UPDATE 1-Novartis kidney cancer drug clears key hurdle

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ZURICH, Feb 28 (Reuters) - Novartis (NOVN.VX: Quote, Profile, Research, Stock Buzz) will seek regulatory clearance for kidney cancer drug Everolimus in the second half of 2008 after it cleared late-stage testing earlier than expected, the Swiss drugmaker said on Thursday.

Everolimus, which analysts say could generate around 300 million euros a year in revenue by 2012, would compete in the crowded market for kidney cancer treatments that include Bayer's (BAYG.DE: Quote, Profile, Research, Stock Buzz) Nexavar, Pfizer's (PFE.N: Quote, Profile, Research, Stock Buzz) Sutent and Wyeth's (WYE.N: Quote, Profile, Research, Stock Buzz) Torisel.

"This is positive news for Novartis even if Everolimus would be competing in a crowded kidney cancer market," said BNP Paribas analysts in a note.

Late-stage, or Phase III trials of the drug were halted early after interim results showed significantly better survival in patients with advanced kidney cancer who received Everolimus compared to placebos, Novartis said.

Worldwide regulatory filings for this indication beginning with U.S. and EU authorities would be made in the second half of 2008, Novartis said. Regulators take roughly one year to render decisions, required before new treatments can come to market.

Shares in Novartis were slightly higher at 55.65 francs at 0822 GMT, in line with light gains in the DJ Stoxx European healthcare index . (Reporting by Thomas Atkins and Sven Egenter; Editing by Louise Ireland)