REFILE-UPDATE 2-"Substantial" toxicity seen with PegIntron use

(Refiling to fix typographical error in headline)

* No evidence of survival benefit - FDA staff

* FDA panel meets Monday to consider peginterferon use

* Company: drug postpones relapse, side effects manageable

* Shares down less than 1 percent
(Adds company comment, details on drug)

WASHINGTON, Oct 1 (Reuters) - Schering-Plough Corp's
SGP.N injectable drug PegIntron carries "substantial
toxicity" and had no effect on overall survival in melanoma
skin cancer patients undergoing surgery, U.S. Food and Drug
Administration staff reviewers said in documents released on
Thursday.

Schering is seeking FDA approval to sell its drug,
PegIntron, for use with surgery in cases where the melanoma has
spread to the lymph nodes and surgery is needed to remove both
the cancer and the surrounding lymph nodes.

PegIntron, also known as peginterferon, is already approved
for liver disease. It is also approved for use in conjunction
with the company's Rebetol for chronic hepatitis C patients
with liver disease.

The FDA released the documents ahead of an advisory
committee meeting on Monday to discuss whether to approve new
uses for the drug. The agency usually takes the advice of its
outside experts but not always.

PegIntron is a type of alpha interferon protein-based drug
that aims to boost the body's immunity and help cells function
normally.

In a separate document, Schering said the drug increased
the time before the cancer reoccurred, with patients who were
only observed experiencing a relapse a median of 25.5 months
compared with 34.8 months with PegIntron.

The only other approved drug for use after surgery for
melanoma is Schering's Intron A, which has the same active
ingredient as PegIntron and has been shown to prevent relapse
but does not give patients a survival advantage, the company
said.

Intron A also requires the drug be given intravenously five
times a week for four weeks, whereas PegIntron can be given by
the patient at home once a week, Schering said.

FDA staff agreed that there was "highly significant"
increase in the length of time before relapse with PegIntron
just as with Intron-A.

"However, there was no effect on overall survival observed
and substantial toxicity occurred with treatment regimen
administered in this study," they concluded.

Shares of Schering were down less than 1 percent at $28.05
in morning trading on the New York Stock Exchange.

The FDA posted the staff memo and the Schering document on
its website here
(Reporting by Susan Heavey and Julie Vorman; Editing by Derek
Caney, Dave Zimmerman)