Few things in investing are more fun than when shares of a drug stock jump on the release of positive clinical trial results. Shares of Panacos Pharmaceuticals (NASDAQ:PANC) were up nearly 8% at one point today after it announced more positive phase 2 results for its lead compound, HIV treatment bevirimat.

After stumbling at the beginning of a phase 2b study last year when a tablet formulation of the drug didn't work as planned, Panacos resumed phase 2b clinical testing of bevirimat this quarter. The study results that Panacos announced yesterday were from one small cohort of this restarted study.

This clinical trial was done in patients who had already been treated with other HIV drugs rather than patients who had received no drugs beforehand. Patients in this study who were treated with 250 mg of bevirimat experienced a solid 0.79 log10 viral load reduction. In a prior phase 2a study consisting of mostly treatment-naive patients, 200 mg of bevirimat led to a 0.90 log10 viral load reduction.

It is harder to show efficacy in previously treated patients, such as those in the phase 2b study. So the fact that bevirimat's efficacy in reducing viral loads barely declined in this study versus the treatment-naive patient study is a positive signal. Higher doses of the drug could produce stronger efficacy results and validate at least some commercial viability for the compound.

More trial results testing these higher doses of bevirimat should be completed and released in the third quarter of this year. Panacos expects that the optimal dose of the drug will probably occur somewhere between this next 300 mg-higher dose and the two subsequent 50 mg-higher doses after that. This means that phase 3 studies should be ready to commence in 2008 as planned.

Just the fact that Panacos has a compound with a differentiated mechanism of action compared with other HIV compounds means that there will probably be a market for the drug if it can make it through the clinical trial process. Trading with a market cap of just $200 million, what I said in December still holds true: "investors are getting shares of Panacos at a great fire-sale price now."

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Fool contributor Brian Lawler eats pancakes, hates pirates, and owns shares of Panacos. The Fool has a disclosure policy.