UPDATE 1-Alfacell's mesothelioma drug granted orphan status

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CHICAGO, Jan 30 (Reuters) - Alfacell Corp.ACEL.OQ said on Tuesday it won U.S. orphan-drug designation for its lead cancer drug candidate Onconase, to treat a rare form of cancer caused by asbestos exposure.

Alfacell shares rose 22 cents to $1.85, or 13.5 percent.

Onconase is intended to treat malignant mesothelioma, a rare disease in which cancer cells form in the lining of the chest, abdomen or other organs.

But the drug is also being studied for non-small cell lung cancer, whose sufferers are an undertreated and much bigger patient market.

Orphan drug designation gives Alfacell seven years of marketing exclusivity -- if it wins approval from the U.S. Food and Drug Administration.

Mesothelioma is primarily caused by exposure to asbestos. There are about 2,000 to 3,000 new cases each year in the United States, according to the American Cancer Society. The average survival time is one to two years.

Drug maker Eli Lilly (LLY.N) sells a drug for mesothelioma, Alimta, which is also used to treat non-small cell lung cancer.

Alfacel will perform a similar strategy, according to Ray Myers, director of research at brokerage EG Equities.

"It's very common in oncology to get an orphan indication such as this for your first approval, because once you get approval its relatively easy to extend your label for bigger sales like for lung cancer," said Myers, who has a "strong buy" rating on the stock.

In addition, doctors can prescribe an approved drug for any indication, known as "off-label use."

((Reporting by Kim Dixon and Julie Steenhuysen, editing by Brian Moss; julie.steenhuysen@reuters.com; Reuters Messaging: julie.steenhuysen.reuters.com@reuters.net; +1 312 408 8131)) Keywords: ALFACELL FDA/

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