"In some cases, these events have occurred in the presence of other drugs that have been associated with hepatic (liver) injury," the Food and Drug Administration (news - web sites) and Biogen said in a statement posted on the agency's Web site.

Biogen shares suffered their second recent drop on the news, which came about two weeks after the company halted sales of its other MS drug, Tysabri, when a patient died from an infection.

Company shares closed down 88 cents, or 2.31 percent, to $37.19 on the Nasdaq after earlier falling nearly 9 percent.

Biogen spokeswoman Amy Ryan said the change was "a minor update" to the Avonex label.

She said the company had received "very, very few" reports of liver damage in Avonex patients, but declined to give specific numbers. "It is a very rare issue," she said.

At least one analyst downplayed the Avonex warning.

"Avonex has been safely used for almost a decade," said Max Jacobs, a biotech analyst for Mehta Partners.

He called the selloff "an overreaction. This basically just says don't mix Avonex with alcohol."

In February, the company said two cases of a rare but often fatal infection of the central nervous system occurred in patients taking Tysabri in combination with Avonex, an older drug, for more than two years.

There was no sign of the condition in patients taking only Tysabri, which Biogen makes with Elan Corp. Plc. .

Earlier on Wednesday, GlaxoSmithKline Plc said the FDA (news - web sites) halted clinical trials of drugs like Tysabri, including its experimental product called SB 683699.

Dr. Ausim Azizi, head of neurology at Temple University in Philadelphia, said Avonex's warning was "relatively mild" and not as troubling as news about the other, newer drugs.

"We have already known quite a bit about the fact that we need to keep an eye on the liver," he said.

More than 1 million people worldwide suffer from multiple sclerosis, an auto-immune disorder that can cause blurred vision, weakness and memory loss.

Avonex, which saw $1.42 billion in sales last year, won FDA approval in 1996 and faces increased competition from Pfizer Inc's Rebif and Schering AG's Betaseron.

The three injectable medicines are beta-interferon drugs, which block the immune system's white cells from attacking the protective coating that surrounds nerve fibers.

Biogen's Ryan said liver trouble has been reported with all drugs in the beta-interferon class. "This is not a product-specific issue," she said.

Pfizer changed Rebif's label in December to include a strong warning similar to the Avonex update, while Betaseron's label offers a more mild caution about potential liver problems.

Azizi said liver risk for the two competitors to Avonex showed "no major red flags."

Tysabri and GSK's experimental drug are part of a new class of MS drugs called selective adhesion molecule, or SAM, inhibitors.

Biogen said it will revise Avonex's label to include the new warning starting April 18. (Additional reporting by Ransdell Pierson in New York and Lisa Richwine in Washington)

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