* Approval comes 3 months early
* Shares fall 21 percent (Adds CEO comment, updates share price)
Dec 14 (Reuters) - The U.S. Food and Drug Administration on Friday granted earlier-than-expected approval to Ariad Pharmaceuticals Inc's drug for two rare types of leukemia, but is requiring that patients be warned of potential side effects, sending the company's shares down more than 20 percent.
The drug, given the brand name Iclusig, was approved three months ahead of time under the FDA's accelerated program for earlier access to promising new therapies.
The agency is requiring a so-called "black box" on the drug's label warning of the potential for arterial thrombotic events and liver toxicity, according to Ariad.
"While the black-box warning may impact the pace of adoption initially in the community setting, we expect high volume academic centers to quickly look past the warning," BMO Capital Markets analyst Jim Birchenough said in a research note.
Harvey Berger, Ariad's chief executive officer, said the FDA's view is that all adverse events seen in trials of the drug need to be flagged, whether or not they can be attributed to ponatinib, since the drug has not yet been studied in direct comparison to another treatment.
"There is nothing new here," he said in a telephone interview. "These types of events are quite common in patients of this age who are being heavily treated with a variety of medicines."
The approval covers use of the drug, also known as ponatinib, to treat chronic myeloid leukemia and Philadelphia chromosome positive acute lymphoblastic leukemia, two types of rare blood and bone marrow cancers, in adults who had been treated with older drugs.
"We would be buyers of Ariad into the 2013 Iclusig launch," Guggenheim analyst Bret Holley said in a research note.
He forecast a relatively rapid uptake of the drug in earlier treatment of CML and a good possibility of positive results from an ongoing trial of the drug as an initial treatment for the targeted diseases.
Results from that trial are expected in 2014, Berger said.
Ponatinib was granted orphan product status for drugs that treat rare diseases. The status grants the drugmaker marketing exclusivity for seven years in the United States.
Iclusig is designed to block an abnormal protein that stimulates the development of the two rare types of leukemia.
Aria shares, which have gained nearly 70 percent so far this year, fell $4.95 to close at $18.93 on Nasdaq. (Reporting by Deena Beasley in Los Angeles and Vrinda Manocha in Bangalore; Editing by Maju Samuel, Andre Grenon and Marguerita Choy)