UPDATE 2-US eyes safety of Novartis' MS drug ahead of panel

* FDA reviewers say data lacking on at-risk patients

* FDA wants advice on if lower doses need more evaluation

* FDA advisers to weigh drug on Thursday

* Analysts see few worries, expect eventual approval

* Shares little changed on NYSE (Revises first sentence, adds details from documents, adds analyst comment, updates share movement)

By Susan Heavey

WASHINGTON, June 8 (Reuters) - U.S. regulators have expressed concern about potential side effects of Novartis AG's (NOVN.VX) (NVS.N) multiple sclerosis pill in patients most at risk for complications, but analysts saw few worries to derail what could be the first pill to treat the degenerative disease.

Food and Drug Administration staff scientists, in documents released on Tuesday, said they "uncovered a number of safety issues" that are a key focus as the agency weighs whether to approve the Swiss drugmaker's medicine, which Novartis aims to sell under the brand Gilenia.

Although the FDA's review cast little doubt on the drug's success in relapsing patients, agency staff said further study was needed not only on such vulnerable patients but also on some of the drug's long-term side effects.

Whether such studies are needed before or after the drug's approval will be part of a public discussion on Thursday as the FDA's outside advisers mull whether to recommend the pill for approval.

Novartis' FDA advisory meeting is key as companies jockey for market share in the crowded MD drug arena.

Gilenia, which Novartis licensed from Mitsubishi Tanabe Pharma Corp (4508.T), aims to be easier to take than injectable rivals while also not causing flu-like symptoms seen with some competing drugs. But clinical trials have linked the drug to skin cancer, heart problems and infections, among other side effects.

The drug aims to be easier to take than injectable rivals from Biogen Idec Inc (BIIB.O), Bayer AG (BAYGn.DE), Merck KGaA (MRCG.DE) and Teva Pharmaceutical Industries Ltd (TEVA.TA) while also not causing flu-like symptoms seen with some of those competitors.

Future rivals include several other experimental pills also under development such as Biogen's BG-12, Sanofi-Aventis SA's (SASY.PA) teriflunomide, Teva's laquinimod and Mylinax by Germany's Merck.

Merck KGaA earlier on Tuesday said it had resubmitted its bid to sell its MS pill, cladribine, to the FDA after being rebuffed in November. [nLDE62O0CG]

Deutsche Bank analysts said although the FDA's review of Novartis' Gilenia "reads as a plethora of unpleasant side effects, most are discussed" as issues to watch with post-approval monitoring plan.

"We continue to believe that Gilenia will get the panel's 'green light' on Thursday" as well as eventual FDA approval, they wrote in a research note.

JP Morgan analysts, who also anticipate Gilenia's approval, said the drug will likely dent rival Biogen's MS franchise. A final FDA approval decision is expected by Sept. 21.

Ahead of Thursday's meeting, however, FDA officials said they planned to ask their panel outside of outside experts to weigh the side effects of Novartis' pill as well as how to handle dosing.

The FDA will also ask the committee whether the effect of lower doses of the drug should be evaluated prior to the agency's approval decision. The company is seeking to sell a 0.5 milligram pill but had also studied a stronger version.

If approved, the drug would also need a risk management plan, FDA staff said.

In a separate document released on Tuesday, Novartis said considering all of Gilenia's data "in the context of the current MS therapeutic landscape" showed its "novel" drug had a favorable risk-benefit profile.

Novartis shares were flat on the New York Stock Exchange on Tuesday afternoon after closing down nearly 0.9 percent in Swiss trading.

FDA posted the agency's review on its website at link.reuters.com/heh88k (Reporting by Susan Heavey; editing by Derek Caney and Matthew Lewis)