Oct 24 (Reuters) - Merck & Co Inc on Monday said the U.S. Food and Drug Administration has approved its immunotherapy Keytruda for use in certain previously untreated lung cancer patients, making it the only approved first-line treatment.

The drug has been approved for treating metastatic non-small cell lung cancer (NSCLC) patients with high-levels of a protein known for suppressing the immune system called PD-L1.

Keytruda works by taking the brakes off the immune system by blocking the interaction between PD-L1 and another protein, PD-1. The drug has already been approved for patients who have undergone previous chemotherapy for advanced non-small lung cancer.

Monday's announcement gives Merck the only approved first-line treatment for lung cancer, one of the biggest markets for cancer drugs. Rival Bristol-Myers Squibb Co's drug Opdivo failed a late-stage trial for the same indication.

The approval was based on data from a late-stage study which showed Keytruda achieved superior progression-free and overall survival compared to chemotherapy in patients whose tumors expressed high levels of the protein, Merck said.

Doctors are currently allowed to prescribe medicines for not yet approved uses but FDA's approval of Keytruda could greatly increase the number of patients taking the drug.

Shares of Kenilworth, New Jersey-based drugmaker fell 0.7 percent in aftermarket trade. Up to Monday's close, the stock had gained more than 15 percent of its value year to date.

(Reporting by Dipika Jain in Bengaluru; Editing by Lisa Shumaker)