UPDATE 1-Roche falls 4 pct after US panel rejects Avastin

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ZURICH, Dec 6 (Reuters) - Roche Holding AG (ROG.VX) stock fell more than 4 percent early on Thursday after a U.S. regulatory panel recommended its key drug Avastin should not be approved for advanced breast cancer.

Roche stock fell to 202.80 Swiss francs at 0822 GMT. A Food and Drug Administration panel voted 5-4 on Wednesday that data did not establish a favourable balance of risks and benefits for Avastin.

Deutsche Bank and Sal Oppenheim both cut their price targets for Roche after the news, traders said.

"The news is really hitting Roche sentiment," said one trader. "There might be even more pressure from the U.S. in the afternoon."

The Food and Drug Administration will consider the panel's recommendation in deciding whether to approve Avastin for breast cancer. The FDA does not have to follow the panel's advice but usually does.

But Morgan Stanley analysts still saw a more than 50 percent probability the FDA will approve the drug.

"The general tenor of the panel, as well as the composition of the votes, leads us to believe that the FDA has leeway to make any decision that it wants," Morgan Stanley said in a note.

Avastin, which works by choking off the blood supply that tumours need to grow, has been approved in Europe for treating breast cancer.

The drug is marketed in the United States by Genentech Inc DNA.N, which is majority owned by Roche. Genentech shares fell 9 percent on Wednesday after the panel announced its opinion.

(Reporting by Sam Cage; Additional reporting by Rupert Pretterklieber; editing by Sue Thomas)

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