The most common and most likely answer to this crossword clue is the 4 plus 7 letter word HAVE KITTENS
I've seen this crossword clue in The Times
H
A
V
E
K
I
T
T
E
N
S
More clues leading to the result HAVE KITTENS
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 = have kittens.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.