“It’s a fantastic step forward in our fight against ALS,” said

Sabrina Paganoni,

the study’s lead researcher and co-director of the Neurological Clinical Research Institute at Massachusetts General Hospital. “While the drug is not a cure for the disease, there is a significant impact on progression and survival.”

Amylyx

said Friday that it had set a list price of $12,500 for 28-day supply of the drug, called Relyvrio, or about $158,000 annually in a patient’s first year of treatment when they take less frequent doses of the drug, and $163,000 annually in subsequent years.

A fair price would be in the range of $9,100 to $30,600 annually, according to the Institute for Clinical and Economic Review, a nonprofit group that works with insurers and drugmakers to estimate the value of medicines.

The company said the drug should be available through specialty pharmacies in the next four to six weeks.

Amylyx

is a Boston-area company founded about a decade ago by

Justin Klee

and

Joshua Cohen

who came up with the idea for Relyvrio while students at Brown University.

“Many years ago we started to become a part of the ALS community and most of the people with ALS we worked with early on aren’t here today,” Mr. Klee,

Amylyx’s

31-year-old co-chief executive, said in an interview. “And to now have the opportunity to help is the honor of a lifetime.”

The approval comes as several drugmakers advance new ALS drugs, and after Canadian medicine regulators had cleared the drug for sale under the name Albrioza, prompting some patients in the U.S. to look for ways to get Amylyx’s product.

“This approval provides another important treatment option for ALS, a life-threatening disease that currently has no cure,” said

Billy Dunn,

director of the FDA’s neuroscience drugs office.

In making its decision, the FDA was forced to juggle the patients’ demand for new treatments with the concerns of staff and some neuroscience experts about whether testing demonstrated Relyvrio truly works.

The agency also faced pressure to approve from patient-advocacy groups including the ALS Association, which contributed $2.2 million raised from the 2014 ice-bucket challenge to Relyvrio’s development.

“This is a victory for the entire ALS community, which came together to advocate for early approval,” said ALS Association Chief Executive Calaneet Balas.

The ALS Association isn’t eligible to receive sales royalties, but is eligible to be paid back 150% of its grant contribution, or about $3.3 million, Ms. Balas said.

People taking the Amylyx drug in combination with other approved ALS drugs had a 25% reduction in their disease progression over six months in a midstage, or Phase 2, study of 137 people.

The study measured the progression of people with ALS using questionnaires gauging the patients’ ability to perform physical functions such as walking, talking and swallowing.

Björn Oskarsson,

an ALS specialist at the Mayo Clinic in Jacksonville, Fla., said he advised against approval in a public comment to the FDA earlier this year because of what he said were inconsistencies in Amylyx’s clinical trial results that warrant further investigation.

Yet he said he would likely prescribe it to patients. “This could very well work, and if you don’t approve it, there’s quite a few people who will not have gotten this drug who would have benefited from it,” said Dr. Oskarsson, who previously served on an Amylyx advisory board.

Amylyx initially submitted data to the FDA showing that its drug helped patients live 4.8 months longer on median than the placebo group in its Phase 2 trial.

Earlier this month, Amylyx presented a new analysis of patients in its Phase 2 trial that estimated patients receiving its drug would have lived 9.7 months longer on median than patients receiving placebos.

FDA reviewers, however, expressed skepticism of the analyses because the study wasn’t designed to measure survival alone, and relied in part on hypothetical estimates of how long placebo patients would have lived had they not been allowed to switch onto the drug after the study was completed.

The FDA extended its initial deadline for making a decision following a March meeting of an advisory committee that narrowly voted that the drug hadn’t been proven effective.

The agency then took the unusual step of convening a second advisory panel meeting for September to reconsider the drug and additional data analyses provided by Amylyx.

At the second hearing, the FDA advisers reversed course and voted 7-to-2 in favor of approving the drug after Amylyx pledged to voluntarily withdraw the drug from the market if a continuing follow-up study is unsuccessful.

ALS is a relatively rare neurological disease affecting as many as 32,000 people in the U.S.

The condition progresses rapidly, destroying motor neurons in the spinal cord and brain, leading to a loss of movement, fatigue and problems swallowing that cause most patients to die within two to five years of diagnosis.

The most commonly used ALS treatment is riluzole, which is available generically after being approved in 1995 and is thought to prolong life by two to three months. The drug had an average per patient annual cost of $1,150 in 2020, according to Medicare data.

Relyvrio is a combination of two existing drugs, sodium phenylbutyrate and taurursodiol, which some ALS patients already take separately.

However, sodium phenylbutyrate can cost about $5,000 a month in the U.S. and isn’t covered by many insurers for the treatment of ALS. Taurursodiol is only available as an over-the-counter supplement, and patients can’t be assured of its quality, doctors said.

Patients are expected to use Relyvrio with other currently approved ALS treatments, including riluzole and Mitsubishi Tanabe Pharma Corp.’s Radicava, which the FDA approved in 2017 based on a study showing it slowed disease progression.

It can be difficult, however, for patients to get Radicava covered by insurance because of its list price of about $165,300 annually per patient, doctors said.

Drug researchers have struggled to find effective treatments for ALS, though scientists say they have made progress understanding the molecular roots of the disease and several drugs are in development.

Biohaven Pharmaceutical Holding Co.

Ltd. said Thursday that its candidate, called verdiperstat, had failed in a study.

Earlier this month, the FDA said it was joining with the National Institutes of Health and nongovernmental researchers to advance the understanding of ALS and other rare neurodegenerative diseases and support the development of drugs to treat them.

The FDA is scheduled to decide on approval of

Biogen Inc.’s

experimental drug tofersen for a rare genetic type of ALS by Jan. 25. Biogen is seeking approval based on the drug’s ability to reduce a protein called neurofilament that is associated with the death of neurons, despite the drug’s failure in a Phase 3 study to slow patients’ disease progression.

Write to Joseph Walker at joseph.walker@wsj.com