Monday July 15, 3:23 AM EDT By Michael Shields

ZURICH, July 15 (Reuters) - Roche Holding AG (ROCZg) got a boost on Monday when U.S. regulators granted fast-track review to its hepatitis C drug Pegasys in combination with standard therapy, the Swiss group's major new drug launch this year.

The company said it expected to get final approval for Pegasys in the key U.S. market by the fourth quarter.

Roche is relying on Pegasys to help fuel top-line growth as it accelerates out of a stretch of product setbacks and weak sales. Analysts at UBS Warburg believe Pegasys could achieve sales of $1 billion by 2006.

The U.S. Food and Drug Administration was still reviewing data for Pegasys used alone, but a company spokesman said approval for this was also expected by year's end.

The accelerated FDA review focuses on Pegasys in combination with Copegus, Roche's own brand of ribavirin. The European Union granted marketing approval in June for Pegasys as both a monotherapy and in combination with ribavirin, which is a standard treatment for hepatitis C, a viral infection that attacks the liver.

More than 170 million people have contracted hepatitis C, making it more common than the HIV virus that causes AIDS.

The move means Roche is probably on track to meet forecasts of boosting flagship drug sales by mid-single-digit percentage rates in 2002 and then reach or beat the sector average in 2003.

"Everybody has seen in their (sales forecast) models that they would get priority review, that Pegasys will be on the market by the end of this year and will contribute to sales growth in 2003," said Lombard Odier Darier Hentsch analyst Birgit Kulhoff.

Roche certificates, which have eased 2.7 percent so far this year but outperformed the DJ Stoxx healthcare index (SXDP) by 25 percent, were up 1.3 percent at 116.75 francs in early trade in a flat Swiss market.

FDA approval of Pegasys has been delayed because Roche had to provide "bio-equivalence" data to prove that material from new production capacity was identical to earlier batches.

Even if Pegasys went on sale in the United States in the fourth quarter, it would be around a year behind Schering-Plough Corp's (SGP) rival PEG-Rebetron product.

But Roche said its product could still be a hit.

"The FDA's priority review designation for this application is an acknowledgement that Pegasys in combination with our Copegus provides new and important benefits to patients over the currently available treatments in the United States," said William Burns, head of Roche's drugs division.

Roche has said the actual rate of its overall drug sales growth this year depends on the impact of lost U.S. patent protection for its blockbuster acne drug Accutane, which went off patent in February but has not seen generic competition yet.

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