Allergan ( AGN) said Tuesday that it has received regulatory approval for its Restasis drug, a treatment for chronic dry-eye disease. The drugmaker's shares were recently trading up $4.46, or 8.5%, at $57.20 on the
New York Stock Exchange . The Irvine, Calif.-based company said the Food and Drug Administration gave the go-ahead on the drug following a pivotal Phase III clinical trial in which patients suffering from ocular inflammation experienced increased tear production. Dry-eye disease is a painful and irritating condition that involves abnormalities and deficiencies in the tear film of the eye and gets progressively worse with age. The drug is administered in droplet form, and it works by controlling the body's natural immune response. "We have been the scientific and marketing leader in this area and are very excited about the ability to offer the first therapeutic option for treatment," said Lester J. Kaplan, Ph.D., Allergan's president of research and development, in a prepared statement. The company believes that the therapeutic segment of the dry-eye market could grow as large as $300 million to $500 million over the next three to five years. Allergan remains comfortable with its previous guidance of sales growth in the mid-to-high teens and earnings growth of 22% to 25% for 2003. The drug is expected to launch in the second quarter of 2003, but due to launch costs and royalties on the product Allergan said the profit impact for next year is expected to be "modest."