Shares in a Swedish biotech firm soared on Wednesday on news that the company had inked a distribution deal in China for its tampons "bathed in human lactic acid bacteria".

Within two hours of the announcement of the agreement between Swedish biotech company Ellen AB and China's Beijing Zhonglian Pharmaceutical, shares in the company shot up 39 percent on the First North stock exchange.

By 1pm, Ellen AB stock was trading at around 2 kronor ($0.29) per share.

"We couldn't have asked for better timing for Ellen's launch in China," Ellen CEO Monica Wallter said in a statement.