AstraZeneca (NYSE:AZN) sold more than $4.4 billion worth of its schizophrenia and bipolar treatment Seroquel last year, but it's not satisfied with the drug's being a blockbuster four times over and is trying to get the drug approved for additional indications. Unfortunately, the side-effect profile that's acceptable for one disease is often too severe for another, and a wide label change seems unlikely.

Yesterday, a Food and Drug Administration advisory panel voted that Seroquel had too many side effects to justify the use of the drug as a first choice to treat anxiety and split on whether it should be used as a first choice to treat depression. The difference is likely due to the severity of the disorders -- the reality that depression is more severe than anxiety probably swayed a few panel members to recommend the drug despite the side effects.

The experts on the panel were a little more lenient when it came to using the drug as a second-line treatment in patients that aren't responding to other depression treatments, such as Pfizer's (NYSE:PFE) Zoloft, GlaxoSmithKline's (NYSE:GSK) Paxil, or Forest Labs' (NYSE:FRX) Lexapro. The panel voted 6-3 to recommend that the drug be approved as an add-on treatment. That should still leave plenty of patients for Seroquel to treat if the FDA agrees considering that up to 35% of depressed patients don't respond to their first two treatments, although it will have to compete with Eli Lilly's (NYSE:LLY) Symbyax, a combination of the active ingredients of its Zyprexa and Prozac, which was recently approved for that indication.

How the FDA will handle side effects of a drug is a difficult factor for investors to estimate, because it's fairly subjective, and a lot of factors -- such as how well the drug works compared to its competitors -- need to be considered. For instance, yesterday, Genentech, recently acquired by Roche, started pulling Raptiva from the market because three patients taking the drug have come down with a rare brain infection called progressive multifocal leukoencephalopathy (PML). Two have died. Raptiva treats psoriasis, and there are other treatments on the market, so the potential side effect isn't worth the benefit. 

In contrast, Biogen Idec (NASDAQ:BIIB) and Elan's (NYSE:ELN) Tysabri has also been linked to PML, but I think the FDA is unlikely to ask the drugmakers to withdraw Tysabri because it works so much better than other available treatments. 

We will have to wait for final word from the FDA, but it looks as if Seroquel might get a slightly expanded label -- just not as broad as AstraZeneca wanted.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.