The most common and most likely answer to this crossword clue is the 7 letter word ANXIETY
I've seen this crossword clue in The Guardian
A
N
X
I
E
T
Y
Buddy explains!
The straight part
We know that "panic" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case panic = anxiety.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does ANXIETY mean?
ANXIETY noun- An unpleasant state of mental uneasiness, nervousness, apprehension and obsession or concern about some uncertain event.
- An uneasy or distressing desire (for something).
- A state of restlessness and agitation, often accompanied by a distressing sense of oppression or tightness in the stomach.