Swiss drugmaker Novartis AG edged closer to bringing the first oral multiple sclerosis treatment to market after new data showed its Gilenia cut relapse rates in the disease.

In February Novartis had pulled further ahead of rival Merck KGaA's pill cladribine to treat the debilitating nervous-system disease when Gilenia, FTY720, was given US priority review status.

The two treatments from Novartis and Merck are expected to claim a sizable chunk of the $8.6 billion market for MS since they are easier to take than the currently dominant injectables from Teva, Biogen Idec, Bayer and Merck.

But both experimental drugs have serious side effects because they interfere with the body's immune system, and the companies have to convince physicians and investors that the benefits clearly outweigh the risks.

The US Food and Drug Administration has required an advisory committee meeting on June 10 for Gilenia and will evaluate the risk management programme, which could result in it extending its review at the end of June.

'There have been a safety issue and some side effects, but the risk-benefit balance is still strongly in favour of Gilenia,' Helvea analyst Karl-Heinz Koch said.

'The strong value proposition - superior efficacy, no noticeable side effects and oral convenience - will position the drug to take a significant market share in what is expected to become a $16 billion market by 2016,' he said.

Data presented at the American Academy for Neurology (AAN) showed the annual relapse rates were reduced by 62 per cent in newly treated patients, while relapse rates were lowered by 44 per cent in previously treated patients, Novartis said.-Reuters