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UPDATE 1-Seattle Genetics' Hodgkin's lymphoma drug wins U.S. approval

(Adds analyst comment, details)

March 20 (Reuters) - U.S. regulators on Tuesday approved Seattle Genetics Inc's Adcetris as part of a chemotherapy cocktail to treat advanced Hodgkin's lymphoma in newly diagnosed patients, opening up a key market for the drugmaker.

The widely expected approval makes Adcetris the first treatment for the indication in more than 40 years, and Seattle Genetics expects the drug to have $1 billion in sales within the next few years.

Importantly, the Adcetris cocktail substitutes a chemotherapy drug in the current standard-of-care combination that has been tied to potentially fatal lung toxicity.

"There's a safety benefit as well as an efficacy benefit," RBC Capital Markets analyst Kennen MacKay said ahead of the regulatory decision.

Adcetris was approved for use in patients with Stage III or IV classical Hodgkin's lymphoma, a type of blood cancer.

About 8,500 cases of the disease will be diagnosed in the United States this year, according to the American Cancer Society.

RBC's MacKay expects Adcetris to bring in $1.45 billion in peak sales in 2030, assuming some two-thirds of patients use the drug and its price keeps increasing each year.

The drug already has approval in the U.S. to treat other forms of blood cancer as well as patients with Hodgkin's lymphoma who have already received a stem cell transplant or two chemotherapy treatments. (Reporting by Tamara Mathias and Manas Mishra in Bengaluru; Editing by Anil D'Silva and Sai Sachin Ravikumar)