* Panel: Urinary problems with Potiga can be managed
* FDA's final approval decision due by Aug 30
* Glaxo, Valeant shares down amid broad market drop (Adds Valeant comment, updates shares)
SILVER SPRING, Md., Aug 11 (Reuters) - An epilepsy drug from GlaxoSmithKline (GSK.L) and Valeant Pharmaceuticals (VRX.N) moved closer to the U.S. market on Wednesday as U.S. advisers said urinary side effects were manageable.
The drug, Potiga, is aimed at controlling seizures when other medicines fail. Analysts have forecast peak annual sales ranging from $200 million to $800 million.
Shares of Glaxo and Valeant, which is set to be acquired by Biovail this year BVF.N, fell amid a broad market downturn.
The Food and Drug Administration advisory panel voted 11-0 with two abstentions that monitoring for urinary problems would help minimize side effects.
In company studies, 5 percent of Potiga patients reported trouble with urination or related issues, higher than the 3 percent with a placebo. Symptoms included an inability to urinate or to fully empty the bladder.
Nearly all cases were reversible, the companies said. Panel members said doctors and patients should be told to watch closely for symptoms and get treatment early to prevent more serious harm to the bladder or kidneys.
"Vigilance will be crucial" for both patients and doctors, said Dr. G. Caleb Alexander, assistant professor of general medicine at the University of Chicago.
The panel also voted 13-0 that Potiga was effective for use with other epilepsy drugs in patients who still have seizures with current therapy. The panel was not asked to vote to recommend approval.
The agency usually follows panel recommendations when deciding whether to clear new drugs. A final decision is due by Aug. 30.
About 3 million Americans have epilepsy, a brain disorder that causes seizures. Seizures can be controlled with medication, but an estimated 30 percent of patients do not find adequate relief with current drugs.
Potiga works differently than approved epilepsy drugs by targeting potassium channels in the brain. Other epilepsy medicines work on different channels linked to seizures.
Potiga's unique action also may affect bladder contraction and explain the urinary problems, FDA reviewers said.
In the company studies, Potiga cut partial-onset seizures by 23 percent to 44 percent depending on the dose. The reduction for placebo patients was 13 percent to 18 percent. Partial-onset seizures are the most common type and start in a part of the brain rather than the entire brain.
Valeant will receive up to 50 percent of U.S. sales under a development deal with Glaxo.
Valeant had 2009 revenues of more than $830 million, while Biovail's revenues topped $820 million in 2009. The combined company will have a diverse range of products with a focus on neurology and dermatology.
"We think (Potiga) will be a good growth driver in neurology," Morningstar analyst Meera Venu said on Wednesday. She has forecast $600 million in annual sales for the drug by 2019.
Potiga would be a relatively small product for British drug giant Glaxo, which reported 2009 sales of $44 billion.
Patients must take Potiga three times a day. The drug's generic name is ezogabine in the United States and Canada. The generic name for other countries is retigabine.
Glaxo said it was encouraged by the panel decision.
"For appropriate patients, we believe ezogabine could offer an important adjunctive treatment option for partial-onset seizures that are not well-controlled," Dr. Atul Pande, a Glaxo senior vice president, said in a statement.
Susan Hall, Valeant's head of neurology research and development, said "there was a significant need for additional anti-epileptic drugs" and the company was pleased with the outcome of the panel.
Valeant shares fell 1.3 percent to close $57.87, while Glaxo shares fell 2.5 percent to $36.46, both on the New York Stock Exchange. Biovail slipped 1.9 percent to $22.62, also on the NYSE. (Reporting by Lisa Richwine; editing by Carol Bishopric, Leslie Gevirtz)