Chinese drugmaker Jiangsu Hengrui Medicine has got approval from the US Food and Drug Administration to conduct Phase 1 clinical trials for its drug to treat Type II diabetes.

The announcement, made on Thursday, boosted investor confidence in the company and its shares surged nearly 7 percent in the past two days. Once the drug completes the three clinical trials, it can sold in the US markets and would be revenue accretive immediately.

Hengrui Medicine is the third Chinese drug company to get US FDA nod for clinical trials. The other two are Chinese herbal medicine companies, but until now, no made-in-China drugs have got approval for sales in the US markets.