UPDATE 1-Novartis' MS drug gets approval in EU

(Adds background, details)

ZURICH, May 26 (Reuters) - Swiss drugmaker Novartis (NOVN.VX) said on Monday its Extavia multiple sclerosis drug had been approved in the European Union and repeated that it planned to launch Extavia in the U.S. and Europe in the first half of 2009.

The European Commission approved Extavia for the treatment of early and relapsing forms of multiple sclerosis, Novartis said in a statement.

Extavia is the first in a new portfolio of medicines from Novartis that is planned to include both established treatments and innovative therapies for patients with MS, the group said.

Extavia is Novartis' branded version of Bayer AG's BAYG.DE Betaseron, interferon beta-1b, a first-line disease-modifying therapy injected every other day for the treatment of MS.

Novartis and Bayer settled a dispute over Betaseron in a deal that gave Bayer full control of the product while allowing Novartis to launch a version in 2009.

Extavia will give Novartis an important presence in MS treatment before the submission of its once-daily therapy FTY720 (fingolimod). Novartis plans to file for approval of FTY720 by the end of 2009.

"Results of an ongoing Phase II study extension presented in April show sustained benefits in patients with relapsing MS after three years of treatment with FTY720," Novartis said.

"Data showed that 68 percent to 73 percent of patients in the study remained free from relapses after three years' continuous treatment," the company said.

Multiple sclerosis affects more than an estimated 2.5 million patients worldwide and is one of the leading causes of neurological disability in young adults.

(Reporting by Katie Reid, editing by Elizabeth Fullerton)