Things are looking up for Eli Lilly and Co. and Acrux—the US Food and Drug Administration (FDA) has just approved their testosterone topical solution.  Axiron, a replacement therapy for men with low testosterone levels, is the first testosterone topical solution approved for application via an underarm applicator. Axiron is supposed to hit the market as early as April 2011.

In a statement released Tuesday from Indianapolis-based Lilly, the company said that clinical trial data indicated that Axiron can restore blood concentration of testosterone within the normal range in most men, ultimately increasing their sex drive.

“Lilly is proud to expand our focus in men’s health,” said David Ricks, president, Lilly USA. “The addition of Axiron to our product portfolio reinforces Lilly’s commitment to provide innovative treatment options for patients.”

“The FDA approval is a major milestone for Axiron and for Acrux,” said Dr. Richard Treagus, chief executive officer, of ASX-listed Acrux. “After years of research, we are excited to partner with Lilly to provide this novel application method for men with low testosterone.”

According to the Sydney Morning Herald, Acrux chief executive Richard Treagus said the company would have $145 million in cash reserves after receiving the $US87 million payment now due from its Lilly, because of the FDA approval. If Axiron makes expected sales levels, Acrux could receive up to another $US195 million in payments from Lilly.

Other forms of testosterone replacement therapy include: oral tablets, buccal tablets, subcutaneous pellets, transdermal patches, injections and topical gels applied by the hands.

Although the total number of men with testosterone deficiency is unknown, it has been estimated that up to 13 million men over 45 years of age in the U.S. may have symptoms associated with low testosterone.

Acrux’s shares closed at $3.36 on Wednesday.