By Carl O’Donnell and Trisha Roy

(Reuters) – The U.S. Food and Drug Administration said on Monday it approved a drug from Global Blood Therapeutics Inc to treat sickle cell disease in adults and children 12 years or older.

The treatment will be priced at $10,417 per month, or around $125,000 per year, and will be sold under the brand name Oxbryta. It is the second drug in recent days to win U.S. approval for sickle cell anemia, and the first to target the underlying cause of the disease rather than symptoms.

Last week Novartis AG’s Adakveo won U.S. regulatory clearance to reduce the incidence of sickle cell-related pain crises, a common and debilitating symptom of the disease.

“Today’s approval provides additional hope to the 100,000 people in the U.S., and the more than 20 million globally, who live with this debilitating blood disorder,” the FDA said in a statement.

GBT’s drug, known chemically as voxelotor, works by preventing red blood cells from sickling, a deformation that restricts flow of oxygen in blood vessels, leading to severe pain and organ damage.

GBT says that reduced blood cell sickling will significantly relieve symptoms in sickle cell patients. It will track patients’ long-term symptom reduction in a confirmatory study it will launch by the end of this year.

GBT based the price of its drug partly on estimates of the annual cost of care for sickle-cell patients, which can currently run in excess of $285,000 per year to manage patients’ symptoms, GBT’s chief executive officer, Ted Love, told Reuters in an interview.

“We felt we had the opportunity to price this drug in a way that funded innovation but was also a good deal for the wider healthcare system,” Love said.

State Medicaid programs, which cover about half of U.S. sickle cell patients, will receive discounts that bring the cost of the drug down to just under $100,000 per year, or around $8,000 per month, GBT executives said on a Monday conference call.

The Medicaid programs will take about three to six months to conduct a review of Oxbryta before providing widespread reimbursement, but some patients will still be able to begin treatment before that process is concluded, they said.

GBT expects that its drug, Oxbryta, will be used in combination with Novartis’s drug, Adakveo, for the portion of sickle cell patients who have frequent pain crises, Love told Reuters. Novartis has priced Adakveo between $84,852 and $113,136 per year for most patients.

The company’s shares closed up about 7%.

Sickle cell disease in the United States primarily affects African Americans.

About half of the patients the company expects to treat with Oxbryta are covered by Medicaid, and another 15% are covered by Medicare, GBT executives said.

Sickle cell disease remains most prevalent in sub-Saharan African countries, where many of the estimated 300,000 children born annually with the condition may die before the age of 5. The disease is also common in India.

(Reporting by Trisha Roy in Bengaluru and Carl O’Donnell in New York; Editing by Bill Berkrot and Lisa Shumaker)