* Potential peak sales of $1.5 bln from new Rezular uses
* To focus on developing speciality products for U.S. market
* Shares down in thin trade
(Adds more detail, shares)
DUBLIN, Sept 22 (Reuters) - Ireland's AGI Therapeutics will widen its focus beyond gastro intestinal disorders and develop alternative uses for its flagship Rezular product after disappointing clinical trials earlier this year.
The drug maker, which reported a wider first-half loss on Tuesday, said it would now focus on developing speciality products for the United States and has sufficient cash reserves for at least two years to do that.
Earlier this year, AGI ended the development of Rezular, a treatment for irritable bowel syndrome, but the group said the drug may offer potential treatment for chronic diarrhea as well as non diarrhea-related problems which could lead to potential peak sales of $1.5 billion.
"We are pleased to have completed a rigorous business strategy and portfolio review, which provides a realistic route for rebuilding value in our pipeline," Chief Executive John Devane said in a statement.
Analysts at Piper Jaffray said the new strategy, focusing on small and less costly "orphan drug" status, made sense for a company of AGI's size.
The U.S. Food and Drug Administration's orphan drug status is reserved for new therapies that are being developed to treat diseases or conditions that affect fewer than 200,000 people in the United States and grants the drug developers seven years of market exclusivity.
But Piper Jaffray kept its neutral rating on the stock in the absence of more information on the outlook for Rezular.
"We have little visibility on potential newsflow catalysts and find it difficult to value AGI's portfolio with limited information about the Rezular indications," it said.
Shares in AGI fell 14 percent to 10 euro cents in thin volumes on Tuesday.
The drug maker said its other flagship drug -- AGI-004, for the treatment of chemotherapy-induced diarrhoea, will be considered for further development.
AGI said its first-half pretax loss widened to $9.3 million from $8.9 million a year ago. (Reporting by Carmel Crimmins; Editing by Jon Loades-Carter)