The infused medicine, to be taken in combination with standard chemotherapy, will compete with Roche Holding AG's Avastin and Bristol-Myers Squibb Co's Erbitux.

Industry analysts say they expect Zaltrap to win peak annual sales of perhaps $300 million to $400 million, well below the widely used older treatments.

Patients taking Zaltrap in a large clinical trial, in combination with a standard chemotherapy combination regimen called FOLFIRI, lived an average of 13.5 months, compared with 12 months for those receiving only FOLFIRI. Also, patients receiving Zaltrap went an average 6.9 months before their symptoms got worse, compared with 4.7 months for those on chemotherapy alone.

Zaltrap, like Avastin but through a different approach, blocks a protein called VEGF that tumors employ to create blood vessels that provide the nutrients. Erbitux blocks receptors to a different protein, called epidermal growth factor.

"This is a very solid new opportunity" for Regeneron," said RW Baird analyst Christopher Raymond, who predicted the medicine would garner sales of $205 million in 2015. But Raymond said most proceeds in the next few years will likely go to partner Sanofi, which is entitled not only to a half share of profits from Zaltrap but also to reimbursement from Regeneron for half the drug's development costs funded by Sanofi.

Regeneron is far better known for Eylea, a treatment approved late last year for treating macular degeneration, the leading cause of blindness in the elderly. The eye medicine has the same active ingredient as Zaltrap, called aflibercept, and is already achieving blockbuster sales and stealing market share from Roche's Lucentis treatment for the eye condition. Lucentis is derived from Avastin.

"While near-term we expect (Regeneron's) stock will continue to trade primarily on the Eylea launch which remains impressive, we view Zaltrap's approval as a nice complement to what is rapidly becoming one of biotech's best commercial stories," Raymond said.

The company, based in Tarrytown, New York, has a promising array of other drugs in development with Sanofi to treat cancer, cholesterol and inflammatory diseases.

Regeneron shares, which rose 1.1 percent to $137.95 on Friday, have soared 250 percent since the FDA approved Eylea on November 18.

Regeneron research chief George Yancopoulos said anti-angiogenesis drugs, like Zaltrap and Avastin, have not been able to slow down tumor growth nearly as well as researchers had originally hoped.

"We thought if you could choke off the blood supply you could, if not kill the tumor, keep it from growing. But (targeting) VEGF may not be enough, we may have to combine different types of anti-angiogenesis drugs."

Toward that end, Yancopoulos said Regeneron is testing two such medicines, which instead block proteins DLL4 and angiopoietin 2, that could someday be used in combination with anti-VEGF therapies to more fully cut off blood supply to tumors.

Zaltrap, like Avastin, was shown to be ineffective in treating prostate cancer. It also failed in other studies to improve outcomes in patients with lung and pancreatic cancers.

Colorectal cancer is the fourth most commonly diagnosed cancer in the United States, and the fourth leading cause of cancer death, the FDA said. Almost 145,000 Americans are expected to be diagnosed with the disease this year, and almost 52,000 will die from the cancer, according to the National Institutes of Health.

(Reporting by Ransdell Pierson in New York and David Morgan in Washington; Editing by Lisa Von Ahn and Marguerita Choy)

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