NEW YORK (CNNMoney.com) - The FDA approved Pfizer's Exubera, the first inhalable form of insulin for diabetics.

"Until today, patients with diabetes who need insulin to manage their disease had only one way to treat their condition," said Dr. Steven Galson, director of the FDA's Center for Drug Evaluation and Research, in a press release. "It is our hope that the availability of inhaled insulin will offer patients more options to better control their blood sugars."

The FDA announced the approval Friday afternoon. Before the bell on Friday morning, Pfizer (up $0.94 to $25.99, Research) chief executive officer Henry McKinnell mistakenly said that Exubera had been approved by the FDA, but the company immediately corrected his comments and said the decision is still pending.

After the real approval, McKinnell said in a press release: "Exubera is major, first-of-its kind, medical breakthrough that marks another critical step forward in the treatment of diabetes, a disease that has taken an enormous human and economic toll worldwide."

But now that Pfizer, and its Exubera partner Nektar Therapeutics (up $0.13 to $20.75, Research), have gotten the green light, they could have a potential blockbusters on their hands. Barbara Ryan, analyst for Deutsche Bank, projected that Exubera sales could peak at $2 billion by 2010.

Many other analysts have projected the drug will reach $1 billion a year, though some analysts doubt the drug's effectiveness.

Exubera is a dry, powdered form of insulin that is inhaled into the lungs. This is the first new form of delivery since diabetics started injecting insulin in the 1920s.

Exubera was also approved by the European Commission, the European equivalent of the Food and Drug Administration, on Thursday. Also on that day, the FDA approved Pfizer's cancer drug Sutent.

Diabetes treatment is considered a lucrative industry in the United States, home to more than 20 million diabetics, according to the American Diabetes Association.

An FDA advisory committee had voted in favor of Exubera approval in September, so there was little doubt it would get the nod.

To read more about Exubera, click here.