UPDATE 1-Pfizer's Sutent approved for rare pancreatic cancer

* Pancreatic NET is third cancer type Sutent approved for

* Drug had Q1 sales of $276 million

* Pancreatic NET afflicts 2-4 people per million

NEW YORK, May 20 (Reuters) - Pfizer Inc's (PFE.N) cancer drug Sutent won U.S. approval to treat a rare form of pancreatic cancer known as pancreatic NET, the world's largest drugmaker said on Friday.

The Food and Drug Administration approved Sutent for use in patients with inoperable locally advanced or metastatic pancreatic neuroendocrine tumors, or NET, which occurs in about two to four people per million annually worldwide.

Sutent, which is already approved to treat advanced kidney cancer and gastrointestinal stromal tumor, or GIST, a type of cancer of the digestive system, had sales of $276 million in the first quarter.

It had previously received approval in Europe and nine other countries for pancreatic NET, which was the type of cancer that afflicted Apple Inc (AAPL.O) Chief Executive Steve Jobs.

An expert FDA advisory panel in April recommended that the agency approve Sutent for the rare cancer based on a pivotal Phase III trial in which it more than doubled progression free survival, or the time it takes for the disease to worsen, compared with a placebo, to 10.4 months versus 5.4 months.

"This approval is welcome news for physicians who have struggled to find a treatment option that shows a substantial clinical benefit in treating advanced pancreatic NET," Dr. Eric Raymond, who led the Phase III study, said in a statement. (Reporting by Bill Berkrot; Editing by Tim Dobbyn)