* To price therapy on a par with rivals

* To conduct post-approval observation study

* Shares volatile; last down 2 pct (Adds analyst, CEO comment, share movement)

By Tamara Mathias

May 30 (Reuters) - Women's healthcare company TherapeuticsMD Inc won its first-ever U.S. approval on Wednesday with the drug regulator clearing its hormone therapy for a painful condition triggered by menopause after rejecting it a year earlier.

The company's shares were volatile, oscillating between gains and losses. They had risen more than 50 percent since the U.S. FDA declined to approve the treatment and then agreed to let the company reapply without a new study.

"Given the drug's review history and apparent market skepticism as to its approvability, the FDA's decision should be viewed as a major event," Cantor Fitzgerald analyst William Tanner said.

The treatment, Imvexxy, has been approved for use in two doses to treat moderate-to-severe dyspareunia, or vaginal pain associated with sex, but comes with a black box warning, the regulator's strictest, flagging risks of cardiovascular disorders, probable dementia and endometrial and breast cancers.

On a call with analysts, Chief Executive Officer Robert Finizio said the drug's label was better than expected, despite the warning.

Dyspareunia is a symptom of vulvar and vaginal atrophy, a condition triggered by the loss of female hormone estrogen after menopause that the company estimates affect about 32 million women in the United States.

The company said its 4 mcg dose is set to be the lowest available on the market, at a time when the FDA is pushing for lower doses of hormone therapies.

"When you have the lowest effective dose, that's a huge advantage," Finizio said.

Imvexxy is expected to bring in peak U.S. sales of $650 million by 2032, according to an estimate by Jefferies analyst Matthew Andrews.

The company, which plans to conduct a post-approval observational study, plans to price Imvexxy on a par with currently available treatments.

Imvexxy is delivered through a softgel capsule inserted into the vagina, distinguishing it from competing products including Allergan Plc's Estrace cream and NovoNordisk's Vagifem insert.

The approval also turns the spotlight on TherapeuticsMD's second hormone therapy, TX-001, which analysts expect to be approved by October.

TX-001, which will treat menopause symptoms, particularly hot flashes, is already being seen as a potential blockbuster by analysts.

Imvexxy and TX-001 are expected to rake in revenue of $112 million in 2019, according to Cantor Fitzgerald analyst Tanner. (Reporting by Tamara Mathias in Bengaluru; Editing by Sriraj Kalluvila)