Biosante Pharmaceuticals said the Food and Drug Administration approved its Bio-E-Gel, which treats hot flashes associated with menopause.
Shares of Biosante jumped on the American Stock Exchange. The stock has traded between $1.48 and $4.80 over the last 52 weeks.
The drug, estradiol gel, will be marketed in the U.S. as Elestrin by Bradley Pharmaceuticals of Fairfield, N.J. Biosante received just over $2.6 million under the agreement. The company could receive an additional $40 million in future payments.
FDA approval already triggered an additional payment of just under $7.9 million, of which $5.3 million will be paid in 14 weeks and another $2.6 million will be paid within one year.
Rodman & Renshaw analyst Ilya Kravets expects Elestrin to hit the market in 2007 and that sales could reach $100 million in 2010. He reaffirmed a "Market Outperform" rating with a price target of $4 in a note to investors.
In that note, he said Bradley's Kenwood Therapeutics division will market the product with at least 49 sales representatives.
Shares of Bradley have traded between $9.15 and $23.16 over the last 52 weeks.