Japan's fourth-largest pharmaceutical company, Eisai (OTC BB: ESALY.PK), successfully resubmitted to the FDA a new drug application targeting its popular Alzheimer's drug Aricept to new markets. Eisai was rebuffed last year, when its application was rejected by the regulatory agency for technical deficiencies. The company submitted a corrected application this past December, and the FDA announced its acceptance of that application on Monday.

Aricept is the world's most widely prescribed drug for treating Alzheimer's patients, though it's only for those with mild to moderate symptoms of the disease. But Eisai also wants to use the drug to treat patients with moderate to severe symptoms. Approval from the FDA would allow the pharmaceutical to move in on the turf currently occupied by Forest Labs (NYSE:FRX), which markets Namenda, the only FDA-approved treatment for that latter class of patients.

There is no cure for Alzheimer's. Drugs like Aricept, Namenda, Reminyl from Johnson & Johnson (NYSE:JNJ) and Shire Pharmaceuticals (NASDAQ:SHPGY), or Novartis' (NYSE:NVS) Exelon only slow the progression of the symptoms. However, Aricept has been shown to give greater cognitive abilities to patients with mild to moderate symptoms. Their greater awareness and ability to care for themselves can be huge benefits for both patients and their families.

It is estimated that 4.5 million people in the U.S. suffer from Alzheimer's and that by 2025, an estimated 37 million people will be afflicted worldwide. The market for treatment of Alzheimer's is equally large, accounting for $3 billion in worldwide sales in 2004; it's expected to grow to $5 billion by 2009. Aricept, which is marketed with the help of Motley Fool Inside Value pick Pfizer (NYSE:PFE), is the top-selling treatment, accounting for 40% of the Alzheimer's-drug market in 2004 with $1.35 billion in sales. Year-over-year revenues have already grown 17% for the nine months ending Dec. 31, to $1.2 billion.

It would obviously be a lucrative coup for Eisai to encroach on Forest Labs' turf. The moderate-to-severe market had third-quarter sales of $124 million, a 23% increase over the year before. With doctors already prescribing Aricept for the milder forms of Alzheimer's, it's hardly a leap to see the drug cutting into Namenda's sales for the more severe cases, too. Forest Labs saw its profits fall 25% last quarter because of competition from generics and an unexpected payment to a partner, and new competition would only add to its woes. Meanwhile, Eisai has its own problems with generics; it has charged Teva Pharmaceuticals (NASDAQ:TEVA) with infringing on its Aricept patents.

There is no timetable for FDA approval of Eisai's application. It's possible that even with the favorable evidence the company submitted, the agency will reject this new use. That just means that Eisai will have to return to the lab and try, try again.

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Fool contributor Rich Duprey owns shares of Eisai but does not own any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.