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What: Progenics Pharmaceuticals (PGNX) is up 23% at 3:35 p.m. ET after announcing yesterday after the closing bell that the Food and Drug Administration approved an oral version of the company's opioid-induced constipation drug, Relistor.

So what: In 2011, the biotech licensed Relistor to Salix Pharmaceuticals, which was bought by Valeant Pharmaceuticals (BHC 1.37%) last year. Valeant Pharmaceuticals already sells an injectable version of Relistor, but it isn't a particularly big seller with sales of just $16.6 million in the first quarter, netting Progenics Pharmacetuicals $2.2 million in royalty revenue. The new oral version, which Valeant will start selling in the third quarter, will be easier for patients to take than the injected version, resulting in higher sales.

As part of the deal with Salix, Progenics Pharmaceuticals is due $50 million upon approval of oral Relistor in the U.S. and could get up to $200 million in commercial milestones based on annual sales. The royalty rate also increases as sales increase with tiers at annual sales of $100 million, $400 million, and $500 million.

Now what: Progenics management believes the oral version of Relistor could be a $1-billion-plus opportunity for Valeant, according to an analyst report from Guggenheim's Louise Chen. Even if that's a bit of a stretch, half of that estimate would be a welcome increase in royalty revenue for Progenics Pharmaceuticals to help develop the rest of its pipeline.