* U.S. FDA approves Imfinzi for stage III lung cancer
* Green light puts AstraZeneca ahead in market segment
* Rival BMS, Merck, Roche drugs approved for later disease (Adds details on competition, size of market opportunity)
By Ben Hirschler
LONDON, Feb 17 (Reuters) - AstraZeneca's immunotherapy drug Imfinzi has won crucial approval from U.S. regulators for use in lung cancer, opening up a multibillion-dollar market for a medicine that has so far lagged behind competitors.
The U.S. Food and Drug Administration said late on Friday it granted approval for expanded use of Imfinzi to treat non-small cell lung cancer (NSCLC) patients with inoperable mid-stage disease that has not spread widely around the body.
Imfinzi is the first immunotherapy to be approved in this setting.
The green light - which had been expected following positive clinical data last year - gives AstraZeneca a chance to intervene earlier in lung cancer, distinguishing it from rivals that have approval for tackling advanced or metastatic disease.
Analysts believe using Imfinzi in so-called stage III lung cancer, where cancer has only spread locally, opens up an annual sales opportunity worth around $2 billion. Importantly, AstraZeneca has a lead of two to three years over other drug companies in this particular area.
The approval was based on a trial involving 713 patients, showing patients survived on average 16.8 months without their disease worsening when given Imfinzi, against just 5.6 months for those on placebo.
Globally, approximately 30 percent of patients with NSCLC present with stage III disease. These individuals typically receive a combination of chemotherapy and radiotherapy, but only around 15 percent of them are still alive after five years.
Imfinzi, chemically known as durvalumab, belongs to a new class of immuno-oncology drugs that block a mechanism tumours use to evade detection from the immune system.
AstraZeneca's drug already had approval for treating certain patients with bladder cancer. However, this market is relatively small.
The really big opportunity for all companies seeking to exploit the power of modern immuno-oncology drugs is lung cancer, since it is the leading cause of cancer deaths.
Bristol-Myers Squibb, Roche and Merck all have approved products for treating certain patients with advanced lung cancer - but AstraZeneca is now in a position to carve out a niche in treating earlier stage III patients.
AstraZeneca still hopes to catch up in the advanced lung cancer market, too, by combining Imfinzi with another immunotherapy drug called tremelimumab.
Initial results from a clinical trial testing this combination proved disappointing last July but the company has a second chance to prove the case for its cocktail when overall survival data are released later this year.
Some analysts forecast potential sales of all immunotherapy drugs at as much as $50 billion a year. Still, significant challenges remain, including deciding on optimal treatment regimens for using infused medicines with typical list prices near $150,000 a year. (Additional reporting by Akankshita Mukhopadhyay in Bengaluru; Editing by Alison Williams)