Oncolytics Biotech saw its stock leap nearly 30% on Friday after reporting promising mid-stage data from its flagship experimental cancer drug.

A Phase II trial investigating the use of Reolysin in patients with small cell lung cancer has raised hopes of a potential new treatment for the condition, of which there are around 230,000 new cases in the US alone every year.

Data showed that 95% of evaluable patients (19 out of 20) given the drug in combination with carboplatin and paclitaxel exhibited overall tumour shrinkage by a mean of 33.3%.

Commenting on the findings, the firm's president and chief executive Brad Thompson said it is "exciting to have 95% of patients in this study exhibit tumour shrinkage and these results further suggest that Reolysin may have potential use in neoadjuvant (pre-surgical) settings".

Based on these results, the company will continue to assess the drug for lung cancers and cancers that spread to the lung, he added.

Reolysin is a proprietary variant of the reovirus, which is widely found in the environment and replicates well within certain cancer lines. The drug is being tested in various cancers, including in an ongoing Phase III clinical trial for head and next cancer.