South Korea's Daewoong Pharmaceutical said its anti-parasitic drug niclosamide had eliminated the novel coronavirus from animals' lungs during testing.
Drugmakers worldwide are rushing to develop treatments for the illness caused by the new coronavirus, which has killed more than 400,000 globally since it first emerged late last year in China.
Daewoong said its experimental anti-viral drug completely cleared up the disease in ferrets' lung tissues and inhibited inflammation. The company plans to start human clinical trials in July.
Three other companies around the world are testing niclosamide as a coronavirus treatment, but Daewoong is the only one that offers the drug in a form that is not given orally, the company official told Reuters.
The company tested the drug on ferrets for around three months.
"Based on the positive outcome of the animal test, we plan to complete human trials and get approval of the COVID-19 treatment drug by the end of this year," said Jeon Seng-ho, CEO of Daewoong Pharma.
There is no treatment for COVID-19 and human trials of several other antiviral drugs have not shown conclusive benefits.
Shares in Daewoong Pharma jumped 48.2% in three trading days after last week's announcement, as of Tuesday.