What happened

Shares of RedHill Biopharma (NASDAQ:RDHL), a biopharmaceutical company focused on gastrointestinal diseases, jumped 23.6% when the stock market opened today, and an FDA approval announcement for Talicia was the spark that lit the fuse. Enthusiasm for the specialty pharma stock did not get any stronger, though, and most of today's gains have already been erased. RedHill shares were up 11.1% as of 12:22 p.m. EST on Monday.

So what

Talicia is a combination of three well-known drugs in an extended-release capsule for treating digestive systems that are suffering from Helicobacter pylori infections. The company combined the proton pump inhibitor omeprazole with amoxicillin and rifabutin, a well-known pair of antibiotics.

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During a pivotal study that supported its approval, 84% of patients treated with Talicia were able to eradicate their H. pylori infections, compared to just 58% of the group that received standard care. This noteworthy improvement will probably make Talicia a standard treatment for around 2.5 million Americans treated for H. pylori infections annually.

Now what

An estimated 50% of the world population is currently living with an H. pylori infection, including around 100 million Americans. Digestive systems infected with this particular microbe are far more likely to experience ulcers and develop gastric cancer.

In 2018, net revenue from RedHill's product line more than doubled to $8.4 million, and the company narrowed its annual loss to $38.8 million.

A successful launch could boost RedHill's stock price through the roof. As of Oct. 22, 2019, the company had about $59 million in cash on its balance sheet. If RedHill's early-2020 launch for Talicia hits the ground running, the company probably won't need to visit the equity well again.

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