By Ryan Flinn - 2012-09-13T20:06:09Z

Neuralstem Inc. (CUR), a biotechnology company with no approved products, gained the most ever after saying its stem cell treatment restored paralyzed rats ability to move in an early study.

Neuralstem rose 38 percent to $1.38 at the close of trading in New York, its largest single-day gain since the shares first started trading in December 2006. The Rockville, Maryland-based companys stock has gained 43 percent this year.

Researchers severed the spinal vertebrae of 12 rats, then gave half of them Neuralstems stem cells a week after the injury, according to the study published today in the journal Cell. The rats that received the injections gained significant locomotor recovery, according to a company statement.

The U.S. Food and Drug Administration placed a hold on Neuralstems proposed human trial to treat spinal cord injury in October 2010, according to a company filing.

We think that this paper is the last piece of the puzzle to get the FDA to take our spinal cord injury trial off hold, Richard Garr, chief executive officer, said in an interview.

Neuralstem also is testing its therapy in early human clinical trials for amyotrophic lateral sclerosis, known as Lou Gehrigs disease, and for depression.

To contact the reporter on this story: Ryan Flinn in San Francisco at rflinn@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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Neuralstem Gains on Stem Cell Therapy for Paralyzed Rats