The fate of a GlaxoSmithKline Plc diabetes drug may become clearer on Wednesday when U.S. advisers vote on whether the widely used pill carries too much heart risk to stay on the market.

The high-stakes recommendation by a panel of outside experts is designed to help the Food and Drug Administration settle a three-year safety dispute over Avandia.

Views on Avandia's risks are mixed within the FDA. Opinions also could be split within the 33-member panel of scientific experts after hearing hours of sharply conflicting data on Tuesday on whether Avandia causes heart attacks.

Avandia's U.S. sales were just 1.5 percent of Glaxo's 2009 revenues, but investors fear the company could face more lawsuits if the drug is pulled from the market.

Glaxo shares were down 0.3 percent in London on Wednesday ahead of the vote.

On Tuesday, Glaxo agreed to pay $460 million to settle thousands of lawsuits over Avandia, Bloomberg reported, citing people familiar with the settlements.

Glaxo will settle about 10,000 suits for an average of $46,000 each, Bloomberg said. A Glaxo spokeswoman declined to comment. Plaintiffs' lawyers reached by Reuters also could not confirm a settlement.

The advisory panel is due to vote Wednesday afternoon on recommendations ranging from keeping the drug on the market with no warnings, to urging a withdrawal. Restrictions on use or beefing up warnings are among other choices.

Because the FDA asked panelists to select only one of the five options, there may be no clear majority.

In 2007, an advisory panel voted 20-3 that Avandia may increase the chances of a heart attack for some patients, but by 22-1 recommended that the drug stay on the market.

The agency will make the final call in the coming months but usually follows the advice of its panels.

On Wednesday morning, the committee heard a plea from a Canadian researcher to continue a study aimed at providing a clearer answer of Avandia's heart risks. The trial called Tide is comparing the Glaxo drug to Takeda Pharmaceutical Co's rival diabetes pill, Actos, which some FDA staff see as safer.

Dr. Hertzel Gerstein, the study's lead researcher, said the panel could take the easy way by relying on less-reliable data of harm or insist on high quality evidence from large long-term trials such as Tide.

Will we accept second best when we can do the best? he asked the panel.

Critics say the Tide study is unethical because there is enough information now to conclude Avandia is dangerous rather than waiting years for results from Tide. The committee will consider later Wednesday if Tide should continue.

DIVIDED FDA

The debate on Avandia's safety has raged since warnings were placed on the drug in 2007 saying some research linked the drug to a higher heart attack risk but the data is inconclusive.

FDA staff are deeply divided over the safety of Avandia, also known as rosiglitazone, and the agency has thrown the issue to the expert panel to untangle.

Dr. David Graham, an FDA reviewer who has pushed for Avandia's withdrawal for years, said the agency applies different standards when deciding whether to approve a drug versus determining risk after a medicine is on the market.

Graham told the panel on Tuesday the Record study relied on by Glaxo to show no increased heart attack risk from Avandia compared to older diabetes drugs would not pass muster for an approval. You wouldn't even hear about it because it's garbage, he said.

Dr. Ellis Unger, a deputy director of drug evaluation, said he found Record's results pretty reassuring on heart safety.

But he added it was up to the expert panel to decide if Record was legitimate.

Can we trust the sponsor (Glaxo) with the results of Record? I think that is something the committee is going to need to think about, Unger said.

Panelists asked some questions of Tuesday's presenters but gave little hint on how they were leaning.

GLAXO DEFENDS

Glaxo officials defended Avandia before the advisers on Tuesday, saying diabetes was a serious disease that needed multiple treatment options to control blood sugar and prevent devastating complications including amputations and blindness.

When used appropriately, (Avandia) has a positive benefit/risk profile and should remain a treatment for type 2 diabetes, said Dr. Murray Stewart, a Glaxo vice president for drug research and development.

For the FDA, the Avandia case is seen as a test of how the agency will handle major controversies under Democratic President Barack Obama. Officials are facing heavy pressure from consumer groups and some lawmakers who say the FDA fumbled decisions in past administrations and failed to protect the public.

(Reporting by Lisa Richwine; Editing by Tim Dobbyn)

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