US FDA approves Axiron, first testosterone replacement from Eli Lilly and Acrux

US drug major Eli Lilly (NYSE: LLY) and Australian partner Acrux (ASX: ACR) have received US Food and Drug Administration approval for their Axiron (testosterone) topical solution CIII for replacement therapy in men for certain conditions associated with a deficiency or absence of testosterone. Safety and efficacy of Axiron in males younger than 18 years of age have not been established.

Lilly licensed the product from Acrux earlier this year (The Pharma Letter March 16), and the Australian firm will now receive a payment of $87 million from Lilly. It will also get royalties and further payments of as much as $195 million based on sales. Acrux’ shares rose 9.1% to A$3.36 as of the close of trading in Sydney yesterday, the highest level since the stock listed in September 2004, and giving the company a market capitalization of A$550 million ($541.3 million).

The hypogonadism market represents a nice niche opportunity for Eli Lilly. Hypogonadism is a disorder that affects approximately 39% of men over the age of 45. According to data from IMS Health, global sales of testosterone therapies have increased to more than $1 billion per year, with sales of testosterone gels in the USA comprising $700 million.