ZURICH (Reuters) - Novartis' Ilaris helps patients with the most serious form of childhood arthritis, a second late-stage study has shown, further boosting prospects for the Swiss drugmaker's medicine that hit a setback earlier this year.

Ilaris, or ACZ885, met both of its main goals in the phase III triallooking at its use in systemic juvenile idiopathic arthritis (SJIA), a debilitating and painful disease that can affect a child's growth and can even be fatal, Novartis said on Monday.

The drug, which is already sold for treating cryopyrin-associated periodic syndromes, a rare inflammatory disorder, works by blocking a protein called interleukin-1 beta linked to inflammation.

Novartis plans to file for regulatory approval of the drug in SJIA in 2012 in both the United States and Europe, based on data from this and an earlier Phase III trial, which was presented earlier this year.

"We have had two positive trials that show the drug is very promising for these patients," John Hohneker, head of development for integrated hospital care at Novartis, told Reuters.

The latest set of data showed that 45 percent of children with active SJIA could substantially reduce the amount of steroids they were using to treat the illness within 28 weeks of taking Ilaris.

It also showed they were nearly three times less likely to suffer a new flare compared with those on placebo, Novartis said.

This news helps boost confidence in the treatment after U.S. regulators decided they were not ready to approve Ilaris for gouty arthritis.

Novartis is banking on new products to help it offset patent losses on big sellers such as blood pressure treatment Diovan.

Expectations for Ilaris, however, are relatively modest in the wake of the disappointment over its potential use for gout. Analysts, on average, forecast sales of $472 million in 2016, according to Thomson Reuters Pharma.

SJIA affects less than one child per 100,000. It causes inflammation affecting the whole body, which can involve skin rash, fever, joint pain and swelling.

(Reporting by Katie Reid; Editing by Jon Loades-Carter)