Updated from 9:21 a.m. EST
Shares of United Therapeutics (UTHR - Get Report) jumped 23% Monday after the biotech company received an "approvable letter" from the Food and Drug Administration for its drug Remodulin to treat pulmonary arterial hypertension. The biotech firm said final approval is contingent on discussions with the FDA over the drug's labeling. The regulatory agency will also require United Therapeutics to conduct a post-approval study of Remodulin to verify its clinical benefit.
United Therapeutics was up $2.15, or 23%, to $11.50 in recent Monday trading.
Pulmonary arterial hypertension is a disease in which elevated blood pressure in the lungs causes shortness of breath and heart damage. About 50,000 people in North America and Europe suffer from various forms of the life-threatening disease, according to the company.Remodulin is administered by injection, and will likely be used by doctors on patients who don't respond or fail oral treatments for the disease. One of these oral drugs is Tracleer, from Swiss biotech firm Actelion, which received FDA approval in November. While not considered a first-line treatment for pulmonary arterial hypertension, Remodulin could still rack up $100 million in annual sales if it can grab about 5% of the patients suffering from the disease, according to one hedge fund manager, who's long United Therapeutics. GlaxoSmithKline (GSK - Get Report) also markets an injectable drug, Flolan, for the disease, but the drug must be given to patients directly into a vein. Remodulin, by comparison, is administered by a subcutaneous injection. On a conference call with analysts Monday morning, United Therapeutics executives say they hope to have all remaining FDA issues with Remodulin cleared up in time to get the drug approved and on the market by the end of the second quarter.