The combination of perindopril arginine and amlodipine besylate showed statistically significant reduction in sitting systolic and diastolic blood pressure after six weeks of treatment, compared with either drugs alone, Xoma said.

The company is likely to file a new drug application for the combination in 2013, said RBC Capital Markets analyst Adnan Butt.

Xoma said it does not plan to market the product directly but intends to sublicense it to a third party.

"The next thing we expect is for the company to get a partnership for this drug. The terms could include an upfront payment and possible royalties on product sales," Butt said.

He added that the result would be a modest positive but the key driver is the company's experimental anti-inflammatory drug gevokizumab. The drug is being tested in a late-stage study for treatment of non-infectious uveitis, an inflammation of the middle layer of the eye.

Xoma's partner, French pharmaceutical company Les Laboratoires Servier, already markets the combination under the trade name Coveram in 91 countries outside the United States.

Perindopril and amlodipine each target different cardiovascular functions and are, therefore, used in combination to treat high blood pressure, Xoma said. The company bought the rights to Servier's perindopril franchise in January.

The combination was well tolerated in the trial, and there were no serious adverse events, Xoma said.

Shares of the company rose to $2.84 in extended trade. They closed nearly 3 percent higher at $2.68 on Tuesday on the Nasdaq.

(Reporting By Vrinda Manocha in Bangalore; Editing by Sriraj Kalluvila)

• A Permanent Economic Emergency