* FDA says use of Merida not worth the risks
* Drugmaker still says drug works in certain patients
* Move could impact rival obesity drugs
* Shares close up less than one percent (Adds analyst comment, consumer advocate reaction, updates shares to close)
By Susan Heavey
WASHINGTON, Oct 8 (Reuters) - Abbott Laboratories' (ABT.N) has pulled its controversial diet drug, Meridia, off the U.S. market after regulators said it was too dangerous, making it the latest casualty in the troubled obesity drug sector.
Although Abbott argued that its drug was safe, Food and Drug Administration officials said on Friday available data highlighting the Meridia's heart risks raised serious questions about its use.
"Meridia's continued availability is not justified when you compare the very modest weight loss that people achieve on this drug to their risk of heart attack or stroke," John Jenkins, director of FDA's Office of New Drugs, said in a statement.
Abbott, in a statement, said it would comply with the FDA's request to withdraw Meridia even though it still thinks the drug is safe. It also said it was discussing the fate of Meridia in other countries and expects those talks to end in the coming days. European sales were halted in January.
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Meridia has been under fire over its increased risk of heart attack and strokes in certain patients, and last month the FDA's outside advisers urged the agency to take some kind of tougher action against Meridia, first approved in 1997.
While Meridia's removal does little to dent Abbott's bottom line, it highlights the FDA's concerns about safety issues in obesity drugs and could affect the fate of potential rivals.
It also shows the difficulty in treating overweight or obese patients through medication in a country where two out of every three people are too heavy. While weight can be managed through diet and exercise, drugmakers have struggled for more than a decade to bring about a successful drug to shed pounds.
Arena Pharmaceuticals Inc (ARNA.O), Orexigen Therapeutics Inc (OREX.O) and Vivus Inc (VVUS.O) are all seeking approval for weight loss drugs they hope will be safer.
Herman Saftlas, a healthcare analyst for Standard & Poor's Equity Research, said,"Meridia was relatively insignificant," given Abbott's size. The drugmaker saw net sales of $30.8 billion last year but expected just $30 million from U.S. sales of Meridia in 2010.
Shares of Abbott closed up 0.4 percent at $52.80 on the New York Stock Exchange. Arena shares ended up 1.8 percent and shares of Vivus were near flat, while shares of Orexigen were up 1.3 percent, all on the Nasdaq.
Consumer groups have been fighting for Meridia's removal for years and welcomed the FDA's decision even as they said it took took long and put patients at risk.
Sidney Wolfe, director for Public Citizen's Health Research Group, said the drug's ban comes "dangerously too late for all of the victims of its unacceptable risks."
The FDA estimates about 100,000 people in the United States use Meridia. But, Wolfe said more than 160,000 prescriptions for the have been filled since January and more than than 3 million prescriptions have been filled since 2002.
Abbott said patients should stop using Meridia, also known as sibutramine, and ask their doctor about other medications.
But such alternatives have their own problems.
Orlistat, sold as Roche Holding AG's (ROG.VX) prescription drug Xenical or over-the-counter as GlaxoSmithKline Plc (GSK.L) lower-dose version Alli, can cause serious liver problems, uncontrolled bowel movements and gas.
Two other prescription drugs, phentermine and diethylpropion, are also available for more short-term weight-loss use and are sold generically.
"We actually have very few options," Dr. Mitchell Roslin, chief of obesity surgery at Lenox Hill Hospital in New York, said, citing lifestyle changes through diet and exercise as well as surgery as other possibilities.
Safety issues are also a concern for pending rivals.
In September, another FDA advisory panel rejected Arena's lorcaserin in the face of potential cancer risks and causing investors to flee the stock.
FDA advisers also rejected Vivus' candidate, Qnexa, back in July over concern about depression, memory loss and potential birth defects. Orexigen faces FDA's advisers in December over its drug, Contrave.
No final FDA decision has been made for the three drugs.
"We are committed to working toward approval of new products so long as they are safe and effective," Jenkins told reporters in a conference call, adding that obesity carries its own risks of diabetes, heart disease and other problems.
Dr. Mark Molitch of Northwestern University Feinberg School of Medicine in Chicago, had voted against Meridia's approval in 1997 but said doctors are still desperately seaching for a tool to fight the U.S. bulge.
"Clearly, lifestyle changes are what is needed, but it doesn't work," he said. "We are all getting fatter in this country and around the world." (Reporting by Susan Heavey; Additional reporting by Julie Steenhuysen in Chicago; Editing by Derek Caney, Leslie Gevirtz)