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Shares of Auxilium Pharmaceuticals, Inc. (AUXL - Analyst Report) jumped 11.95% with the FDA approving Xiaflex for an additional indication. Xiaflex, which is currently marketed for Dupuytren’s Contracture, gained approval for Peyronie’s disease.

FDA approval makes Xiaflex the first and only treatment approved by the agency that is considered effective for Peyronie’s disease in men with a palpable plaque and a curvature deformity of 30 degrees or greater at the start of therapy. With Peyronie’s disease patients having little other option besides surgery, Xiaflex should be a welcome alternative for Peyronie’s disease patients.

According to data provided by Auxilium Pharma, about 65,000 - 120,000 Peyronie’s disease patients are diagnosed every year. However, only 5,000 to 6,500 Peyronie’s disease patients go for treatment with injectables or surgery.

Although the approval comes with a Boxed warning in the label and a risk evaluation and mitigation strategy (REMS) program, this should not affect uptake of the product.

Our Take

We are impressed with Auxilium Pharma’s efforts to lower its dependence on Testim. The Actient acquisition earlier this year, the full promotional launch of Stendra in January, and now the approval of Xiaflex for Peyronie’s will help strengthen the company’s position in the men's healthcare area.

Xiaflex, in-licensed from BioSpecifics Technologies Corp. , is being studied for additional indications as well including for the treatment of cellulite and frozen shoulder syndrome. Shares of BioSpecifics Technologies were up 6.5% on the label expansion for Xiaflex into the Peyronie’s indication.

Auxilium Pharma currently carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the same sector include BioSpecifics Technologies, Forest Labs , and Questcor Pharmaceuticals, Inc. . All are Zacks Rank #1 (Strong Buy) stocks.

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