Alimera Sciences Inc. (NASDAQ: ALIM) traded up big on Monday on news that the company received U.S. Food and Drug Administration (FDA) approval for its drug Iluvien. The company stated that a single Iluvien implant provides treatment of diabetic macular edema for three years, and this is represented as being the first long-term treatment of its sort.

pSivida Corp. (NASDAQ: PSDV) was up only 2% at $4.38 in Monday’s trading session, but its trading volume was 1.2 million shares, versus average daily volume of about 222,000 shares. The treatment was shown to be developed by pSivida and licensed to Alimera, and pSivida said it will get a $25 million payment as a result of the approval. It will also get 20% of net profits on sales in the United States. Iluvien is approved in the United Kingdom and other European countries.

Alimera said that it expects to begin selling Iluvien in the United States during the first quarter of 2015. Because this release date is in the 2015 fiscal year, we cannot expect that Alimera will see any significant sales in the 2014 fiscal year.

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Very few analysts follow Alimera, and we could only find one in the Thomson Reuters universe giving estimates for the 2015 fiscal year. The one analyst has estimates for the 2015 fiscal year of -$0.20 in earnings per share and $57.3 million in revenues.

Alimera had this to say about the trial:

Each ILUVIEN implant is designed to release submicrogram levels of fluocinolone acetonide (FAc), a corticosteroid, for 36 months. The ILUVIEN approval was based on clinical trial data that showed that at month 24 after receiving the ILUVIEN implant, 28.7 percent of patients (p value .002) experienced an improvement from baseline in their best corrected visual acuity on the Early Treatment Diabetic Retinopathy Study (ETDRS) eye chart of 15 letters or more. Patients treated with ILUVIEN experienced a statistically significant improvement in visual acuity compared to the control group by week three of follow up, and maintained a statistically significant advantage over the control through completion of the trial at month 36.

After word of this FDA approval, the stock price climbed as high as $5.99 — a gain of 21.5% in the first hour of trading on Monday. The trading volume was already more than 2 million shares, which is over 10 times its normal trading volume for a full day.

The stock has a reported consensus price target of $7.00 and a 52-week trading range of $1.65 to $8.44. It has a market cap of roughly $218 million. News of this sort is likely to attract more analysts to cover the stock, now that it has a larger FDA approval in hand. Alimera was shown to have almost $42 million in cash and short-term investments on its balance sheet as of June 30, 2014.

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