Eledon Pharmaceuticals shares rose after the company said its kidney treatment was granted fast-track designation by the Food and Drug Administration.

The stock rose 13% to $3.04 on Tuesday. Shares are up 87% this year.

Patients treated with tegoprubart in a Phase 2 trial had statistically significantly higher kidney function through 24 months compared with tacrolimus, Eledon said.

The fast-track designation is to develop tegoprubart as a prevention for rejections in kidney transplants, Eledon said. No rejections occurred in the tegoprubart arm of the trial after six months post-transplant, it added.

The FDA's designation is meant to facilitate the development and expedite the review of drugs that treat serious conditions and address unmet medical needs.

The biotechnology company said it is on track to initiate its Phase 3 trial of tegoprubart in kidney transplantation in the fourth quarter of this year. The trial is expected to enroll about 600 patients, it said.