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UPDATE 1-FDA staff says NPS Pharma's bowel drug needs no safety restrictions

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* FDA staff found 3 concerns, but safety restrictions notneeded

* Shares jump 17 pct

(Adds analyst comments, details, background; updates stockmovement)

By Esha Dey

Oct 12 (Reuters) - U.S. drug reviewers found three seriousconcerns related to NPS Pharmaceuticals Inc'sexperimental drug for short bowel syndrome but said they did notthink the drug needed to be restricted for safety reasons,according to documents posted by the Food and DrugAdministration on its website Friday.

NPS shares rose to $10.72 on Friday morning on the Nasdaq,their highest in nearly 17 months. They are at $10.62, up 16percent.

"There was, on a consensus basis, a little apprehensionabout what the safety questions would be and these documentsmake it pretty clear that the FDA is not overly concerned orviews these risks as significant," McNicoll, Lewis & Vlakanalyst Ed Arce said.

The three risks observed by the FDA staff aregastrointestinal obstruction, biliary and pancreatic disordersand an acceleration in the growth of new tissue and colonpolyps.(ht tp://link.reuters.com/nuq33t)

The FDA reviewers said that the drug's approval wouldwarrant a risk evaluation and mitigation strategy and supportedplans proposed by the company.

Short bowel syndrome is a condition in which the body isunable to absorb enough nutrients and/or fluids through thegastrointestinal tract and patients chronically rely onintravenous feeding.

However, the reviewers added that access to Gattex shouldnot be restricted and the drug did not require any furtherassessment to assure safe use as it would be prescribed byskilled physicians and specialists.

The FDA review of NPS's Gattex, or teduglutide, comes aheadof an advisory meeting of independent experts next week todiscuss the drug.

The FDA, which will take into account the panel'srecommendations, is expected to make a final decision on thedrug by Dec. 30.

McNicoll's Arce said the likelihood of a positive panelrecommendation is about 80 percent.

Teduglutide is already approved in Europe and marketed asRevestive by Nycomed, which holds the right to develop andcommercialize teduglutide outside North America.

The drug is intended to treat patients with the syndrome whoare dependent on parenteral nutrition and intravenous fluids.There are about 40,000 patients in the United States who requiretotal parenteral nutrition, the FDA said.

Other treatment options for short bowel syndrome are MerckKGaA's Zorbtive and Emmaus Medical's NutreStore.

(Editing by Sreejiraj Eluvangal and Rodney Joyce)

((esha.dey@thomsonreuters.com)(within U.S. +1 646 223 8780,outside U.S. +91 80 4135 5800)(Reuters Messaging:esha.dey.thomsonreuters.com@reuters.net))

Keywords: NPSPHARMA FDA/STAFFBRIEFING