The Food and Drug Administration panel Thursday backed asenapine, a proposed Schering-Plough Corp. (SGP) drug, to treat schizophrenia and bipolar disorder.

The panel unanimously said asenapine, which would be sold under the brand name Saphris, is "acceptably" safe and effective for treating bipolar disorder. The panel voted 10 to 2 in favor of a question that asked if Saphris was shown to be effective for the acute treatment of adult schizophrenia, while the same 10 panel members said the drug was "acceptably" safe. Two panel members abstained from voting on the safety question.

Thomas P. Laughren, the director of the FDA's division of psychiatry products, said although the FDA hasn't reached a final conclusion on whether to approve Saphris, "in general we are in agreement that the sponsor has shown the drug is effective for these indications."

In a statement, Schering-Plough said it was "very pleased" with the panel outcome. Earlier this year, Merck & Co. (MRK) announced plans to purchase Schering-Plough as part of deal that's likely to close by the end the year.

Laughren said Saphris and other so-called atypical antipsychotic drugs all have "significant risks" including sedation, weight gain, and over time concerns about diabetes and other conditions linked to weight gain. The drugs can also cause a serious movement disorder called tardive dyskinesia. Still, he said schizophrenia and bipolar are serious disorders that need new treatment options because not all patients respond well or tolerate individual drugs.

If approved, Saphris would compete with other top-selling antipsychotic drugs like AstraZeneca's (AZN) Seroquel - the company's second-best-selling drug with $4.45 billion in sales in 2008 - and Eli Lilly's (LLY) top-selling drug Zyprexa, which had $4.7 billion in sales last year.

An FDA memo released in advance of the meeting said the data in support of Saphris' short-term efficacy, or effectiveness, in treating schizophrenia "are not overwhelming for this drug."

During the panel meeting, officials from Schering-Plough presented data from three studies involving Saphris in schizophrenia patients, which showed that one study was negative and two were positive in favor of Saphris.

The FDA said data showing the effectiveness of Saphris in treating bipolar disorder were "sufficient."

The FDA typically brings applications for new types of drugs to its advisory panels of outside medical experts for review before taking final action.

Schizophrenia is a mental disorder that afflicts about 1% of Americans and is a major contributor to suicide. According to the National Institute of Mental Health, people with schizophrenia may hear voices other people don't hear or they may believe that others are reading their minds, controlling their thoughts or plotting to harm them.

Bipolar disorder, also known as manic-depressive illness, is believed to affect about 1% to 3% of the U.S. population.

-By Jennifer Corbett Dooren, Dow Jones Newswires; 202-862-9294; jennifer.corbett@dowjones.com