U.S. drug regulators approved a new testosterone gel from BioSante Pharmaceutical Inc and Teva Pharmaceuticals, a Food and Drug Administration spokeswoman said.

Bio-T-Gel is a topical, once-a-day gel absorbed by the skin to treat low testosterone levels in men, a condition known as hypogonadism.

Shares of the specialty drugmaker BioSante spiked almost 37 percent in after-market trading on Nasdaq to $1.04. Teva shares rose 1.3 percent to $44.10.

About 4 million to 5 million men in the United States suffer from low testosterone, which can cause impotence, a lack of sex drive, muscle weakness and osteoporosis, according to BioSante. The company estimates the market for such drugs tops $1 billion.

BioSante first developed the gel and then licensed it to Teva for late-stage development. BioSante will get certain milestone payments and royalties once the drug is being sold.

BioSante got FDA approval for its gel for men within a year of submitting its application to the agency, but its efforts to develop a similar gel for women have faltered.

BioSante's "female Viagra" LibiGel failed late-stage trials in December, leading the small company to cut a quarter of its workforce to conserve cash.

LibiGel joined a long line of aborted efforts from drug companies to find a female counterpart to Pfizer Inc's blockbuster impotence drug Viagra.

In 2004, an FDA panel rejected Procter & Gamble's testosterone patch Intrinsa for safety concerns, and another FDA panel also denied Boehringer Ingelheim's pink sex pill in 2010. Alista, an attempt by Vivus Inc, failed a mid-stage trial in 2006.