The Acrux Limited (ASX: ACR) share price has been an exceptionally strong performer on Tuesday.
In morning trade, the pharmaceutical company's shares are up a massive 39% to 16 cents.
Why is the Acrux share price rocketing higher?
The catalyst for the rise in the Acrux share price this morning has been the release of a very positive update.
According to the release, the US Food and Drug Administration (FDA) has granted approval of the company's generic version of Jublia (efinaconazole) topical solution.
Jublia is an FDA-approved prescription topical solution that is applied on, around, and under the toenail. It reaches the site of onychomycosis to fight the fungus that lives beneath the nail. Acrux notes that Jublia sales currently exceed US$217 million per year in the United States.
This has been a lengthy process for Acrux. The company first submitted an abbreviated new drug application (ANDA) to seek approval from the FDA in June 2018. It has also been through a patent dispute, which has since been settled.
Positively, this is the company's second generic product that has been approved by the FDA this year. In January, Acrux was given approval for a generic version of Perrigo's Testosterone Topical Solution. This product has a US$25 million market opportunity in the United States at present.
What now?
Following the receipt of approval from the FDA, Acrux will progress licensing negotiations with a commercial licensee to commercialise the product. This will be in accordance with the terms of the patent settlement agreement. When launched, Acrux's product will provide a lower cost alternative to Jublia for patients in the United States.
Despite today's impressive gain, it is worth noting that the Acrux share price is still trading slightly lower year to date. Shareholders will no doubt be hoping it is onwards and upwards from here for its shares.
