Shares of

Eyetech Pharmaceuticals

( EYET) fell Monday even though several analysts said the company's experimental eye disease drug Macugen has a good chance of securing government approval.

The analysts were encouraged by what they said were favorable comments Friday from some members of an advisory panel to the Food and Drug Administration, which reviewed the drug Eyetech is proposing as a treatment for wet age-related macular degeneration, or wet AMD. The disease causes a disintegration of vision over time, affecting the center of the field of vision and leading to blindness. Company-sponsored tests show that Macugen can reduce the rate of vision loss.

The FDA advisory committee didn't vote on Friday, but analysts still expressed confidence that the panel would support the drug. The FDA isn't bound by opinions from its advisory committees, but it usually follows their recommendations.

Still, Eyetech's stock was down $3.30 or 8.8%, to $34.16 Monday. Volume was almost four times the average daily trade over the last three months.

Eyetech's stock was halted for much of Friday while the advisory committee deliberated. The stock traded for about 30 minutes on Friday and was extremely erratic, going as high as $42 and as low as $35.46 before closing at $37.46. Friday's trading volume was a staggering 3.2 million shares, or about five times the normal daily trading volume for the past three months.

One possibility for the skidding stock has been the expiration of lock-up agreements affecting New York-based Eyetech, which went public in late January. On July 28, approximately 15.6 million shares became eligible for sale upon the expiration of a 180-day lock-up agreement, according to an Eyetech prospectus. More timely is the fact that some 13.3 million other shares became eligible for sale Aug. 26 when a 90-day lock-up agreement on a follow-on offering expired, according to a prospectus.

Eyetech's partner in developing and selling the drug is

Pfizer

(PFE) - Get Report

. Its stock, which wasn't halted Friday, slipped 20 cents, or 0.6%, to $32.45 on Monday.

Favorable Comments

"There were no negative surprises" at the advisory committee meeting, said Mark E. Augustine, a biotech analyst for Credit Suisse First Boston, in a post-meeting research report to clients. Augustine said the panel voted 9-0 "that sufficient Macugen data has been submitted to evaluate efficacy and safety," adding that the group didn't take a formal vote because Macugen is being reviewed under an FDA pilot program in which companies are allowed to make periodic submissions of data rather than waiting to submit all data at once.

"Most panelists demonstrated support for Macugen's approvability by concurring that the drug's 'benefits strongly outweigh any risks.'" Augustine, who has a neutral rating on the stock, said the FDA could act by mid-December and could give Eyetech approval to market the drug as a treatment for all types of the eye disease. (He doesn't own shares; his firm has an investment banking relationship with Eyetech.)

Bear Stearns analyst Thomas DesChamps also told clients in a post-meeting analysis that he saw "no surprises" at the meeting. He maintained his belief that the drug would "likely" be approved by the FDA in December and launched early next year. He said peak annual sales could exceed $1 billion. "The committee did not have any major concerns about the safety and efficacy profile of the drug," said DesChamps, who has a peer perform rating on Eyetech.

However, he said he was surprised "by the panel's lack of familiarity with the ophthalmic drug approval process generally and Macugen specifically." He added that this "creates some uncertainty as to the use of this committee's review in the final FDA decision." Providing some cautionary comments, DesChamps added that "it appeared from the general nature of the discussion that FDA has had limited time" to review certain data. "It is unclear if an additional panel meeting will be held prior to final approval," he said. (DesChamps doesn't own shares; his firm has had an investment banking relationship with Eyetech.)

Macugen has triggered considerable attention among doctors and investors because existing treatments for wet AMD are limited. There are an estimated 1.6 million Americans with wet AMD, and their numbers are increasing at a rate of about 200,000 new cases a year, according to analysts' reports.

Eyetech and Pfizer are seeking FDA approval based on tests that show patients taking Macugen lose less vision to the disease than patients receiving a placebo. The vision quality was measured by how many letters a person could detect on an eye chart.

Wet AMD is caused by an overgrowth of new blood vessels in the macula, which is part of the retina and enables fine detailed vision. When these vessels leak blood or fluid, the macula bulges. That causes distorted vision and, subsequently, a loss in central vision and blindness.

Although several companies are developing wet AMD treatments, there are only two therapies now available. Patients can be treated with thermal lasers, which are fired at the unwanted blood vessels in the eye. That blocks the vessels' growth; but the lasers simply halt the disease's progression, leaving a permanent blind spot where AMD has already done its damage. Lasers don't stop new blood vessels from developing; nor do they restore vision.

The other treatment involves the intravenous injection of Visudyne, made by

Novartis

(NVS) - Get Report

and the Canadian biotechnology company

QLT

(QLTI)

.

Visudyne chemically sensitizes the eye, which is then exposed to infrared light, also known as a cold laser. This therapy stops the unwanted blood vessels from leaking. It doesn't cause blind spots; but it doesn't restore lost vision and doesn't stop the development of new blood vessels. Called photodynamic therapy, this treatment helps only 20% to 25% of the wet AMD patients, according to a Bear Stearns report issued earlier this summer.

The Eyetech-Pfizer approach tries to block the development of unwanted blood vessels before they can spread, leak and cause damage. This is the same strategy used by

Genentech

( DNA) in creating its colon cancer drug Avastin, which block the development of new blood vessels that feed cancer tumors. Genentech is working on a wet AMD drug, called Lucentis, which is still in clinical testing.

Another experimental drug is Retaane, from

Alcon

( ACL). Retaane also fights the development of new, unwanted blood vessels. Analysts expect Retaane to follow Macugen into the marketplace, perhaps by a year. Alcon is expected to complete its Retaane application to the FDA by the fourth quarter.