The Food and Drug Administration has approved a new type of breast cancer drug developed by ImmunoGen (NASDAQ:IMGN) and Roche (OTC:RHHBY), and will be marketed by the latter. The medication, known by the brand name Kadcyla, is used to treat HER 2-positive metastatic breast cancer. It is a combination of Herceptin, an existing Roche drug, with a pair of components developed by ImmunoGen.

HER2 is a protein found on the tumors of roughly 20% to 25% of patients with breast cancer.

The approval will trigger a $10.5 million payment from Roche to ImmunoGen. The latter will also be paid royalties of up to 5% on sales of Kadcyla, which will cost $9,800 per month.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.