Two compounds made by Australian biotech Biotron have been found effective against the zika virus.
Its shares jumped 15.6% to $0.074 on the news.
The company says several compounds were sent to an independent US facility for screening against the virus.
One compound showed activity in the first round of screening and this result has been confirmed in repeat tests. In a subsequent round of screening, a second compound was shown to inhibit replication of Zika virus.
Biotron’s managing director Michelle Miller says the early results are encouraging.
“They demonstrate the robustness of Biotron’s library of compounds and approach to developing drugs that target serious viral diseases,” Dr Miller says.
“Identification of these active compounds in our library is a starting point for designing potent drugs against Zika.”
The zika virus has hit Rio de Janeiro where the Olympics will be held in August.
The virus is spread primarily through mosquitos. The most common symptoms of Zika are fever, rash, joint pain and conjunctivitis.
However, Zika virus infection during pregnancy has been associated with a serious birth defect called microencephaly as well as other severe fetal brain defects.