(Recasts, adds studies, rival drug details, Merck shares)

By Kim Dixon

WASHINGTON, Aug 31 (Reuters) - An experimental AIDS drug developed by Merck & Co <MRK.N> got a boost on Friday when U.S. drug reviewers ahead of a key advisory panel meeting said its benefits outweigh risks.

Staff with the U.S. Food and Drug Administration said they support the safety and effectiveness data of the pill, called Isentress, according to documents posted on the agency's Web site. A panel of FDA advisers will meet Sept. 5 to review Merck's bid and make a recommendation.

Isentress, known generically as raltegravir, was tested in patients who have become resistant to HIV medicines. Resistance is a problem as human immunodeficiency virus (HIV) can mutate, particularly if patients fail to rigorously follow complicated regimes.

If approved, it would be the first in a new class of HIV medicines called integrase inhibitors that aim to block insertion of HIV genetic material into human DNA to prevent replication of the virus.

Cowen & Co. analysts have said the drug could reap sales of $1 billion by 2012. The drug could compete with a similar treatment being developed by Gilead Sciences <GILD.O> known as GS-9137.

FDA staff said the most common side effects occurring in the Isentress group were rash and an increase in levels in the blood of the protein creatine. No deaths in the clinical trial data could be linked to the drug, they wrote.

In Merck's two major human trials of the drug, about 700 patients received either the treatment or another therapy. All had become resistant to at least one commonly used treatment.

Because of advances in treatment, more people are living with HIV or AIDS than ever before. From 2001 to 2005, the numbers of those living AIDS in the United States rose 27 percent to about 422,000 people, according to the U.S. Centers for Disease Control and Prevention.

Shares of Merck rose 39 cents to $50.05 in morning trading on the New York Stock Exchange.

Analysts expect Merck to present favorable data on Sunday on an experimental drug to raise good HDL cholesterol.

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