European regulators have endorsed the continued use of Novartis AG's
Novartis said the decision meant the drug remained on-track to be a blockbuster - one with annual sales above $1 billion.
Prospects for Gilenya, the first multiple sclerosis (MS) pill of its kind, have been clouded by reports of its association with serious heart problems.
The European Medicines Agency (EMA), which had initially aimed to give an update on Gilenya last month, said doctors should not prescribe it to patients with a history of cardiovascular and cerebrovascular disease or those on heart-rate lowering medication.
If treatment with Gilenya was considered necessary in these patients, however, their heart activity should be monitored at least overnight following the first dose of the drug, it said.
All patients getting the drug should have an electrocardiogram (ECG) and a blood pressure measurement prior to the first dose and after a six-hour initial period, during which continuous ECG monitoring is recommended.
A committee of EMA experts said the possible risk of heart problems could be limited by these stronger warnings.
With these risk-minimisation measures in place, the committee concludes that the benefits of Gilenya continue to outweigh the risks, the agency said in a statement.
David Epstein, head of Novartis Pharmaceuticals, said he welcomed EMA's confirmation of Gilenya's positive benefit-risk profile which also supports our continued belief of the blockbuster potential of Gilenya.
WORST CASE AVOIDED
Analysts said there would be relief that the drug had not been pulled off the market but safety concerns would linger.
Martin Voegtli at Kepler Capital Markets said the strengthened warnings against prescribing in patients with cardiovascular risk factors would restrict the patient population and hit sales forecasts.
But Tim Race of Deutsche Bank viewed the EMA verdict more positively, since it ruled out the worse-case scenarios of either product removal or overnight monitoring for all patients.
Shares in Novartis were 0.6 percent higher at 1000 GMT, broadly in line with the European drugs sector.
Gilenya is still seen by analysts as a big seller, with annual sales of $1.7 billion by 2015, according to consensus forecasts collected by Thomson Reuters Pharma. But that is down on the $2.2 billion forecast in late 2011, due to safety fears.
In recent months, doctors have grown more cautious about the drug following reports of heart problems in some patients and the death of one person in the United States within 24 hours of starting treatment.
Those cases prompted the EMA to start its review in January, when it first advised doctors to continuously monitor patients for six hours after giving them a first dose. The U.S. Food and Drug Administration (FDA) is also looking into the drug.
Gilenya represents a significant change in MS treatment, since existing medicines like beta interferons and Elan
Rival oral MS treatments in development include BG-12 from Biogen, teriflunomide from Sanofi
(Reporting by Ben Hirschler; Editing by Kate Kelland and Helen Massy-Beresford)