Actelion the Swiss biotech company saw its shares climb over 5% to their highest since 2007 on Monday.
Its stock prices increased on optimism that it had a viable product to gain sales and earn profit after an approval in the U.S. for its new lung and heart drug.
The U.S. Food and Drug Administration gave its approval to the Swiss biotech company’s new pulmonary arterial hypertension drug known as Opsumit late Friday. It did not put a black box warning that requires ongoing mandatory testing on the liver.
Analysts have put a buy rating on the Actelion stock and raised its target price from 70 francs to 72 francs. On Monday, shares in Actelion were 5.3% up in early trading.
PAH or Pulmonary arterial hypertension is characterized by having high blood pressure in arteries that connect the heart with the lungs, which causes the heart’s right side to work harder than is normal and leads to the sufferer having a shortness of breath.
Opsumit is part of a class of medications known as endothelin receptor antagonists. These medicines relax pulmonary arteries and have a goal of lowering that arterial pressure.
Analysts have said the drug has unique indications for delaying the progression of the disease and to reduce hospitalization caused by PAH.
One analyst estimates sales of the new medication will reach $1.4 billion by assuming a 40% new patient share at a price discount of 15% to Tracleer and Letairis a Gilead rival drug.
Analysts at one other brokerage were cautious and said the doctor’s requirement to carry out a liver test prior to the prescribing of Opsumit would be more burdensome that what is required of Letairis.