NEW YORK (AP) -- Shares of Stemline Therapeutics climbed Thursday after a Jefferies & Co. analyst started covering the stock with a "Buy" rating, saying its first cancer drug could bring in more than $500 million in annual sales.

THE SPARK: Analyst Thomas Wei began coverage with a price target of $60 on Stemline shares, which is nearly double the stock's current trading range. He said early clinical trial results for the company's leukemia and lymphoma drug SL-401 have been impressive, and data from longer trials could be better. He said those studies will start in 2014.

Wei thinks the drug will be approved and that peak sales will exceed $500 million a year.

THE BIG PICTURE: Stemline Therapeutics Inc. is developing drugs that target cancer stem cells, the cells from which tumors grow. Its most advanced drug candidate, SL-401, is being studied as a treatment for two types of cancers that have recurred or not responded to previous treatment. One is acute myeloid leukemia, and the other is BPDCN, or blastic plasmacytoid dendritic cell neoplasm. BPDCN is a rare, aggressive type of blood cancer.

SL-401 has been granted orphan drug status in both conditions. That means Stemline will have extended marketing exclusivity if the drug is approved. The New York company is also studying SL-701 as a treatment for glioma, a tumor that starts in the brain or spine.

SHARE ACTION: Stemline Therapeutics shares spiked over 10 percent to peak at $38.38 during Thursday's session, but recently were trading up 4 percent at $35.22. The shares have more than tripled in value since the company's IPO priced at $10 per share on Feb. 1.