its loss for the three months ended Sept. 30 narrowed to $13.7 million, or 4 cents per share, compared with a loss of $73.8 million, or 24 cents per share, in the corresponding quarter last year.

On an adjusted basis, the company said its loss was 2 cents per share.

Analysts polled by Thomson Financial expected a loss of a penny per share.

Revenue fell 48 percent, to $104.1 million from $201.7 million. Analysts expected revenue of $111 million. Sales of Velcade, a bone cancer treatment, increased to $53.2 million.

The quarterly improvement was mostly attributable to lower restructuring charges, Millennium said. It updated full-year guidance, and now expects to lose between $50 million and $60 million, compared with previous projections for a $95 million to $115 million loss. Velcade sales estimates were lowered to about $220 million from between $225 million and $250 million, while royalties projections were boosted to between $130 million and $135 million, from $115 million and $125 million.

The earnings guidance boost is based on an expected $25 million milestone payment from Johnson & Johnson and a $19.5 million payment from AnorMed Inc. for the termination of a buyout deal.

JP Morgan analyst Geoffrey Meacham reaffirmed an "Underweight" rating for Millennium, saying weak Velcade sales overshadowed earnings upside. He also expects Velcade sales to further erode because of competition from Celgene's Revlimid.

"More robust promotion of Velcade is unlikely to dramatically alter this dynamic," he wrote in a note to investors.