UPDATE 2-Roche seeks to broaden arthritis drug use in EU, US

* Roche seeking approval for Roactemra/Acemtra to treat sJIA

* Stock up 0.8 pct, outperforms sector

(Adds analyst comment, background, details, stock price)

By Katie Reid

ZURICH, Oct 18 (Reuters) - Roche Holding AG (ROG.VX) is seeking approval to broaden the use of its arthritis drug Roactemra in Europe and the United States to treat a type of childhood arthritis, giving the group a lift after a series of setbacks.

Roche, the world's largest maker of cancer drugs, is looking to bolster its position beyond oncology and sales of the arthritis treatment are seen rising to around $1.6 billion by 2014, according to Thomson Reuters data.

The group said on Monday it was seeking regulatory approval in Europe and the United States for Roactemra, known as Actemra in the United States, to be used to treat systemic Juvenile Idiopathic Arthritis (sJIA), a form of the disease that can cause fever, rash and sore joints in children.

The drug is mainly targeted at rheumatoid arthritis, but a late-stage study published in June showed it improved the signs and symptoms of sJIA.

There are currently no approved therapies in the EU or the United States for this ailment, which can also cause enlargement of the liver as well as inflammation of the lining of the heart and/or lungs, Roche said in a statement.

This type of arthritis accounts for almost two-thirds of all deaths among children with arthritis and the peak age of onset is between 18 months and two years.

"Global peak sales potential for this additional indication is below 0.5 billion francs, but adds nicely to the commercial potential of Actemra," said Kepler Capital Markets analyst Martin Voegtli.

"We forecast substantial above-consensus peak sales of 4.6 billion ... making Actemra potentially Roche's most important drug launch for this decade," Voegtli said.

Actemra, which Roche is developing with its Japanese subsidiary Chugai (4519.T), won U.S. approval to treat adults with rheumatoid arthritis earlier this year.

Roche stock has lost around a fifth of its value so far this year after disappointments in its drug development plans, while top-selling cancer drug Avastin has also fallen at a number of hurdles, casting uncertainty over its prospects.

The shares were up 0.8 percent at 143.00 Swiss francs by 0907 GMT, slightly outperforming a 0.5 percent rise in the European healthcare index .SXDP. (Editing by Hans Peters and David Holmes)