Addyi, whose chemical name is flibanserin, is designed for premenopausal women whose lack of sexual desire causes distress. The condition is formally known as hypoactive sexual desire disorder, or HSDD. The drug needs to be taken daily.

Addyi has been nicknamed the “female Viagra” even though it does not work like Pfizer Inc’s blockbuster Viagra pill for men that in 1998 became the first approved drug for erectile dysfunction.

“This is the biggest breakthrough in women’s sexual health since the advent of ‘the Pill'” for contraception, The National Consumers League said in a statement. “It validates (and) legitimizes female sexuality as an important component of health.”

But Public Citizen, a consumer watchdog group that testified against the drug earlier this year, predicted that Addyi will be pulled from the market within a few years because of “serious dangers to women, with little benefit” to them. “Unfortunately, we haven’t heard the last of this drug.”

The FDA had twice rejected the Raleigh, North Carolina-based firm’s drug. But the latest decision comes after an advisory panel concluded in June it should be approved with strict measures in place to ensure patients are fully aware of the risks.

Sprout officials could not immediately be reached for comment.

The news sent shares of Palatin Technologies, which is creating a rival drug for HSDD, up about 30 percent to $1.21 in extended trade.

Palatin’s experimental treatment called bremelanotide is now in late-stage trials and works differently from Addyi. It attempts to activate certain brain pathways.

Palatin in a statement late Tuesday said its drug, if approved, would only be taken as needed, not on a daily basis like Addyi, thereby providing women “greater control and flexibility in their treatment.”

Unlike Viagra, which affects blood flow to the genitals, Addyi is meant to activate sexual impulses in the brain. It is similar to a class of other drugs known as selective serotonin reuptake inhibitors, or SSRI’s, that include antidepressants such as Prozac.

Women who took Addyi in a clinical study had an increase of about one sexually satisfying event per month compared with those taking a placebo. Advocates claim that increase is meaningful. Critics say the small benefit is outweighed by the drug’s risks.