When Endo Pharmaceuticals (ENDP) acquired two experimental testosterone products earlier this year, CEO David P. Holveck predicted that safety issues might delay approval by the U.S. Food & Drug Administration. Synthetic versions of the quintessential male hormone are prescribed to thousands of patients in the U.S. to treat fatigue, sagging libido, and other signs of testosterone deficiency. But when they’re applied as topical gels, they have an unpleasant propensity to rub off on other people—moving, say, from a father to a child and temporarily causing symptoms of puberty, increased aggression, and other annoyances. In addition, the FDA is concerned about the growing use of testosterone by anti-aging clinics seeking to restore youthfulness to baby boomers, and by the abuse of such drugs in sports.

Holveck was right to be worried. On Oct. 19 the FDA said it would not approve Endo’s Fortesta, a topical testosterone gel, until the company performs additional safety trials. Only seven weeks earlier, regulators delayed Endo’s other product in this class, an injectable version—also over safety issues.

It’s no surprise the FDA is being so vigilant. Sales of testosterone products already on the market have rocketed 25% in the 12 months ending in June, to just under $1 billion. The recession has knocked the wind out of other “lifestyle drugs”—medicines to treat conditions that aren’t life-threatening. Even Pfizer’s (PFE) blockbuster Viagra fell 8% in the most recent quarter, year over year.

But not testosterone. Boomer lust for the hormone is now spurring a land grab by companies that make it. On Sept. 28 drug giant Abbott Laboratories (ABT) paid $6.6 billion to acquire Solvay Pharmaceuticals, which makes the leading testosterone product, AndroGel. Auxilium Pharmaceuticals (AUXL) is also angling for market share, and Endo’s Holveck thinks there’s plenty of room for growth. “The driving element is demographics,” he says. Analyst Annabel Samimy, who covers Endo and Auxilium for Thomas Weisel Partners, expects continued double-digit growth for such products, figuring that only 10% of patients who have low testosterone are currently treated.

New entrants in this market, however, will be dealing with a regulatory backlash that began last May. The FDA, having received more than 20 reports of testosterone in commercial products rubbing off on children, required that dreaded “black box” warnings be added to the labels for AndroGel and Auxilium’s rival product, Testim. The companies put boldfaced warnings on all their packaging and marketing material, and they had to produce new package inserts instructing patients to wash their hands thoroughly after applying the gels.

The FDA won’t say what requirements it will impose on testosterone products that are still under review. But Holveck says the agency wants Endo to do a “washing” study on Fortesta. Patients in the trial will have to clean their hands after applying the gel and then be tested to see if residues remain. The requirement will delay approval until sometime in 2010, Holveck predicts.

Testosterone is one of the fastest-growing therapies prescribed by the $80 billion-a-year anti-aging industry, which has embraced it as the cure du jour for andropause, more commonly known as male menopause. Conservative doctors question the existence of such a malady, and testosterone makers shy from discussing it because they’re not allowed to promote the drug “off-label”—for uses not endorsed by the FDA. Still, off-label prescriptions are likely to account for much of the market’s rapid growth. That fact isn’t lost on the FDA: During a press conference to announce the black boxes, an agency spokeswoman said she was alarmed that 25,000 testosterone prescriptions per year are written off-label for women, who use it to boost their libidos.

The market is so hot that, far from fretting about a regulatory crackdown, testosterone makers are focusing on keeping generic competition at bay. Earlier this year, Auxilium filed a petition with the FDA arguing that the agency shouldn’t let a generic version of Testim onto the market without requiring its manufacturer to do washing studies to prove the generic—which has slightly different ingredients—poses no more risk of testosterone transfer than the original. The FDA agreed, freeing Auxilium to concentrate on battling Solvay, which has more than 80% market share, according to researcher IMS Health (RX). In effect, Auxilium turned the agency’s growing safety concerns into a strategic coup: It won’t face low-cost competitors anytime soon.

Auxilium CEO Armando Anido admits he doesn’t have the capital to invest in heavy advertising, as Solvay has done with AndroGel. But he thinks all those Viagra ads urging men to talk to their doctors about erectile dysfunction may be helping him—by fanning interest in products the FDA still views with concern. “Instead of the little blue pill,” Anido says, “those men may end up on testosterone replacement.”

Here’s some British beef, 5 time Mr Olympia.