The Food and Drug Administration on Monday approved AstraZeneca's ( AZN) drug Iressa for use in patients with advanced lung cancer.

Iressa will be used as a stand-alone treatment for non-small-cell lung cancer patients who have failed all other approved treatments. Lung cancer accounted for about 157,000 deaths in the U.S. last year, making it the leading cause of cancer death in the U.S.

Iressa works by blocking an enzyme responsible for signaling a protein called the epidermal growth factor receptor, or EGFR, which is present in large quantities in many cancer cells. When the protein is blocked, cancer cells seem to stop growing or shrink.

Iressa is the first of the so-called EGFR inhibitor drugs approved for use in the U.S. ImClone Systems ( IMCLE), Abgenix ( ABGX) and OSI Pharmaceuticals ( OSIP) (with partner Genentech ( DNA)) are all working on similar cancer drugs.

Shares of AstraZeneca were up $2.39, or 5.9%, to $43.15 in recent trading. ImClone shares were also up, 43 cents, or $1.95, to $21.41. Shares of OSI were down $1.36, or 5.9%, to $19.93, while Abgenix was off 11 cents, or 1%, to $10.66.

Iressa's approval may signal a new willingness on the FDA's part to speed up approval of new drugs, especially those for very ill patients who have no other treatments available.

The FDA granted Iressa's approval under accelerated review; this requires AstraZeneca to conduct follow-up studies to confirm the drug's clinical benefit. On Monday, AstraZeneca said it would conduct three additional studies, comparing Iressa's use with that of another cancer compound and with the best supportive care.

Also, the FDA approved Iressa without any significant warnings on the drug's label tied to patient deaths from interstitial lung disease, which has caused concern in Japan, where the drug has been approved since last year.