UPDATE 3-Eurand gets FDA nod for pancreatic enzyme product

* Expects to launch Zenpep in Q4

* Plans to deploy own salesforce to market drug

* Sees US EPI-drug market growing to $400 mln

* Shares up as much as 15 pct (Adds company comments, updates stock movement)

By Esha Dey

BANGALORE, Aug 28 (Reuters) - Specialty pharmaceutical company Eurand NV EURX.O said U.S. health regulators approved its pancreatic enzyme product, Zenpep, to treat the inability to digest food due to a lack of enzymes made by the pancreas.

The drug, approved to treat exocrine pancreatic insufficiency (EPI), falls in the class of pancreatic enzyme product (PEP) and would come in four doses to meet the requirements of infants, toddlers, adolescents and adults.

“(Zenpep) is the first FDA-approved PEP in the market that was tested in patients under 12 years of age,” Eurand spokesman Bill Newbould said by phone.

EPI is a common disorder found in those suffering from cystic fibrosis and other conditions including pancreatic cancer and chronic pancreatitis.

The first PEP approved by the FDA was Solvay SA's SOLB.BR Creon. The drug, also known by its generic name pancrelipase and made from pig glands, was approved in May.

Eurand also manufactures another similar product, Ultrase, that is currently under regulatory review. The experimental drug is owned by privately held peer Axcan Pharma Inc.

“We will continue to earn royalties on sales and we will get manufacturing revenue from Ultrase. So we could be in a position to benefit from two out of the three main products in this market,” Newbould said.

EPI drugs have been on the market for so long that they were never required to undergo the FDA approval process. But in 2004, the agency ordered companies to prove that such drugs were safe and effective amid concerns that they may transmit various viruses such as influenza and hepatitis to humans.

Companies selling these enzyme products now have until April 2010 to win U.S. approval or else halt sales.

“The total U.S. market (for EPI drugs) was about $313 million in 2008 and we expect that the market will grow when the low-cost, unapproved pancreatic enzyme products exit the market before the April 2010 deadline. We think that market could grow up to $400 million,” Newbould said.

Eurand, which plans to deploy its own salesforce to market the product, expects to launch Zenpep in the United States in the fourth quarter.

The company also plans to apply for regulatory approval in the European Union but declined to comment on the timeline.

The drug, which was delayed by the U.S. Food and Drug Administration by three months to complete its review, has been approved with a risk evaluation and mitigation strategy (REMS) to ensure that the benefits of the drug outweigh its risks.

Shares of the company were up 11 percent at $14.95 in midday trade on Nasdaq. They touched a high of $15.53 earlier in the session.

For the alerts double-click [ID:nWNAB4741] . (Additional reporting by Anand Basu in Bangalore; Editing by Vinu Pilakkott)