* U.S. plans to remove breast cancer use for Avastin
* European agency urges restricted use in breast cancer
* Roche appealing U.S. decision
* $1 billion in sales at risk
* Roche shares end down 0.9 percent (Adds Republican plans for hearings)
WASHINGTON/LONDON, Dec 16 (Reuters) - Avastin, the world's best-selling cancer medicine, should no longer be approved for breast cancer, U.S. officials said on Thursday in an unusual move that could shave $1 billion from manufacturer Roche's (ROG.VX) annual sales.
European authorities, meanwhile, recommended restricting the drug in breast cancer so it is given only with one type of chemotherapy.
Avastin has been approved for fighting breast and other cancers. But the drug failed to extend survival in four trials of patients with breast cancer.
"Given the number of serious and life-threatening side effects, the FDA does not believe there is a favorable risk-to-benefit ratio," Dr. Richard Pazdur, the U.S. Food and Drug Administration's head of cancer drugs, told reporters.
Side effects include holes in the stomach and intestines, severe bleeding and blood clots.
Roche said rates of those problems were low, at less than 4 percent in breast cancer trials. The company also said Avastin provided a meaningful benefit for patients with few choices for fighting advanced cancer.
The company said it would request a hearing to contest the U.S. decision.
If the FDA grants a hearing, there is no set timetable and until the procedure is concluded, Avastin will keep the FDA approval for breast cancer.
The drug, with a generic name of bevacizumab, will remain available for treating colon, lung, brain and kidney cancers.
But industry analysts estimate Swiss drugmaker Roche could lose $1 billion of the drug's $6 billion in annual sales from the expected slump in breast cancer use. The company's total 2009 sales hit 49.1 billion Swiss francs ($50 billion).
Roche shares ended 0.9 percent lower at 140 francs following the news.
"We expected a negative outcome in the United States. In Europe, we were more hopeful that the European Medicines Agency would maintain a broader label for Avastin in breast cancer," Helvea analyst Karl-Heinz Koch said.
"We see sales halving to around 450 million Swiss francs ($464 million) in Europe. We now need to adjust our share price target to reflect the EU outcome."
In Europe, the drug is still recommended as a treatment for advanced breast cancer with paclitaxel -- the type of chemotherapy Roche said was most frequently used in the region -- but not with docetaxel or capecitabine.
Recommendations from the EU drugs watchdog are normally endorsed by the European Commission.
Avastin was once expected to become the world's biggest-selling drug by 2014, but its prospects have faded after doubts over its benefits in breast cancer and after it failed in clinical trials for prostate and stomach cancer.
Doctors could still prescribe the drug for breast cancer patients in the future, but U.S. insurance companies are unlikely to cover it without FDA approval. European healthcare systems may also be more reluctant to pay for it.
"Physicians should use medical judgment" to decide whether to keep prescribing Avastin for breast cancer, said Dr. Janet Woodcock, the FDA drugs chief.
Medicare, the U.S. health insurance for the elderly and disabled, will continue covering Avastin for breast cancer during Roche's appeal, Woodcock said. Insurers Aetna (AET.N), Wellpoint WLP.N and UnitedHealth Group (UNH.N) said they had not changed their coverage.
About 207,000 cases of advanced breast cancer are expected to be diagnosed in 2010, according to American Cancer Society estimates.
The FDA approved Avastin under a shorter process designed to bring new therapies to patients quickly based on preliminary findings. The agency can revoke the approval if later studies fail to confirm a benefit, though that rarely happens.
The Avastin case drew complaints from U.S. lawmakers and split doctors and patients, with some arguing it helps some women and should remain approved.
Critics have accused the FDA, which is not allowed to consider cost, of limiting access over the drug's price. Avastin costs about $8,000 a month in the United States, although Roche caps the annual price at $57,000 per patient.
U.S. Representative Fred Upton and three fellow Republicans said they were "gravely concerned that the FDA is putting economics ahead of proper courses of treatment." They said they plan hearings to "hold the FDA accountable" and "protect access ... for the thousands of women who rely on this drug." Upton will chair the House Energy and Commerce Committee next year.
The FDA said it did not consider cost in the decision.
Britain already refuses to pay for Avastin for advanced breast cancer and the country's healthcare cost agency last week gave the drug a poor assessment. [ID:nLDE6B71VI]
FDA officials said they were open to reviewing new research that could show the drug worked in certain women.
Avastin won U.S. clearance as a first-choice breast cancer treatment in 2008 after an initial study showed the drug stalled cancer growth by 5.5 months. Later research found only a one to three-month delay in breast cancer progression with no improvement in survival or symptoms.
More than a dozen drugs are approved for treating advanced breast cancer, including Roche's Herceptin and Eli Lilly's (LLY.N) Gemzar. (Additional reporting by Katie Reid in Zurich and Bill Berkrot and Ransdell Pierson in New York; Editing by Xavier Briand and Todd Eastham)