* FDA: 88 pancreatitis cases reported
* Merck official says no link to diabetes drug
* Doctors should monitor patients, agency says (Adds European recommendation for use with insulin, closing share price)
WASHINGTON, Sept 25 (Reuters) - U.S. health officials said on Friday they suspect Merck & Co Inc'sblockbuster diabetes drug Januvia may be linked to serious cases of inflamed pancreas, but company officials disputed the connection.
The Food and Drug Administration said that 88 cases of acute pancreatitis had been reported since the drug's approval in 2006 through February 2009.
Because a number of patients developed the condition soon after taking Januvia, or related drug Janumet, and more than half saw it disappear after they stopped using it, "FDA believes there may be an association" with the drug.
Of the reported cases, 19 patients saw problems within 30 days of the drugs' use, and 47 cases resolved after use of Januvia or Janumet was discontinued, the agency said.
But Dr. John Amatruda, a Merck senior vice president for diabetes products, said: "We don't believe that the data establishes a relationship" between the condition and the drugs, which both contain the active ingredient sitagliptin.
Patients with diabetes are twice as likely to develop pancreatitis even without medication, Amatruda said.
Several other rival products, including Amylin Pharmaceuticals Inc'sByetta, have also been linked to an increased risk of pancreatitis, which can be deadly if not treated.
Barbara Ryan, an analyst at Deutsche Bank, said the news is unlikely to affect sales of Januvia. Merck has forecast 2009 combined sales of between $2.4 billion and $2.7 billion for the two drugs.
"It's more an issue related to diabetes. You're going to find that irrespective of what therapy people are on," she said. "The question is whether the incidence is higher than what would be expected."
Merck later announced that a European health advisory committee recommended Januvia and Janumet be approved for use as an add-on to insulin for the treatment of type 2 diabetes.
The company is awaiting a decision from the FDA on whether its diabetes drugs can be used with insulin in the United States. The Januvia and Janumet labels state that they have not been studied in combination with insulin, the company said.
Merck shares closed up 24 cents $31.25 on the New York Stock Exchange.
The FDA said it was working with Merck to add information about the cases to the drugs' labels and that doctors should closely monitor their patients. (Additional reporting by Bill Berkrot in New York; Editing by Tim Dobbyn and Matthew Lewis)
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