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Shares of Auxilium Pharmaceuticals Inc. (AUXL) are up 11% after the drug maker received Food and Drug Administration approval for Xiaflex in treating a hand disorder late Tuesday.
The Malvern, Pa., biotech, has been waiting for an agency decision since the Fall after getting the positive recommendation of an FDA panel of outside experts in September. The initial target date for the approval was prior to the panel, which added a level of uncertainty to the timing of the agency's final decision for both Wall Street and the company.
"We were set to go back in the second half of last year," Auxilium President and Chief Executive Armando Anido said in a recent interview. After printing labels and making final preparations, the company plans to launch the drug in late March using about 100 sales representatives. In waiting for regulators to make a decision, the company has been building inventory of Xiaflex.
"At this point I think we are as ready as you can get," Anido said.
Shares of Auxilium recently traded up 14% to $31.94 on more than five-times is usual volume.
"We view Xiaflex as one of a handful of innovative, highvalue biologics and expect AUXL shares to outperform as investor's gain confidence in the drug's commercial success," analyst Eric Schmidt with Cowen & Co., wrote in a note to clients.
Schmidt estimates U.S. sales of the drug being $30 million in 2010 and rising to $420 million in 2014.
Auxilium will sell the drug itself in the U.S., and its overseas partner Pfizer Inc. (PFE) has already filed for approval in Europe.
Auxilium already sells Testim, a topical testosterone gel, and reported total revenue of $125.4 million in 2008.
Xiaflex, an enzyme that breaks down collagen, treats Dupuytren's contracture, a buildup of collagen in the hands that can prevent extension of the fingers.
The approval of the drug requires a post-approval plan for evaluating and reducing any risk associated with the drug, including a communication plan, medication guide, and providing instructions for properly using the drug.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169; firstname.lastname@example.org