WASHINGTON: U.S. health regulators approved a new drug made by Swiss drugmaker Roche Holding AG for some patients with late-stage metastatic breast cancer who fail to respond to other therapies.

The U.S. Food and Drug Administration said on Friday it had approved Kadcyla, also known as ado-trastuzumab emtansine, for patients whose cancer cells contain increased amounts of a protein known as HER2.

The drug's label will carry a boxed warning, the most serious possible, of the Kadcyla's potential to cause liver and heart damage or even death. The drug can also cause life-threatening birth defects.

Still, fewer patients in a clinical trial experienced severe side effects than those who received standard therapy.

The approval was based on a study of about 1,000 women who had already been treated with Roche's drug Herceptin and a taxane chemotherapy. Patients who were given Kadcyla survived an average of 30.9 months, compared with 25.1 months for those in the control arm who took Xeloda and GlaxoSmithKline Plc's Tykerb.

The drug will be priced at $9,800 a month, higher than Wall Street analysts had expected but likely acceptable to insurers.

"We don't expect to see significant payer pushback on pricing at launch, given the drug's efficacy and safety," said Simos Simeonidis, an analyst at Cowen and Company, in a research note on Friday.

Kadcyla works by attaching Herceptin, also known as trastuzumab, to a drug called DM1, developed by ImmunoGen Inc , which interferes with cancer cell growth.

"Kadcyla delivers the drug to the cancer site to shrink the tumor, slow disease progression and prolong survival," said Dr. Richard Pazdur, director of the FDA's office of hematology and oncology products.

Other drugs approved for HER2-positive breast cancer include Herceptin, Tykerb, and Perjeta, or pertuzumab, which is also made by Roche and was approved in 2012.

Kadcyla is a member of a class of drugs known as antibody-drug conjugates, or "armed antibodies." They combine an antibody, Herceptin in the case of Kadcyla, with a killer toxin, in this case DM1, and a link that binds them together to deliver a highly potent bomb within the diseased cells.

The drugs seek out specific cells that express proteins associated with the cancer, while leaving other cells alone.

The first conjugate to be approved was Mylotarg which was pulled from the market in 2010 by Pfizer Inc's after a study showed it did not extend survival for patients with myeloid leukemia, a bone marrow cancer.

In 2011, Seattle Genetics won U.S. approval for Adcentris, a conjugate targeting Hodgkin's lymphoma, several types of T-cell lymphoma and other hematologic malignancies.

Kadcyla is the first armed antibody to be approved to treat a solid tumor.

The approval triggers a $10.5 million payment to ImmunoGen and sets the stage for the company to receive royalties of between 3 and 5 percent, depending on sales. The 5 percent level is triggered when sales top $700 million in the United States. The company also receives 5 percent when sales top $700 million elsewhere in the world.

Analysts estimate the drug could generate annual peak sales of $2 billion to $5 billion, assuming it is used earlier in the disease's progression and for longer periods of time.

John Sonnier, an analyst at William Blair & Co, said he believes the Kadcyla approval validates ImmunoGen's technology and will translate into other partnerships and the development of new wholly-owned compounds.

ImmunoGen's chief executive officer, Daniel Junius, said ImmunoGen has nine other compounds using some version of its TAP technology, which stands for targeted antibody payload. Some are being developed with partners and some are wholly owned by ImmunoGen.

The most advanced is a drug for non-Hodgkin's lymphoma being developed with Sanofi. The company also is conducting mid-stage trials of a proprietary drug for small-cell lung cancer.

"We believe this can be a very important tool for oncologists across a wide variety of indications," Junius said.

An analyst at J.P. Morgan, Cory Kasimov, said the approval of Kadcyla by itself is not enough to warrant owning ImmunoGen's shares.

"To justify a premium valuation, ImmunoGen needs to generate meaningful data with one of its other antibody assets, preferably one that is fully owned," he said in a research note.

Breast cancer is the second-leading cause of cancer-related death among women. An estimated 232,340 women will be diagnosed with the disease in 2013, and 39,620 will die from it, according to the National Cancer Institute. About 20 percent of breast cancer patients have increased amounts of the HER2 protein.

The most common side effects in patients treated with Kadcyla were nausea, fatigue, muscle and joint pain, increased liver enzymes, headache and constipation.

Shares of ImmunoGen closed up 1.9 percent at $14.57 on Nasdaq. Roche's shares closed up 1.5 percent.