Avandia's label already warns about possible heart failure and other heart problems when taken with insulin. The drug also raises LDL or bad cholesterol, and can cause fluid retention and weight gain. Glaxo also has reported some patients suffered more bone fractures, swelling of the legs and feet, and rare reports of swelling in the eye that can cause vision problems.

However, in a conference call Monday, Dr. Lawson McCartney who leads Glaxo's diabetes drug development, said: "We remain very confident in the safety and of course in the efficacy of Avandia as an important diabetic medicine."

Dr. Robert J. Meyer of the FDA's Center for Drug Evaluation and Research, also defended the agency's actions, saying information about risks is not clear-cut.

"We've tried to weigh the risks of going forward with an uncertain message ... with the level of uncertainty about the safety signal before us,"

Glaxo's shares trading in the United States closed down $4.53, or 7.9 percent, at $53.18.

Nissen used publicly available information from an earlier $2.5 million Glaxo settlement with the state of New York to do his study. He also led earlier research that derailed a similar diabetes drug, Pargluva, that seemed headed for FDA approval until safety issues emerged. A fourth drug in the same class, Rezulin, was withdrawn in 2000 after it was linked to liver problems.

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On the Net:

New England Journal: www.nejm.org

GlaxoSmithKline: www.gsk.com

Glaxo clinical trial registry: ctr.gsk.co.uk

Food and Drug Administration: www.fda.gov

Avandia's label: tinyurl.com/2qzhfe

Diabetes information: www.diabetes.org and diabetes.niddk.nih.gov/