Amgen said Tuesday that U.S. drug regulators have cleared the way for the biotech giant to sell its new anti-anemia drug, Aranesp.

The Food and Drug Administration approved the drug for patients suffering from anemia related to kidney disease. Aranesp is a longer-acting version of Amgen's current blockbuster anti-anemia drug, Epogen.

The final approval of Aranesp was a highly anticipated event in biotech. Wall Street and Amgen were expecting to launch the drug in the first half of the year, but negotiations between the company and the FDA slowed down the process.

Amgen

(AMGN) - Get Report

is up $1.39, or 2.3%, to $62.24 in early Tuesdaytrading. Shares of the company fell 5% Monday in theoverall market selloff.

Now that Aranesp is approved, the big remaining questionis how much revenue will it generate.Many biotech analysts believe the drug will be anotherbillion-dollar blockbuster, especially because Aranespwill be open to more new groups of patients than Epogen, whichcontributed $1.9 billion to Amgen's top line lastyear.

Amgen is also expected to file this week with the FDAseeking approval to sell Aranesp to cancerchemotherapy patients who also suffer from anemia.This is the drug's biggest potential market, currentlycontrolled by

Johnson & Johnson

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, which racked up $2.7billion in Procrit sales last year, mostly to cancerpatients. Procrit is the brand name used by J&J, butthe drug is exactly the same as Epogen.

"Aranesp represents the next phase of growth forAmgen," said Amgen Chairman and CEO Kevin Sharer.

But Amgen bears believe that Aranesp may have a toughtime meeting the sales goals expected by Wall Street.The drug's first approved treatment -- anemiaassociated with early kidney disease -- is arelatively untested market. And the FDA will notapprove Aranesp for cancer patients until next year,and then it will meet stiff competition from J&J'sProcrit.