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

* FDA staff found 3 concerns, but safety restrictions not needed

* Shares jump 17 pct

(Adds analyst comments, details, background; updates stock movement)

By Esha Dey

Oct 12 (Reuters) - U.S. drug reviewers found three serious concerns related to NPS Pharmaceuticals Inc's experimental drug for short bowel syndrome but said they did not think the drug needed to be restricted for safety reasons, according to documents posted by the Food and Drug Administration 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 16 percent.

"There was, on a consensus basis, a little apprehension about what the safety questions would be and these documents make it pretty clear that the FDA is not overly concerned or views these risks as significant," McNicoll, Lewis & Vlak analyst Ed Arce said.

The three risks observed by the FDA staff are gastrointestinal obstruction, biliary and pancreatic disorders and an acceleration in the growth of new tissue and colon polyps.(ht tp://link.reuters.com/nuq33t)

The FDA reviewers said that the drug's approval would warrant a risk evaluation and mitigation strategy and supported plans proposed by the company.

Short bowel syndrome is a condition in which the body is unable to absorb enough nutrients and/or fluids through the gastrointestinal tract and patients chronically rely on intravenous feeding.

However, the reviewers added that access to Gattex should not be restricted and the drug did not require any further assessment to assure safe use as it would be prescribed by skilled physicians and specialists.

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

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

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

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

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

Other treatment options for short bowel syndrome are Merck KGaA'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))