ATLANTA (CNNMoney.com) - Thalomid, formerly the bane of the pharmaceutical industry as a dangerous pregnancy painkiller, has gotten a second life and could help fast-growing Celgene corner the market as a blood cancer treatment.

Researchers unveiled late-stage studies on Monday that showed how Thalomid and another Celgene drug, Revlimid, could be used to slow the spread of multiple myeloma, a specific type of blood cancer. There is no cure for this disease, which kills 12,000 Americans a year and is diagnosed in 14,000 annually.

"This clearly demonstrates that both Thalomid and Revlimid should be, and are now, considered the standard of care of all patients with multiple myeloma," said Matthew Osborne, analyst for Lazard Capital Markets. "They clearly are establishing a monopoly."

Thalidomide, the base compound for Thalomid, has a notorious history as a painkiller for pregnant women in Europe in the 1950s and 1960s, and was blamed for horrible birth defects including missing limbs. But research has since shown the pill to be useful in treating other diseases.

Since 1998, Thalomid has been an FDA-approved treatment for symptoms of leprosy, with strict rules applying to its use by sexually active women, and an absolute ban on use by pregnant women. On May 25, the Food and Drug Administration approved the drug as a treatment for patients with multiple myeloma. Doctors had already been using the drug for this purpose "off-label," helping fuel a 25 percent jump in 2005 sales to $389 million. This drove Celgene's overall sales, which surged 42 percent last year to $535 million.

Studies funded by Celgene and reported Monday at the annual conference of the American Society for Clinical Oncology not only strengthened Thalomid's use as a multiple myeloma treatment, but it showed that another Celgene drug, Revlimid, could be used to treat patients for whom Thalomid did not work. This is what Osborne, the Lazard analyst, was referring to when he mentioned a "monopoly."

The studies showed that Thalomid combined with chemotherapy prolonged the lives of multiple myeloma patients by an average of 22 months longer than chemotherapy alone. This type of blood cancer originates in the bone marrow, and bone marrow transplants are often used to treat patients. Thalomid with chemo extended life by 17 months longer than transplants, according to the studies.

Revlimid is currently approved to treat blood disorders known as myelodysplastic syndromes. Studies reported on Monday showed that patients with a different disease, multiple myeloma, who failed treatment with Thalomid would live longer if they then used Revlimid. These studies showed that patients who took Revlimid with a standard steroid treatment lived an average of 11 months without their blood cancer spreading, more than six months longer than those who just underwent chemo.

Prior to the release of these studies, Rachel McMinn, analyst for Piper Jaffray, projected Thalomid sales would reach $397 million in 2006 and $546 million in 2010. McMinn projected Revlimid sales would total $271 million in 2006 and $1.7 billion in 2010. The analyst has a 12-month price target of $59 a share for Celgene (Research), which closed at $41.56 on Monday.

Revlimid has been filed with the FDA as a multiple myeloma treatment, and the agency is expected to make its decision on June 30.

Though Celgene's blood cancer drugs are perceived as the dominant products, they face some competition from Velcade, a drug developed by Millennium Pharmaceuticals (Research) and Johnson & Johnson (Research).

Celgene, a New Jersey-based biotech, is the fastest-growing tech company in the drug industry.

"We are right now the preeminent company in myeloma," said Celgene chief executive officer Dr. Sol Barer, shortly after the studies were released. Barer said his goal was to become the "preeminent company in blood cancer, and then, the preeminent cancer company."

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