Eli Lilly's stock swelled more than 5% yesterday as investors revelled in news that a late-stage trial of its experimental lung cancer drug hit its targets.

Data from a Phase III trial show that a combination of necitumumab, gemcitabine and cisplatin boosted overall survival (OS) in patients with stage IV metastatic squamous non-small cell lung cancer (NSCLC) compared to chemotherapy alone, the drugmaker said.

On the safety side, the most common adverse events that occurred more often in patients taking necitumumab arm were rash and hypomagnesemia, while those more serious, but less frequently observed, included thromboembolism, Lilly noted.

Lilly said it plans to present data from the study at a scientific meeting in 2014, and currently anticipates submitting to regulatory authorities before the end of next year.

The company is hoping that its drug will become the first biologic therapy for patients with this difficult to treat lung cancer, and news of its success will be particularly pleasing for investors given that expectations for necitumumab have been on the low side. 

Analysts previously forecast that, if approved, sales in 2022 could be around $384 million a year, but J.P.Morgan analyst Chris Schott told Reuters that, given the trial's success, he now believes the drug could generate annual revenues of more than $1 billion, as long as the trial data still undisclosed throw no surprises. 

Around 85% of lung cancer patients have NSCLC and of these around 30% have squamous cell carcinoma.