UPDATE 2-Merck says US FDA approves new AIDS treatment

(Adds comments, price, studies, side effects)

By Kim Dixon

WASHINGTON, Oct 12 (Reuters) - A new AIDS treatment made by Merck & Co (MRK.N), the first in a new class of drugs aimed at preventing replication of the virus, has been approved by U.S. regulators, Merck said on Friday.

The drug will be available in about two weeks, Merck said.

The U.S. Food and Drug Administration cleared Isentress, a pill given twice a day and known generically as raltegravir. An FDA advisory panel recommended approval of the drug in September.

It is the first in a new class of HIV treatments called integrase inhibitors that seek to block insertion of HIV genetic material into human DNA to prevent the creation of copies of the virus. "It seems very safe, compared to other agents. It is very potent in terms of HIV viral suppression," said Dr. Homayoon Khanlou, the AIDS Healthcare Foundation's Chief of Medicine, who was involved in the clinical testing.

Cowen & Co analysts have forecast that the drug could reap up to a $1 billion in sales by 2012. The drug could compete with a similar therapy being tested by Gilead Sciences (GILD.O).

Isentress was approved based on testing for 24 weeks in combination with a current therapy in about 700 patients who have become highly resistant to several marketed medicines for HIV, the virus that causes AIDS. The disease is often treated with a mixture of several medicines.

The company promised to study the drug for at least five years to monitor any side effects that might not have shown up in its initial clinical trials.

Resistance is a major problem as the human immunodeficiency virus (HIV) that causes AIDS can mutate, especially in patients who fail to rigorously follow the often complicated drug regimes.

The drug-resistant patient population has the highest unmet medical need, according to Merck, which is also studying the drug in previously untreated patients.

Merck estimates about 500,000 patients in the United States are getting the standard anti-retroviral therapy, and that between 30 and 40 percent of them have failed several regimes, suggesting they are developing resistance.

The company said it would charge about $27 per day, or $9,855 annually, for the drug. Steep prices for AIDS drugs have been criticized by patients and advocacy groups, who say they deter use of life-saving drugs.

"If the agent cost $10,000 (a year), for example, you are not going to be able to use it in everybody. The cost is always an issue," Khanlou said.

Because of treatment advances, more people are living longer with HIV or AIDS. In the United States alone in 2006, more than 1 million people were living with HIV or AIDS. An estimated 40,000 new cases are expected this year, according to the U.S. Centers for Disease Control and Prevention.

Serious drug-related adverse events reported in the Merck studies included anemia, heart attack and low white-blood cell count, Merck said.

There was also a larger number of malignant cancers in the group studied with Isentress, a topic discussed at length at the FDA's advisory panel. The cancers were types common among AIDS patients.

Merck has said the difference between the occurrence of these cancers in the Isentress group and the control group narrowed over time, though they were still more common in the Isentress group.

(Reporting by Kim Dixon)

((Editing by Toni Reinhold; Reuters Messaging; kim.dixon.reuters.com@reuters.net; email; kim.dixon@reuters.com; 1-202 354 5848)) Keywords: MERCK AIDS/

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