(Corrects headline and first paragraph of a story published on Sept. 29 to say product is a lotion.)

Sept. 29 (Bloomberg) -- Men with low sex drive because of decreased amounts of testosterone may someday find help as easy as applying an underarm lotion.

The lotion, called Axiron, restored levels of the hormone to normal in 84 percent of testosterone-deficient men after four months, its developer Acrux Ltd. said in a statement today. The Melbourne-based company said it will seek approval this year from the Food and Drug Administration to sell Axiron in the U.S., the world’s largest pharmaceuticals market.

More than a third of American men over 45 years suffer testosterone deficiency, U.S. researchers found in a 2006 study. It can sap sex drive and cause impotence, osteoporosis and memory loss, according to the Mayo Clinic in Rochester, Minnesota. Shares of Acrux, which has never made a profit, have more than tripled this year on anticipation of the trial results.

The trial “exceeded all of our expectations,” Chief Executive Officer Richard Treagus said on a conference call today. “We believe this will generate significant revenue for our company from 2010 onwards.”

The global market for testosterone treatments was worth $1 billion in the year ended March and grew more than 20 percent in the U.S., Acrux said, citing data from IMS Health Inc. The company plans to start discussions with potential partners next month, Treagus said.

Take Profits

Acrux rose 1 cent to A$1.61 on the Australian stock exchange, valuing the company at A$257 million ($225 million).

“We suggest that investors who entered Acrux for the release of these results may care to take profits today,” Tanya Solomon, a health-care analyst with RBS Morgans Ltd. in Brisbane, said in a note to clients today. She owns the stock and rates it a “buy.”

Axiron overcomes problems associated with testosterone gels, which are considered messy, sticky and slow-drying, Acrux said. About 94 percent of patients and 92 percent of doctors rated the product better than testosterone gels when considering the risk of the product rubbing off on other people, the company said.

Acrux Chief Financial Officer Jon Pilcher declined to estimate Axiron’s sales potential. Androgel, a product made by Brussels-based Solvay SA, had sales of 337 million euros ($493 million) in 2008, according to data compiled by Bloomberg. A Testosterone gel made by Malvern, Pennsylvania-based Auxilium Pharmaceuticals Inc. had 2008 sales of $125 million.

In the company-funded study involving 135 men in six countries, test subjects reported having twice as much sex and 80 percent more libido on average after using Axiron. They also had a 35 percent increase in sexual performance and a 13 percent increase in positive mood, the study showed. No serious side effects were reported, Acrux said in the statement.

To contact the reporter on this story: Simeon Bennett in Singapore at sbennett9@bloomberg.net

Last Updated: September 29, 2009 22:26 EDT