UPDATE 2-Glaxo, Merck vaccines OK despite pig virus-U.S. FDA

* FDA says safe to use Glaxo's Rotarix, Merck's Rotateq

* Strains of pig virus had been found in both (Adds Glaxo comment, closing share prices)

WASHINGTON May 14 (Reuters) - Rotavirus vaccines made by GlaxoSmithKline Plc (GSK.L) and Merck & Co Inc (MRK.N) are safe to use despite being contaminated with a pig virus, U.S. health regulators ruled on Friday.

The Food and Drug administration said in a statement that it was safe for doctors to resume giving infants and children Glaxo's Rotarix and using Merck's Rotateq.

The products target rotavirus, which can cause fatal diarrhea. DNA from porcine circovirus (PCV) had been found in both vaccines.

The FDA said the vaccines were important in preventing hospitalizations and death, and that there was no evidence the contamination was harming humans.

On May 7, an FDA advisory panel recommended continued use of the vaccines and said their benefits outweighed any potential risk.

Barbara Howe, head of Glaxo's North American Vaccine Development, said in a statement the company would continue to work with the FDA and other regulators "on next steps."

In March, the FDA advised against using Rotarix after PCV-1 was found in the vaccine. Merck then tested its vaccine and found PCV-1 and PCV-2, a related virus.

PCV-2 is believed to cause a wasting syndrome in young piglets, marked by diarrhea and an inability to gain weight, but neither it nor PCV-1 are known to harm humans.

Tests found DNA from the virus in master cells used to make Glaxo's product.

Glaxo officials have said the DNA may have come from a pig-derived enzyme called trypsin used early in development of the vaccine.

Glaxo has said there is no manufacturing or safety issue with its vaccine, and Merck has said its product is safe.

Sales of Merck's vaccine were $522 million in 2009, $468 million of which were in the United States. Glaxo's rotavirus vaccine sales in 2009 were $440 million, including $118 million in the United States.

Worldwide, rotavirus kills more than 500,000 infants annually. Deaths are rare in the United States, but severe illness that requires hospitalization is possible. (Reporting by Susan Heavey; Editing by Steve Orlofsky)