UPDATE 2-Novartis' MS pill wins U.S. advisers' support

* FDA panel votes to recommend approval

* Panel says monitoring, more data needed

* FDA will weigh vote, action expected by September

* Shares close up more than 3 percent (Adds details from panel meeting, FDA comments)

By Susan Heavey

SILVER SPRING, Md., June 10 (Reuters) - Novartis AG's (NOVN.VX) (NVS.N) experimental multiple sclerosis pill moved one step closer to winning U.S. approval on Thursday when a Food and Drug Administration advisory panel backed the drug to help reduce and delay patients' symptoms.

While there is no cure for the degenerative disease, the FDA's outside advisers said that despite some concerns over potential risks, the drug worked well enough to be considered an initial treatment option for all MS patients, although more data is still needed, especially on side effects.

"This should be available to patients, but they should understand there are unknowns," said panelist Judith Feinberg, a medical professor at the University of Cincinnati.

The FDA will weigh the panel's recommendation as it makes its approval decision, expected by September. If approved, Novartis' Gilenia could be the first pill to treat U.S. patients, whose options now are limited to more invasive, injectable medications.

Novartis told the panel its pill is easier to take than injectable medicines already on the market and avoids flu-like symptoms seen with some rivals. It licensed the drug, also known as fingolimod, from Mitsubishi Tanabe Pharma Corp (4508.T).

Biogen Idec Inc (BIIB.O), Bayer AG (BAYGn.DE), Merck KGaA (MRCG.DE) and Teva Pharmaceutical Industries Ltd (TEVA.TA) (TEVA.O) currently market injectable drugs. Not all patients can tolerate them, Novartis said.

The panel's backing is the next step in the race to develop easier alternative treatments for MS symptoms.

Earlier this week Germany's Merck resubmitted its bid to the FDA in hopes of selling its MS pill, cladribine, after a delay last year. [ID:nLDE62O0CG]. Other future rivals include experimental pills such as Biogen's BG-12, Sanofi-Aventis SA's (SASY.PA) (SNY.N) teriflunomide and Teva's laquinimod.

After the meeting, several analysts said the panel's recommendation was a clear shift that could threaten injectable medications such as Biogen's Tysabri, a controversial option with its own side effect issues.

"Neurologists clearly want an oral option for their MS patients," Joshua Schimmer of Leerink Swann Research said in a research note.

Wall Street has predicted that Novartis' Gilenia could be a potential blockbuster product for the Swiss drugmaker.

Forecasts, on average, point to sales of $987 million by 2014, according to Thomson Reuters data, although some analysts expect even bigger sales. Analysts at the Jefferies brokerage expect the drug to bring in $1.6 billion by 2014, while Nomura forecasts $2.1 billion in sales by 2014.

FDA staff had expressed some concern about side effects that arose in Novartis' clinical trials, including heart problems, fluid in the eye and a decrease in lung function.

But FDA's advisers said benefits of the novel treatment outweighed the risks as long as more studies are done.

They also expressed concern about the potential for complications if the drug were used in a wider population after approval, noting that diabetics and other high-risk patients were excluded from Novartis' trials.

Robert Temple, head of the FDA division that reviews neurological drugs, said the FDA would order additional data on such patients. "The excluded groups will have to be studied in some way. There's no question about that," he told the panel.

Novartis said it plans to continue to study the drug's safety with a 5,000-patient, five-year study, although panelists said their planned study was not enough.

The panelists' backing comes with other caveats, including a recommendation that patients be monitored for heart problems after they take their first dose. They also said routine exams would not be enough to monitor for other side effects, such as vision problems or declining lung function.

They also said FDA should require Novartis to study a lower dose than the 0.5 milligram pill the company wants approved to see whether it would be as effective but possibly less risky.

Shares of Novartis closed up 3.3 percent at $47.45 on the New York Stock Exchange on Thursday. (Reporting by Susan Heavey; Editing by Bernard Orr and Steve Orlofsky)