The Upjohn Company may be several years away from receiving Government approval to sell what could be a revolutionary hair-growth ointment, but thousands of balding men are said to be using a homemade version of the product.

And while the company is still a long way from seeing the full financial impact of its drug, called minoxidil, Upjohn may already be realizing considerable benefits from the cottage industry that has grown up around the compound.

Minoxidil has the approval of the United States Food and Drug Administration, but as a tablet taken to treat hypertension. Years ago, however, Upjohn scientists found that the drug promoted hair growth as a side effect. More recently, doctors have been putting patients on minoxidil not to fight hypertension, but to grow hair.

Dr. Michael Lorin Reed, assistant clinical professor of dermatology at the New York University Medical Center, said he had ”at least several hundred people on the drug right now.” Dr. Reed said there were a ”zillion people prescribing” minoxidil for hair growth.

No Final Verdict on Product

While such use by doctors is legal, the F.D.A. said, people might not get the desired results. Upjohn, meanwhile, has been contending that some sellers of the homemade product may be infringing on company patents.

A question remaining about the drug’s use in combating baldness is whether it will be absorbed through the skin and produce unusually low blood pressure.

While a debate is raging over how effective the drug will be against receding hairlines, Wall Street is unanimous in believing the product will be important for Upjohn.

”Topical minoxidil for male pattern baldness could become one of the largest selling drugs in the world and transform Upjohn into one of the fastest growing major domestic drug companies,” said Ronald M. Nordmann, an analyst at Oppenheimer & Company.

Stock Soared Last Week

The investment community’s excitement over the hair ointment was obvious last week when the mention of minoxidil in a routine report by another Wall Street analyst, Paul Brooke of Morgan Stanley & Company, sent Upjohn’s stock soaring $13.375 a share for the week to a final price of $110.25 on Friday.

Mr. Nordmann believes minoxidil, if approved by the F.D.A. for external use, could generate about $500 million in annual sales for Upjohn and net income of $204 million. Upjohn’s total sales in 1984 were $2.18 billion and net earnings were $173.3 million.

But Upjohn may already be seeing some benefits of minoxidil’s popularity for hair growth. While Upjohn will not disclose sales figures for any of its drugs, Mr. Nordmann estimated that sales of minoxidil tablets, under the brand name Loniten, would grow to about $30 million this year, from only $7 million in 1983. ”The growth is clearly not coming from the hypertension market,” he said.

It was in the early 1970’s that Upjohn, a pharmaceutical company based in Kalamazoo, Mich., noticed that minoxidil tablets were causing hair growth in patients. In 1977 it began investigating whether the drug, when applied externally as a liquid, could arrest the balding process. An Upjohn spokeswoman said the results of the studies were not complete, but she added that the company expected to file for F.D.A. approval of the hair ointment later this year, beginning a licensing process that usually takes about two years.

Cost Is $100 a Month

But thousands of men apparently have sidestepped the barriers to using this drug, with the help of medical doctors.

According to Dr. Reed, to convert minoxidil, the hypertension drug, into minoxidil, the hair treatment, 180 tablets are crushed and mixed with water, alcohol and propylene glycol.

That produces two ounces of the hair growth formula, enough for a one-month supply. Rob Davis, a colleague of Mr. Nordmann at Oppenheimer and one of Dr. Reed’s patients, said the formula was applied nightly from an eyedropper, rubbed in and covered with a cap. The cost is $100 a month, he said.

”I think it’s worked fairly dramatically,” said Mr. Davis, who said his existing hair seems to have thickened, although new hair growth has been less dramatic. Dr. Reed agreed that minoxidil held more promise for making existing hair look fuller, rather than for causing new hair to sprout.

According to a spokesman, Upjohn has been warning users that the ground-up tablets might produce different results from the ointment given to the volunteers in the Upjohn study. The F.D.A. agrees, said Bruce Brown, an agency spokesman, noting that the altered product ”may not bear any resemblance to the form that is under investigation.”

In its tests, Upjohn said, it has found that one-third of the volunteers showed hair growth, while on another one-third there was light, fuzzlike growth. The remaining volunteers were not helped by the ointment.