The FDA has granted approval for a new cancer drug that uses the body's own immune system to fight tumors, and is the first in what is hoped to be a new range of drugs that could revolutionize how some cancers are treated.

The drug, Keytruda, is manufactured by Merck & Co. (NYSE:MRK), and is designed to treat advanced melanoma, that which has spread or cannot be surgically removed.

Keytruda is the first PD-1 inhibitor (programmed death receptor-1) drug approved in the U.S., and received the FDA’s Breakthrough Therapy designation for advanced melanoma. PD-1. The drug works by blocking a cellular pathway that restricts the body’s immune system from attacking cancer cells.

According to a Wall Street Journal report, the drug will cost $12,500 a month and Merck says the median usage is just over 6 months, which works out to a $77,500 price tag, or $150,000 on annualized basis.

Oncologist Antoni Ribas of UCLA told a 2012 medical conference in Chicago that PD-1 inhibitors were “likely the most exciting new agents recently developed in melanoma.”

In addition to providing a new and possibly more effective method of combating cancers, the drug also benefits patients because it has fewer negative side effects than chemotherapy or surgery. Ribas told the Washington Post that 90 percent of patients “have basically no side effects.”

“Keytruda is the sixth new melanoma treatment approved since 2011, a result of promising advances in melanoma research,” said Richard Pazdur, M.D., director of the Office of Hematology and Oncology Products in the FDA’s Center for Drug Evaluation and Research. “Many of these treatments have different mechanisms of action and bring new options to patients with melanoma.”

Melanoma accounts for approximately 5 percent of all new cancers in the United States.