Piper Jaffray analyst Thomas Wei said the recent FDA approval of Genentech's new drug, Lucentis, could provide long-term upside to Genentech shares.

Lucentis is used to treat the so-called wet form of age-related macular degeneration, or wet AMD, a leading cause of blindness in people over 55.

Genentech (nyse: DNA ) trials showed that 95% of the patients who used the drug maintained their vision, while up to 40% saw their vision improve after one year of treatment.

Management announced the wholesale acquisition cost for a vial of Lucentis will be $1,950.

Given that the average patient will receive five to seven injections of Lucentis a year to treat their wet AMD, Wei estimated the yearly cost per patient will be around $11,700.

That is a 20% to 60% premium to the cost of other currently available AMD treatments like Macugen from Pfizer (nyse: PFE - news - people ) and Visudyne from Novartis (nyse: NVS - news - people ).

As a result, Wei raised his 2006 earnings estimate on Genentech to $1.95 from $1.92 per share. He also raised his 2007 estimate to $2.42 from $2.41.

The analyst maintained an "outperform" rating and $120 price target on Genentech shares.