U.S. regulators on Tuesday approved a new injectable drug from Regeneron Pharmaceuticals (REGN) - Get Report and Sanofi (SNY) - Get Report to treat patients with eczema.

The FDA approval of Dupixent was widely expected so investors will now focus on the drug's commercial launch, where expectations are high. Analysts are forecasting peak sales as high as $5 billion per year.

Regeneron's shares fell slightly on the news, hitting $382.55 apiece ahead of market's close Tuesday. Sanofi shares, meanwhile, closed unchanged at $45.36 apiece.

Regeneron and Sanofi will launch Dupixent with a gross sticker price of $37,000 per year, before insurance discounts and rebates. The market for the new eczema drug could be 300,000 to 350,000 eligible patients, so investors will watch closely to see if insurers throw up reimbursement roadblocks to limit their cost exposure to the drug.

Tuesday's FDA approval of Dupixent covers adults with moderate-to-severe eczema, also known as atopic dermatitis, that is not controlled adequately by topical therapies. Dupixent is administered by an injection under the skin.

The drug works by binding to a protein that causes inflammation known to be an underlying cause of eczema.

Editor's note: This article was originally published at 11:58 am ET and has been updated to include closing prices.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.