By Will Dunham

WASHINGTON, Aug 13 (Reuters) - A drug that Novartis AG <NOVN.VX> is testing in people with multiple sclerosis also has the potential to treat certain viral infections, perhaps including the AIDS virus, U.S. researchers said on Wednesday.

Low doses of the drug FTY720, also called fingolimod, given to mice once a day for three days eliminated an infection by a virus that can cause meningitis, an inflammation of the membranes surrounding the brain and spinal cord.

The findings suggest the drug, which boosted anti-viral immune responses in the mice, may be useful against viruses that cause high-level, long-lasting infections in people such as hepatitis C and HIV, the researchers said.

Microbiologist and immunologist John Altman of Emory University in Atlanta, who led the study, said the researchers plan to assess the effects of the drug on other viruses including the monkey version of the AIDS virus.

Altman, whose findings were published in the journal Nature, expressed cautious optimism that the drug might work against certain chronic viral infections in people.

"We think it's crucial that we do experiments to check it out," Altman said in a telephone interview.

The drug is generally considered to be an immunosuppressant that works to restrain the body's natural defenses.

That could be helpful in multiple sclerosis, an autoimmune disease in which the immune system attacks body parts as if they were foreign invaders.

But one effect of the drug seems to facilitate the immune response, the researchers said. FTY720 among other things traps white blood cells -- key soldiers in the immune system's fight against infections -- in the lymph nodes, Altman said.

With viral infections, the lymph nodes are where the immune response can get primed and started, Altman said. Some viruses replicate themselves at high levels in lymph nodes, including the human immunodeficiency virus that causes AIDS.

They tested the drug against a mouse virus called lymphocytic choriomeningitis, which causes chronic infections by escaping immune responses.

"In the absence of treatment (with FTY720) we have an exhausted immune response. In the presence of treatment, we regain a robust cellular immune response," Altman said.

Swiss drug maker Novartis said in June two multiple sclerosis patients taking FTY720 in clinical trials had problems with infections and one died, but the role of the drug in the cases was unclear.

Novartis plans at the end of 2009 to seek approval by the European Union for FTY720 to treat MS, spokeswoman Valerie Tate said by e-mail. The drug is currently in late-stage trials.

Altman said his study was backed by the U.S. government's National Institutes of Health and was not funded by Novartis. (Editing by Maggie Fox)

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