* Treats a common cause of age-related blindness
* FDA expected to make final decision by Aug. 20
* Avastin could still have price advantage
* Regeneron shares fall 4.8 percent
* Analyst says favorable review was already priced in (Updates shares to close, edits throughout)
COLLEGE PARK, Md., June 17 (Reuters) - A new eye medicine from Regeneron Pharmaceuticals Inc (REGN.O) and Bayer AG (BAYGn.DE) is safe and effective for treating a common cause of vision loss, a panel of U.S. experts said on Friday.
The Food and Drug Administration advisory panel voted unanimously to recommend Eylea as a treatment for the most serious form of macular degeneration that affects at least 1.5 million Americans.
The advisers also said the injected drug could be given once every two months, giving it an edge over the typical monthly dosing of its chief competitor, Lucentis, from Roche Holding AG (ROG.VX).
"The data is very compelling for equivalence (with Lucentis)," said Dr. Lynn Gordon, a panel member and associate professor at the University of California in Los Angeles.
The FDA usually follows the advice of its advisory panels and is expected to rule on Eylea by Aug. 20.
Regeneron shares, halted much of Friday pending the advisory panel decision, lost 4.8 percent on Nasdaq to close at $54.02.
Jason Kantor of RBC Capital Markets said Regeneron's share price had reflected an expected favorable opinion, so the decline was likely a case of "selling on the news."
Kantor predicted the drug would fare well, but said the main reason to own Regeneron is its array of antibodies being developed for other diseases in partnership with French drugmaker Sanofi SA (SASY.PA).
Age-related macular degeneration (AMD) is the leading cause of blindness in the elderly, with the wet form the most serious. Some 11 million Americans have signs of AMD.
Piper Jaffray analyst Edward Tenthoff sees Regeneron taking 25 percent of the U.S. market by 2016, with annual sales of $1.2 billion.
CHEAPER CANCER DRUG
Eylea and Lucentis could face competition from Roche's cancer drug Avastin, a much less expensive medicine that is often used by doctors to treat macular degeneration even though it has not been approved by the FDA for that purpose.
The amount of Avastin needed for an eye injection costs only around $50, against a U.S. price of $1,950 for Lucentis and probably a similar price for Eylea. All three drugs work in a similar way.
An April study showed Avastin was as effective as Lucentis, though it had more side effects. [ID:nN28270369]
Eylea's advantage over both rivals may be its two-month dosing.
In clinical trials, Regeneron showed that Eylea injected into the eye every two months was as effective as monthly doses of Lucentis. The committee said monthly monitoring of patients receiving Eylea was not necessary.
"I think many of my patients are looking for something they can take less often, and that's the exciting possibility of Eylea," said Dr. Jeffrey Heier, a clinical instructor of ophthalmology at Harvard Medical School who spoke on behalf of Regeneron.
Regeneron has full marketing rights to the drug in the United States and would share overseas profits equally with Germany's Bayer if Eylea wins regulatory approval in other countries.
"It's a particularly proud day for us because few companies can go from the discovery of the molecule and take it to this point," said Regeneron Chief Executive Officer Leonard Schleifer.
"We started out as good scientists and hopefully we can become good manufacturers too." (Additional reporting by Ransdell Pierson and Lisa Richwine; Editing by Gerald E. McCormick and Tim Dobbyn)