CORRECTED-UPDATE 1-FDA OKs J&J pre-chemo cancer drug for prostate

(Corrects original approval date to April)

* Drug Zytiga originally approved April 2011

* Well Fargo sees $2.3 bln 2016 sales, 70 pct from pre-chemo

* J&J shares up 0.3 percent

Dec 10 (Reuters) - U.S. health regulators on Monday expanded the approval of Johnson & Johnson's drug Zytiga for advanced prostate cancer to allow its use prior to treatment with chemotherapy.

The widely-expected expanded Food and Drug Administration approval, which came after the company demonstrated that Zytiga could extend survival if used prior to chemotherapy, is likely to significantly boost sales of the new medicine.

Wells Fargo Securities analyst Larry Biegelsen, in a research note earlier this year, forecast peak Zytiga sales of $2.3 billion in 2016, with about 70 percent coming from pre-chemo use.

Zytiga was originally approved in April 2011 for use in combination with the steroid prednisone to treat men whose prostate cancer had progressed following treatment with the chemotherapy drug docetaxel.

The pill, which works by decreasing production of the hormone testosterone that fuels cancer growth, had sales of about $800 million in its first year of availability, capturing some 60 percent of the post-chemotherapy market.

That market share is likely to shrink due to new competition in the post-chemotherapy setting from Xtandi, which is sold by Medivation Inc and Astellas Pharma Inc, analysts said. Xtandi is still undergoing late stage trials in patients who have not yet received chemotherapy treatment and the drug could be two years away from a similar expanded approval.

"Today's approval demonstrates the benefit of further evaluating a drug in an earlier disease setting and provides patients and health care providers the option of using Zytiga earlier in the course of treatment," Richard Pazdur, director of the Office of Oncology Drug Products in the FDA's Center for Drug Evaluation and Research, said in a statement.

In late stage clinical trials of more than 1,000 patients with advanced prostate cancer who had not been treated with chemotherapy, those who received Zytiga on average lived more than five months longer than those who received a placebo.

The American Cancer Society estimated that more than 28,000 U.S. men will die from prostate cancer in 2012, making it the second leading cause of cancer death behind lung cancer.

J&J shares were up 22 cents at $70.67 in afternoon trading on the New York Stock Exchange.

(Reporting by Bill Berkrot and Ransdell Pierson; Editing by Gerald E. McCormick and Nick Zieminski)