As expected, the U.S. Food and Drug Administration granted approval on Feb. 8 for Celgene's (NASDAQ:CELG) Pomalyst in treating patients with multiple myeloma. Patients must have received at least two prior therapies including Revlimid and Velcade and show progression of the disease.

What it means
The immediate impact of the FDA decision is that Pomalyst will hit the market over the next few weeks. Celgene's Revlimid continues to be the leading drug for treating multiple myeloma. It is followed by Velcade from Johnson & Johnson (NYSE:JNJ) and Takeda.  As the approval language indicates, though, Pomalyst won't directly compete against these two established drugs.

Pomalyst will be used in treating the same patients targeted by Onyx Pharmaceuticals' (UNKNOWN:ONXX.DL) Kyprolis, which received FDA approval in July. Like Pomalyst, Kyprolis received approval as a third-line treatment for patients who already tried Revlimid and Velcade. However, it seems likely that both Pomalyst and Kyprolis will be successful as many patients could try each drug and some could even use both concurrently.

Celgene thinks that Pomalyst could be its next blockbuster drug. It has good reason to have high hopes. Some estimates count around 45,000 multiple myeloma patients in the U.S. and Europe who failed two prior therapies. Considering that Kyprolis is priced at $10,000 per 28-day cycle and Pomalyst is expected to be priced a little higher than that, the market represents an opportunity topping $5 billion in total annual sales.

Looking ahead
Of course, these types of numbers assume that Pomalyst will gain approval in Europe also. Celgene submitted a Market Authorization Application to European regulators last June. The company expects a decision from the European Medicines Agency in the second half of 2013.

Even prior to a European decision, Pomalyst should begin making a meaningful contribution to Celgene's bottom line as early as the second quarter. Because the drug carries an embryo-fetal risk, there are limitations about who can take Pomalyst. However, Celgene is ready to hit the ground running with its restricted distribution program that certifies prescribers and pharmacists.

I continue to be quite bullish on Celgene's prospects and look for Pomalyst to add significant revenue over the next several years. Good news for those suffering with multiple myeloma should be good news for Celgene shareholders, too.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.