The nation's best-selling cancer drug has won federal approval as a treatment for rheumatoid arthritis patients for whom other, older drugs don't work, Genentech Inc. and Biogen Idec Inc. said Wednesday.

The Food and Drug Administration action comes more than eight years after the agency initially approved Rituxan to treat non-Hodgkin's lymphoma.

The two companies said Rituxan should be used by patients who haven't had success with a class of rheumatoid arthritis drugs called tumor necrosis factor, or TNF, blockers. Those drugs include Enbrel, Remicade and Humira.

In rheumatoid arthritis, the body's immune system attacks tissues in the joints, causing inflammation and destroying cartilage, tendons and bones. It often causes disabilities.

Rituxan, known formally as rituximab, is being studied as a treatment for other autoimmune diseases, including lupus and multiple sclerosis, the companies said. The drug is administered intravenously.

Genentech is based in South San Francisco, Calif. Biogen Idec is based in Cambridge, Mass.

An FDA advisory panel is scheduled to meet next week to discuss allowing another Biogen Idec drug, Tysabri, back on the market. The multiple sclerosis drug was pulled last year after it was linked to a rare and often fatal brain disease.

Biogen Idec's shares dropped 42 percent the day the drug was withdrawn. The action prompted an even sharper fall in the stock of Elan Corp. PLC, Biogen's partner in Tysabri. Biogen Idec also announced a plan in September to eliminate 650 jobs, in part because of Tysabri.

Biogen Idec and Elan have recently had to rely on other drugs, including Rituxan, to bolster earnings in Tysabri's absence.

An industry analyst said Wednesday the Rituxan announcement was "very good news" for Biogen Idec as the company seeks to enter the arthritis treatment market.

"I think the near-term earnings opportunity is somewhat minimal for Biogen Idec in that they're entering a competitive market with a limited label, and they've got a lot of selling costs for the product," said Jason Kantor of RBC Capital Markets.

In the long run, however, Kantor said Rituxan could be an increasingly important drug for both Biogen Idec and Genentech, which have a profit-sharing arrangement for Rituxan. Much of that could depend on whether Rituxan is approved for still other uses.

Kantor forecasts Rituxan could eventually reach $1 billion in sales as a treatment for conditions other than cancer. For all uses — cancer and non-cancer — he forecasts U.S. sales of Rituxan to increase from $1.8 billion last year to $2 billion this year, then grow to $2.3 billion next year.