Shares of Advanced Life Sciences Holdings, Inc. (OTCBB: ADLS) were up almost 19 percent in morning trading on Thursday after a favorable report was issued by Dawson James Securities.

The report stated that although the company has “significant near-term financial challenges,” Advanced Life Science Holdings shares are trading “at a significant discount to comparable anti-infective therapeutics- and Biodefense-focused companies.”

The company’s lead product, Restanza, which was created to address the need for treatment options for community-acquired bacterial pneumonia (CABP), has exhibited high potency against key susceptible and respiratory pathogens resistant to the macrolide-, penicillin- and fluoroquinolone-class antibiotics. Restanza also exhibited strong activity against community–acquired methicillin-resistant Staphylococcus aureus (CA-MRSA), which is a bacterial infection that is resistant to most antibiotics.

In March 2010, Advanced Life Sciences Holdings received guidance from the U.S. Food and Drug Administration on an approval pathway for Restanza in CABP. Several months later, the company reached agreement with the FDA on the design of a Phase III trial with Restanza under the Special Protocol Assessment (SPA) process. The trial is the first prospectively designed superiority study to be conducted in CABP.

“With FDA guidance, the planned Restanza Phase III trial has significant potential for success,” the Dawson James report stated. “Should it demonstrate superiority versus traditional agents such as azithromycin, we believe Restanza could realize blockbuster potential.”

Shares of ADLS are down about 38 percent over the past three months.