* FDA advisory panel votes 14-4 to recommend approval
* Panel wants more study on long-term use, sicker patients
* Agency will weigh recommendation, decision due March 24
* Shares rise more than 17 pct in extended trading (Adds share price, panel and company comments, background on drug)
By Susan Heavey
WASHINGTON, Feb 23 Salix Pharmaceuticals' SLXP.O diarrhea drug Xifaxan should be cleared to treat patients with a debilitating liver disorder, but more study would still be needed after approval, a U.S. Food and Drug Administration advisory panel said on Tuesday.
Shares of the specialty pharmaceutical company rose as much as 18 percent in after-hours trading following the panel's recommendation.
FDA's outside advisers, in a 14-4 vote, said the antibiotic appeared to help patients with the liver condition, but that the company's single clinical trial did not look at the sickest patients or follow subjects long enough given that the drug would be used until patients get a liver transplant or die.
Despite those concerns, "clearly, the potential benefits outweigh the risk," said panelist Richard Haubrich, a medical professor at University of California in San Diego.
Salix is seeking expanded FDA approval for certain patients with hepatic encephalopathy, a disorder that can occur with severe liver disease when toxic substances accumulate and impair brain function.
FDA officials will weigh its panel's recommendation before later making their final decision, expected by March 24.
The panel's vote boosted Salix's shares, which had fallen nearly 14 percent since FDA staff reviewers on Friday expressed concern about the size and assessment of the trial results as well as potential safety issues with Xifaxan. Its shares had been halted but were up more than 17 percent at 28.50 in extended trading on Tuesday after closing at $24.25 on Monday.
The FDA is weighing the new use as an "orphan" product for rare conditions, but at least one panelist pointed to potential broader use as the number of liver problems grows in the United States. Alan Lockwood, a neurologist at Buffalo General Hospital in New York, said he expected wider use with cirrhosis -- a liver condition linked to alcohol use and hepatitis C -- already the nation's 12th leading cause of death.
Salix has already said it expects seven years of market exclusivity given the product's FDA orphan status.
At the meeting, Salix officials told the FDA's advisers that its single clinical trial supported wider use of the drug, which could help improve patients' quality of life by helping to eliminate "brain fog" and other neurological problems that can result from hepatic encephalopathy.
Company officials, in a statement after the FDA meeting, said they were pleased with the panel's vote.
Still, some members rejected Salix's data, saying patients were followed at most for one year and that only patients with less severe disease were studied. Even those backing approval called for additional trials or further patient monitoring.
"If it ultimately comes to approval it will surely be used by clinicians everywhere in patients who are much, much sicker," said panelist and Pennsylvania physician Steven Solga.
Panelists also said, if approved for the liver use, Xifaxan's label should call for it to be used in conjunction with lactulose, a treatment approved in 1974.
Xifaxan, known generically as rifaximin, is already FDA-approved for so-called travelers' diarrhea caused by certain strains of E. coli bacterium. Salix is also studying it for other types of diarrhea and irritable bowel syndrome. (Editing by Leslie Gevirtz and Steve Orlofsky)