Regulators have cleared

Celgene's

(CELG) - Get Report

leprosy drug Thalomid as a treatment option for newly diagnosed cases of the blood cancer multiple myeloma.

In after-hours trading Thursday, shares of Celgene jumped 97 cents, or 2.4%, to $41.41.

Multiple myeloma, the second-most common blood cancer after non-Hodgkin's lymphoma, affects roughly 50,000 people in the U.S. Around 14,600 new cases are diagnosed each year, and about 12,000 Americans are expected to die of multiple myeloma in 2006, Celgene says.

Even though Thalomid was previously approved only for leprosy, the majority of its sales were attributed to off-label prescriptions given by doctors to treat multiple myeloma. Under the new Food and Drug Administration approval, Thalomid would be given in combination with the steroid dexamethasone.

Celgene said the effectiveness of Thalomid is based on the response rates of patients. There haven't been any controlled trials demonstrating a clinical benefit, such as an improvement in survival.

Thalomid is Celgene's trade name for thalidomide. The drug was cleared by the FDA as a leprosy treatment in 1998. Prior to that, thalidomide was infamous for causing severe birth defects in children whose mothers had taken it while they were pregnant.

Celgene is also seeking approval for Revlimid, an updated form of Thalomid, for multiple myeloma, and expects an FDA decision by June 30. Revlimid would be used in patients whose disease worsened or didn't respond to previous treatments.