NEW YORK (CNNMoney.com) - Cubist, a Massachusetts biotech, could more than triple the sales of its skin-infection drug if the FDA approves its use for another infection, and its stock surged 7 percent Wednesday ahead of the ruling.

The drug, Cubicin, is the company's only product and has been on the market since 2003, when it was approved to treat skin infections caused by a specific type of bacteria. Cubicin sales totaled $113.5 million in 2005. Now, the company is applying to get its intravenous antibiotic approved to treat blood infections that are related to the infection of heart valves.

An advisory panel for the Food and Drug Administration is meeting on Monday to discuss and vote on the extra indication for Cubicin and to vote on whether it should be approved by the agency. The advisory vote is a suggestion, not a final decision, but the FDA follows the advice of its panel most of the time. The FDA is expected to make its ruling on March 24.

FDA advisors often hold meetings for drugs that are considered controversial. In this case, analysts say that Cubicin is being scrutinized over this potential new indication because it's the first of its kind.

"I think every time the FDA wants to review something people are being scared," said Eun Yang, analyst for Jefferies & Co., who rates the company a "buy" with a 12-month price target of $30. "[Advisors] are going to slice and dice the data and come up with more questions than answers."

But investors seem to be betting on Cubist (up $1.47 to $23.58, Research), having sent up the stock price in recent days. Yang said Cubist's study of the drug for the new indication has been successful and the FDA should give it the go-ahead. "I really don't see why the FDA would not indicate this drug," said Yang. "You never say never but I think it's highly likely the drug will be approved for this indication."

Yang projected that Cubicin annual sales will peak at $500 million in 2010 if the FDA approves the drug for the extra indication, or $300 million if the FDA does not.

Adam Cutler, analyst for JMP Securities, also believes that the FDA will approve the blood infection indication "given the high level of medical need and the fact that the study was successful." Cutler rates Cubist a "strong buy" with similar forecasts as Yang.

Cutler said that Cubicin's main competition is a generic drug called vancomycin, which has been available for decades as an antibiotic to treat heart valve disease. Patented drugs often have a difficult time competing with the cheaper generics with similar indications. But Cutler said that Cubicin has an edge because it is taken once a day and has stronger potency than vancomycin, which is taken twice a day.

Cubicin was originally discovered by Eli Lilly & Co. (up $0.18 to $55.80, Research) under a different name and the rights were acquired by Cubist, which developed the drug and got approval from the FDA, according to Cubist spokeswoman Eileen McIntyre. The drug is given to patients in hospital settings 60 percent of the time, and is given to out-patients by home health care workers 40 percent of the time. McIntyre said the potential patient pool is large, with nearly one million Americans treated for this specific type of blood infection in 2004, the most recent year for which information is available.

The analysts interviewed for this story do not own shares of Cubist stock.

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