NEW YORK, Sept 27 (Reuters) - Coley Pharmaceutical Group Inc. (COLY.O: Quote, Profile, Research) on Tuesday said it is starting an early-stage clinical trial of an experimental drug to treat chronic Hepatitis C virus.

Coley expects preliminary data from the Phase Ib study of the drug, Actilon, to be available in the second half of 2006.

The study will involve 60 patients infected with the virus, who will be divided into different treatment groups over a period of three months. Some patients will take only Actilon, some will take it in combination with one or two standard treatments, and some will take standard treatments without Actilon.

The company, which went public last month, has also attracted attention because of three other promising experimental drugs, especially ProMune, which is entering late-stage trials against non-small cell lung cancer. Coley, based in Wellesley, Massachusetts, is developing that product with Pfizer Inc. (PFE.N: Quote, Profile, Research)

Its drugs are designed to stimulate the immune system by acting on proteins called Toll-like receptors. Actilon acts through the Toll-like receptor 9 found in dendritic cells and B cells, which are mainstays of the immune system.

Shares of Coley were up $1.52, or 9.4 percent, to $17.64 on Nasdaq. (Additional reporting by Ransdell Pierson)