U.S. health regulators on Tuesday approved Amgen Inc's novel cancer immunotherapy for injection into melanoma lesions and lymph nodes of patients with the deadliest form of skin cancer that returns after initial surgery.

The drug, to be sold under the brand name Imlygic, is an engineered version of a herpes virus that kills cancer cells when injected directly into cancerous lesions on or under the skin, destroying them from the inside, while also priming the immune system to attack the disease.

The Food and Drug Administration said Imlygic, known chemically as talimogene laherparepvec, or T-Vec, is the first oncolytic virus therapy to be approved in the United States. It is awaiting European approval after receiving a favorable recommendation from regulators there.

Amgen said it expects the average cost of Imlygic therapy to be about $65,000, and that it will be available to U.S. patients within a week. The company said it is studying the drug in combination with other immunotherapies in advanced melanoma and other solid tumor cancers.

This represents the sixth U.S. approval for Amgen in the last 12 months, including another cancer drug, Blincyto, and its potent new cholesterol fighter Repatha.

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The U.S. Imlygic approval was widely expected after an advisory panel to the FDA in April voted 22-1 to support its approval, despite a lack of definitive overall survival data on the treatment.

"T-Vec represents an important milestone in using viruses as the vehicle to stimulate immune response and fight cancer," Tim Turnham, executive director of the Melanoma Research Foundation, said in a statement. "Despite remarkable advances in the past four years, the majority of patients with metastatic melanoma still die from this cancer."

Wall Street analysts expect the drug to be a relatively small product for the world's largest biotechnology company. Thomson Reuters Cortellis forecast peak sales of $387.5 million by 2020.

The Imlygic label contains warnings that it should not be used by pregnant patients or anyone with a compromised immune system. It also notes that accidental exposure to the drug could lead to transmission of herpetic infection.

Amgen shares rose just over 1 percent to $163.50 in extended trading from a Nasdaq close at $161.98.