Thalidomide received federal approval Thursday for treatment of bone-marrow cancer, marking the further rehabilitation of a drug originally banned more than 40 years ago after it caused thousands of birth defects.

The Food and Drug Administration approved the drug for the treatment of newly diagnosed multiple myeloma, agency spokeswoman Laura Alvey said. Multiple myeloma refers to cancers that affect cells in the bone marrow that are key to fighting infection.

Thalidomide, made by Celgene Corp. of Summit, N.J., and sold as Thalomid, is to be used in treating multiple myeloma in conjunction with dexamethasone, a standard chemotherapy treatment.

Recent studies have given mixed views of the drug's effectiveness in treating multiple myeloma. In one study published in March, researchers found the drug did not prolong patients' lives. However, in a second study published the same week, the drug did appear to allow older patients to live longer, but at the price of serious side effects.

Thalidomide was banned worldwide in 1962. In 1998, it received FDA approval for the treatment of leprosy. It is now marketed under a restricted distribution program and bears severe warnings cautioning patients of the risk of birth defects. Its new labeling also warns of the risk of blood clots in the legs and lungs in multiple myeloma patients who take it with dexamethasone.

Thalomid previously has been widely prescribed for multiple myeloma — a so-called "off-label" use for the drug.