(Corrects headline and paragraph 1 and 2 to "carcinoid syndrome diarrhea" from "carcinoid syndrome")
Feb 28 (Reuters) - The U.S. Food and Drug Administration said on Tuesday it had approved Lexicon Pharmaceuticals Inc's oral drug to treat carcinoid syndrome diarrhea, a condition that develops in patients with gastrointestinal tumors.
The drug, Xermelo or telotristat ethyl, was tested on patients unable to tolerate somatostatin analog therapy (SSA) — the standard-of-care treatment for carcinoid syndrome diarrhea from companies such as Novartis AG and Ipsen SA .
The U.S. health regulator said in September that it required more time to review the drug, extending its decision date by three months, but did not request an additional trial.
The drug is now available by prescription and will be in select specialty pharmacies beginning March 6, 2017.
Patients with carcinoid syndrome secrete excessive amounts of the hormone serotonin, which can cause severe diarrhea, abdominal discomfort and wheezing, among other symptoms.
Xermelo, which has already been granted "orphan drug" and "fast track" status by the health regulator, was designed to be the first approved oral treatment for the condition.
While existing treatments for carcinoid syndrome work to reduce the release of serotonin outside tumor cells, telotristat ethyl works at the source to reduce serotonin production within the tumor cells, offering a new alternative to patients who fail to respond to the current standard of care.
Lexicon, which partnered with French drugmaker Ipsen SA in 2014 to commercialize the drug in Europe and other markets outside the United States, retains the U.S. and Japan marketing rights.
The drug, which is designed to be used in combination with somatostatin analog therapies, like Novartis AG's decade old Sandostatin LAR Depot and Ipsen's Somatuline, will likely be priced in line with the SSA pricing.
Telotristat ethyl will likely be priced between $61,000 - $72,000 per patient per year, according to analysts.
The drug would generate peak global sales of $538.8 million by 2022, Wedbush Securities analyst Liana Moussatos told Reuters.
Ipsen's Somatuline generated sales of 538.3 euros ($569.3 million) in 2016.
Shares of Woodlands, Texas-based Lexicon closed at $16.04 Tuesday on the Nasdaq.
(Reporting by Divya Grover in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)