What happened

Shares of the mid-cap biotech Neurocrine Biosciences (NASDAQ:NBIX) rocketed higher today as a result of the Food and Drug Administration (FDA) approving the company's first drug, Ingrezza, as a treatment for adults with tardive dyskinesia (TD). Tardive dyskinesia is a movement disorder involving the tongue, lips, face, trunk, and extremities in patients treated with anti-psychotic medications for long periods of time. The drugmaker's shares were up by 23% as of 11:45 a.m. EDT on the back of this positive regulatory news. 

Positive trending chart.

Image source: Getty Images.

So what

Ingrezza is the first drug approved in the U.S. for this rare but debilitating movement disorder. So, from a value-creation standpoint, this first-mover advantage may be worth upwards of $1 billion in peak sales, according to some analysts.  

Now what

Neurocrine isn't wasting any time in getting Ingrezza's commercial launch underway. The company plans to have the drug in the distribution channel by next week through a select pharmacy network. And Ingrezza's broader promotion will reportedly start on May 1.

The one potential hiccup in Ingrezza's commercialization, though, may be the entry of Teva Pharmaceutical Industries(NYSE:TEVA) rival drug, Austedo. Teva's Austedo is currently under priority review with the FDA, with the agency assigning the drug a Prescription Drug User Fee Act target action date of Aug. 30. So, Austedo could be on the market for TD before the end of 2017.

The good news is that the FDA blessed Ingrezza with a fairly clean label, whereas Austedo already carries a black-box warning for depression when used as a treatment for Huntington's chorea. In other words, Ingrezza should ultimately garner both a first-mover and best-in-class advantage over Teva's drug.

George Budwell has no position in any stocks mentioned. The Motley Fool recommends Teva Pharmaceutical Industries. The Motley Fool has a disclosure policy.