Shares of biopharmaceutical company Trubion Pharmaceuticals Inc. jumped Monday after several analysts started coverage of the stock with a positive outlook, based on prospects for Trubion's rheumatoid arthritis candidate TRU-015.

The stock gained $1.22, or 7.6 percent, to reach $17.21 on the Nasdaq in morning trading, having earlier set a new 52-week high of $17.38 shortly after the market opened. Previously, the stock has traded between $12.70 and $16.24 over the last year.

The boost came after Morgan Stanley, Bank of America and Lazard Capital Markets initiated coverage with "Buy" and "Overweight" ratings, saying there is a low clinical risk associated with the arthritis treatment candidate. Analysts also believe TRU-015 would enter the market as a solid competitor to Genentech Inc.'s Rituxan.

The market itself for rheumatoid arthritis is expanding, analysts said, and with Wyeth as a partner in the drug's development, Trubion will have a reliable path into that field.

Seattle-based Trubion, which went public Oct. 18, is currently conducting mid-stage clinical trials of the treatment. Another drug candidate, TRU-016, is undergoing development for use as a cancer treatment.

"We have argued that until the next innovation in biotech, Trubion and other fast-follower players may offer the best risk-adjusted returns," said Morgan Stanley analyst Steven Harr, who rates the stock at "Overweight" with a $24 price target.

"Fast-follower" refers to a company that moves a product to market soon after the entrance of an initial, sometimes blockbuster, treatment. Harr expects to see data from the current TRU-015 trial during the second half of 2007, and late-stage clinical trials by early 2008. He forecasts the product will launch in late 2010.

Lazard analyst Joel Sendek initiated coverage with a "Buy" rating and a $22 price target, citing a similar outlook for TRU-015. The drug has a lower clinical risk than most biotech drugs, he said, because it is already directed against a validated target, uses a similar mechanism to Genentech's Rituxan and has so far shown positive results in clinical trials.

The rheumatoid arthritis market for biologic therapies is forecast to grow to $6.4 billion by 2009, Sendek said.

However, while Sendek said a survey of physicians showed 91 percent would switch to the drug from Rituxan, it faces not only an increasingly competitive market, but patent issues as well. Genentech and Trubion are currently disputing patents involved in the drug's use. That litigation, which has the potential to thwart TRU-015's release in both the United States and Europe, is on of the biggest risks facing the company.

Bank of America analyst David Witzke also started Trubion at "Buy" with a $23 price target, citing a similar positive outlook as well as lingering patent litigation concerns. He cited the collaboration with Wyeth on the drug as a strong point for the company, that validates the drug's market potential.