Elan Corp. plc on Tuesday became the third company to receiveFood and Drug Administration marketing approval for atransdermal nicotine patch. The company's stock (AMEX:ELN)jumped $3.88 to $53.63 on the news.

The 24-hour ProStep patch will be sold by American Cyanamidsubsidiary Lederle Laboratories for about $4 per day. Designedto help smokers quit in about four to eight weeks, the patchdelivers 22 milligrams of nicotine a day. Lederle will offerusers a support program to help them quit.

Last November, the FDA approved patches developed by Ciba-Geigy Corp. and Alza Corp. (AMEX:AZA). Ciba-Geigy's patch isdesigned to be used for three months at decreasing monthlydosages of 21 mgs, 14 mgs and 7 mgs. Alza's 10-week patch,which is being marketed by Marion Merrell Dow Inc., is alsodesigned to be used in decreasing dosages in conjunction withbehavior modification therapy.

Elan estimates the U.S. nicotine patch market will reach $300million to $600 million by the end of the decade and up to $1billion worldwide.

The Athlone, Ireland, company's patch is sold by prescriptionin Ireland and South Korea, and received over-the-counterapproval in Italy last week.

The only patch under development that has not yet beenapproved is made by Cygnus Therapeutic Systems Inc.(NASDAQ:CYGN). Cygnus has licensed its patch to KabiPharmacia, which has granted U.S. marketing rights to Warner-Lambert.

The competition over marketing the patches has beencomplicated by a spate of lawsuits alleging patent infringementbetween the companies.

Elan/Cyanamid have sued Alza/MMD and Cygnus. Ciba-Geigyhas filed suits against Alza/MMD and Elan. Elan/Cyanamid havefiled a counterclaim against Ciba-Geigy. The courts thus farhave refused to grant injunctions blocking sales of the patchespending resolution of the suits.

Alza dropped $1.38 to $48.63. Cygnus lost 75 cents to $24.25. -- SU

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