By Leroy Leo and Manojna Maddipatla
(Reuters) -Oyster Point Pharma Inc's treatment for dry eye disease became the first U.S. approved nasal spray for the chronic condition, sending the drug developer's shares about 7% higher in morning trade.
The company said on Monday its spray, Tyrvaya, will be made available from next month to patients with a prescription, but did not reveal its listing price.
Tyrvaya's potential market size could be more than $1 billion, Cowen and Co analyst Ken Cacciatore said in a note, as the market is still large and underserved.
The dry eye disease -- characterized by stinging, sensitivity to light, blurred vision and eye fatigue -- affects about 38 million Americans, and is currently treated with over-the-counter artificial tear drops such as GenTeal and Refresh.
Oyster Point Chief Commercial Officer John Snisarenko said Tyrvaya will be "very affordable and competitive" with Novartis' Xiidra and AbbVie Inc (NYSE:ABBV)'s Restasis -- prescription eye drops also used to treat dry eye disease.
He said patients will have to pay around $10 out of pocket for Tyrvaya if their insurers do not cover the drug.
Oyster Point said the twice daily nasal spray was tested in trials covering over 1,000 patients with mild, moderate or severe symptoms, where it showed statistically significant improvement in production of tear film on eye surface.
Tear film helps keep eyes moist, reducing risks of infection and contributing to clear vision.
Tyrvaya, the first approved product for Oyster Point, is significantly differentiated from competition due to its faster onset of action, impressive safety and tolerability profile, and ease of use, Cacciatore said.
It is a nasal spray formulation of the drug varenicline, also used in Pfizer Inc (NYSE:PFE)'s smoking cessation drug, Chantix.