Yesterday Elan (NYSE:ELN) announced that partner Johnson & Johnson (NYSE:JNJ) had filed a marketing application for a once-a-month form of its antipsychotic drug Invega.

If approved 10 months from now, Invega would become the longest-lasting dosed atypical antipsychotic drug on the market. Getting a longer-lasting version of drugs like these onto the market is important because many schizophrenics have difficulties self-medicating with daily dosed oral drugs such as Eli Lilly's (NYSE:LLY) Zyprexa or Pfizer's (NYSE:PFE) Geodon.

Currently Johnson & Johnson's Risperdal Consta is the longest-lasting atypical antipsychotic on the market; it has a two-week dosing schedule. It was developed using a drug delivery technology from rival Alkermes (NASDAQ:ALKS) and took in $924 million during Alkermes' fiscal year 2007.

Other competitors, including Eli Lilly and Vanda Pharmaceuticals, are also developing once-a-month injectables of atypical antipsychotics, so the market for these long-lasting compounds could start to get very crowded in a few years.

Johnson & Johnson hasn't released sales numbers for Invega since its launch in 2006, so it's difficult to gauge the market for a longer-lasting version of the drug. If J&J's partnership deal with Elan is similar to its deal with Alkermes for Risperdal Consta, then Elan stands to gain a 2% to 5% royalty rate on sales of Invega. 

This wouldn't be the first drug that Elan has used its drug delivery technology on. It has also developed an improved version of Abbott Laboratories' (NYSE:ABT) cholesterol treatment Tricor and Merck's (NYSE:MRK) chemotherapy-induced nausea prophylactic drug, Emend. 

Elan's prospects are tied largely to the success or failure of its multiple sclerosis treatment Tysabri and to Alzheimer's disease franchise drug candidates, assets at Elan that are not as prominent to stockholders. And Elan doesn't break out its earnings from its nanocrystal drug delivery technology because that's considered part of its manufacturing and royalty revenue ($285 million in revenue last year). It, too, is an asset that shouldn't be overlooked when valuing Elan.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.