* Drug to be priced at about $500 per shot
* Osteoarthritis drug market to hit $3.5 bln by 2026 - GlobalData
* Shares touch record high in regular market hours (Adds bullets, details on rivals, market size; Updates shares)
By Divya Grover
Oct 6 (Reuters) - Flexion Therapeutics Inc said its injectable drug to treat osteoarthritis-related knee pain was approved by the U.S. Food and Drug Administration, sending the drug developer's shares soaring to a record high in regular trading on Friday.
The approval comes at a time when U.S. federal authorities are implementing a slew of measures to combat opioid abuse, with President Donald Trump in August declaring the opioid epidemic a national emergency.
The osteoarthritis drug, Zilretta, which will treat moderate-to-severe knee pain, would be priced at about $500 per shot and launched in October, Flexion's CEO Mike Clayman told Reuters.
The market for osteoarthritis drugs is expected to increase from $1.6 billion in 2016 to $3.5 billion by 2026, according to GlobalData.
"Zilretta ... has the potential to be a gamechanger in osteoarthritis knee pain treatment," Wells Fargo analyst David Maris said.
Osteoarthritis is mainly associated with aging and elderly patients who often have other related conditions, such as diabetes or hypertension.
The approval could cast Flexion as a potential takeover target, according to RBC Capital Markets.
Development of rival drugs from Japan's Seikagaku Corp and South Korea's Kolon Life Science Inc is underway.
Zilretta, a modified formulation of a commonly used corticosteroid, could bag potential peak sales of more than $750 million, Northland Capital Markets analyst Carl Byrnes said.
Steroids move rapidly from joints into the blood elevating sugar levels in diabetic patients. Zilretta, however, is slowly released in the body and reaches the blood in much lower concentrations, preventing major changes in blood-glucose levels.
Osteoarthritis of the knee is a degenerative joint disease that affected more than 15 million Americans in 2016.
Burlington, Massachusetts-based Flexion's shares closed up at $29.93 on Friday.
Reporting by Divya Grover and Tamara Mathias in Bengaluru; Editing by Martina D'Couto