LOS ANGELES (Reuters) - The U.S. Food and Drug Administration has expanded the use of Genentech Inc.'s breast cancer drug Herceptin to include women with early stage cancer who have undergone surgery, the biotechnology company said on Thursday.

Herceptin has been on the market since 1998 as a treatment for the 25 percent to 30 percent of breast cancer patients who have tumors that generate a protein called HER-2 and whose cancer has spread beyond the breast.

These tumors tend to grow faster and are more likely to recur than tumors that do not carry the protein.

Since the announcement in 2005 of positive trial results for Herceptin in combination with chemotherapy in earlier-stage cancer, physicians have already been using the drug in these patients.

The studies have shown that 87 percent of women treated with Herceptin and chemo were disease-free after three-and-a-half years, compared with 71 percent of women treated with chemo alone, the company said.

"This is the largest improvement in outcome for any group of women with breast cancer in 25 years," Dr. Edward Romond, professor of hematology/oncology at the University of Kentucky, said in a statement.

Herceptin, given by injection, is an antibody-based drug designed to target tumor cells and spare normal cells, unlike chemotherapy which is toxic throughout the body.

The most serious side effect of Herceptin is congestive heart failure, which investigators found occurs 3 to 4 percent more often in patients treated with Herceptin than in those treated only with chemotherapy.

In the first nine months of this year, U.S. sales of Herceptin rose 84 percent from the same 2005 period to total $912 million.

Eric Schmidt, an analyst at Cowen & Co., said the FDA nod is "certainly a nice formality for Genentech and patients, but for all practical purposes Herceptin is already the standard of care for this indication."

He said the regulatory approval "will have very little commercial impact as the medical establishment was already ahead of the FDA on this one by about 12 months."

In the United States there are an estimated 212,920 new cases of breast cancer and about 40,970 related deaths each year, according to the FDA.

The FDA was initially expected to decide on the new indication for Herceptin in August but the review was extended after the agency requested additional information.

South San Francisco, California-based Genentech, the world's second largest biotechnology company, is majority owned by Swiss drug maker Roche Holding AG.

(Additional reporting by Bill Berkrot in New York)