UPDATE 1-Tarceva helps keep lung cancer from worsening-study

* 41 pct improvement in progression-free survival

* OSI CEO sees $500 mln opportunity with new approval

* 10-fold benefit seen in EGFR mutation patients

By Bill Berkrot

NEW YORK, May 14 (Reuters) - Lung cancer drug Tarceva was significantly better than a placebo in keeping the disease from worsening in patients whose cancer had not progressed after treatment with platinum-based chemotherapy, according to a late-stage clinical trial.

Tarceva, which is co-marketed by U.S. biotechnology company OSI Pharmaceuticals Inc (OSIP.O) and Swiss drugmaker Roche Holding AG (ROG.VX), is approved for advanced lung cancer after at least one prior therapy has failed.

OSI Chief Executive Colin Goddard said approval as a so- called maintenance therapy following successful chemotherapy could add $500 million to annual U.S. Tarceva revenue, more than doubling sales of the oral biotech medicine.

Tarceva is expected to compete with Eli Lilly and Co's (LLY.N) Alimta in patients following successful chemotherapy. It could be approved for that use in the United States by mid-January of 2010, OSI said.

In the 889-patient Saturn trial, which will be presented at the American Society of Clinical Oncology (ASCO) meeting in Orlando later this month, Tarceva had a 41 percent advantage over placebo on the time patients live without their disease worsening, or progression-free survival. Results of the Roche- sponsored study were deemed highly statistically significant.