NEW YORK (CNN/Money) - A new drug developed by Genentech to treat vision loss could shake up the market for drugs treating age-related blindness, analysts say.

Genentech (Research) said late Monday that late-stage testing of its drug Lucentis showed that about 95 percent of patients maintained or improved their vision after using its drug Lucentis, compared with about 62 percent of those in the control group.

Lucentis treats wet age-related macular degeneration, also known as AMD. Wet AMD is a leading cause of blindness and occurs when blood vessels behind the retina begin to leak, according to the National Eye Institute.

"The really interesting thing (from the Lucentis results) is the second endpoint, which shows it's the only drug where patients improve," said Matthew Geller, an analyst with CIBC World Markets Corp., referring to the clinical trial results that showed that patients treated with Lucentis on average showed "significant improvement" in their vision after being treated with the drug for 12 months.

If Lucentis is perceived to be a more effective treatment, that could bite into the sales of rival drugs Macugen and Visudyne.

"Given that the (results) were so compelling, we would presume that Lucentis will be the therapy of choice in AMD," Deutsche Bank analyst Jennifer Chao said.

Macugen, a newcomer to the AMD market developed by Pfizer (Research) and Eyetech (Research), can expect to see sales fall when Lucentis hits the market in 2007, since it treats AMD in a manner similar to Lucentis, analysts said.

Visudyne, which has about $400 million in annual sales and dominates the market, is also likely to see its market share trimmed by the new drug of choice.

Although since Visudyne is used as a phototherapy and treats AMD in a manner different from Lucentis, its outlook is harder to predict. Furthermore, Genentech is conducting ongoing trials that uses combined treatments of Lucentis and Visudyne.

Deutsche Bank's Chao said as Lucentis is launched in 2007, she expects it to eventually cannibalize Visudyne and eclipse Macugen.

Visudyne is produced by Canada-based QLT Inc. (Research), which derives a majority of its sales from its blindness drug.

Shares of Genentech closed 2 percent higher Tuesday while Nasdaq-listed shares of QLT Inc. shed about 13 percent. Eyetech stock nearly halved its value to close at $12.92 on the Nasdaq.

About 3 million people are expected to be afflicted with AMD over the next 10 to 15 years, according to the National Eye Institute. Wet AMD accounts for about 10 to 15 percent of that population, Chao said.

"(The wet AMD market) is already pretty big. There are treatments, but this looks like a positive step," Geller of CIBC World Markets Corp. said.

Analysts said current therapies make up a market worth about $500 million to $700 million, and Chao said she expects Lucentis to drive the AMD market towards a billion dollars.

Bernstein & Co. analyst Geoff Porges forecast sales for Lucentis in the range of $200 to $300 million, but added that the AMD opportunity could be even greater given Genentech's better-than-expected trial results.

Analysts cautioned that it will be important to watch for long-term, stable results of the drug, which still needs to be approved by the Food and Drug Administration before it can be prescribed.

Genentech also has a cancer drug in the pipeline. Click here for more.

The analysts interviewed for this story do not own stock in the companies mentioned here. Deutsche Bank does not conduct investment banking with the companies, but CIBC World Markets has done investment banking for Genentech and QLT. Alliance Capital, the parent company of Bernstein & Co., does not have an investment banking relationship with any of the companies.