UPDATE 2-US advisers reject AstraZeneca infant lung drug

* FDA advisory panel votes 14-3 against drug

* Panel expresses concern about side effects, lack of data

* Drug not seen major product for AstraZeneca, shares rise

* Company rejects allegations by ex-MedImmune worker

* FDA decision expected by June 24 (Adds panelist, FDA comment, details on drug, byline)

By Susan Heavey

SILVER SPRING, Md., June 2 (Reuters) - A U.S. medical advisory panel rejected AstraZeneca PLC's (AZN.L) experimental infant lung drug motavizumab, citing concerns about potentially serious side effects and the need for more data.

In a 14-3 vote, the U.S. Food and Drug Administration's panel of outside experts said on Wednesday they wanted further clinical trials looking at children who are sicker, to reflect the potential real-world use of the drug.

AstraZeneca's MedImmune unit has developed motavizumab to prevent serious respiratory syncytial virus (RSV) in high-risk infants. RSV is a serious condition affecting around 125,000 infants in the United States each year.

The FDA advisers said they were concerned that data showed the new drug only as effective in reducing RSV hospitalizations as AstraZeneca's current therapy Synagis, or palivizumab, but carried a greater chance of serious skin reactions.

"This drug is possibly better than what we have now. We don't know that. I feel like it's effective. I don't know that it's better," Dr. Susan Ellenberg, a biostatistician at the University of Pennsylvania's School of Medicine. "But what we do know is that it has a risk that the other one doesn't have."

MedImmune officials told the panel the clinical data showed the new drug was more effective in reducing hospitalizations from RSV than Synagis.

But FDA staff reviewers took issue with the company's assessment of effectiveness, and also said the data suggested hypersensitivity reactions were three to six times more common with the new drug than Synagis.

The three panelists who backed the drug said the risks seemed manageable and that it would offer doctors more choice.

But most panelists felt there was just not enough data to weigh the benefits against potential severe reactions.

"There was a pretty consistent call for needing more information," said panel chairman Dr. Craig Hendrix, a clinical pharmacologist at Johns Hopkins University School of Medicine.

Given the small number of children affected by RSV, motavizumab is not a major product for AstraZeneca. Analysts have already expressed doubt about the commercial potential of the drug, which has already faced delays.

Synagis, the current drug, saw worldwide sales of $1.1 billion in 2009.

Ahead of Wednesday's meeting, industry analysts had estimated sales of $786 million for motavizumab in 2014, according to Thomson Reuters data.

Shares of AstraZeneca closed up 3 percent at $43.59 on Wednesday on the New York Stock Exchange, outperforming the NYSE Arca pharmaceutical index .DRG which rose 2.5 percent. The FDA, which usually follows its panels' advice, is expected to make a final decision on whether to approve motavizumab by June 24.

"We continue to believe motavizumab offers a meaningful clinical benefit to patients at high risk for a very common and serious illness," Dr. Genevieve Losonsky, MedImmune's vice president of clinical development for infectious disease, said in a statement after the panel's vote.

MedImmune also defended itself Wednesday against allegations by a former employee.

Peter Roelvink filed a lawsuit April 26 for what he said was wrongful termination after he expressed concern about discrepancies in motavizumab data, according to the Washington Business Journal.

Dr. Bahija Jallal, senior vice president of MedImmune research and development, told the FDA advisory panel that the company was confident that its data was accurate. FDA officials said they were aware of the lawsuit. (Reporting by Susan Heavey; Editing by Tim Dobbyn)