PREVIEW-German case tests patent on top Glaxo drug Advair

* Munich case pitches Glaxo vs Mylan, Hexal, Neolab and Ivax

* Advair combination patent already revoked in UK, Ireland

* Europe likely to see generics before U.S.

* Generic Advair hard to make; Glaxo has follow-on drug

By Ben Hirschler, European Pharmaceuticals Correspondent

LONDON, Feb 18 (Reuters) - GlaxoSmithKline (GSK.L) will battle to defend a key patent next week on its top drug in Germany, Europe's biggest market, in a court case highlighting the worldwide generic threat to lung treatment Advair.

Advair, which made up 18 percent of Glaxo group sales last year, is vital to the British drugmaker's growth in the next few years. But its future is clouded by uncertainty over generics.

A decision on whether to revoke or uphold the patent in the national case in Germany could be handed down on the day of the Feb. 23 hearing, or the judge in Munich may opt for a written verdict some six weeks later.

The trial is part of a complex legal struggle between Glaxo and a group of generic drugmakers, including Novartis (NOVN.VX) unit Sandoz and Teva TEVA.O, which hope to sell copies of the two-in-one inhaler for asthma and COPD, or "smoker's lung".

With sales last year of $7.8 billion and revenues expected to peak at $9.5 billion in 2011, according to consensus forecasts from Thomson Pharma, Advair is a juicy prize.

While much attention has been focused on Advair risks in the United States, where an application to sell a generic could come this year, the threat in Europe is more immediate.

A generic version of Advair -- also known as Seretide and as Viani in Germany -- is in fact already sold in Greece by local manufacturer Elpen (link.reuters.com/jym99h).

Elsewhere, Glaxo retains exclusivity but the medicine's all-important 2013 combination patent has been overturned in both Britain and Ireland, and generic drugmakers have filed for regulatory approval of generic Advair in Finland, according to people familiar with the situation.

A patent defeat in Germany, which is Europe's biggest drugs market, would be a further blow to confidence.

READY TO POUNCE

The Munich case pitches Glaxo against Mylan (MYL.O), Neolab, Hexal, which is part of Sandoz, and Ivax, a unit of Teva.

Another patent case in the Netherlands, which was scheduled for Feb. 19, has been postponed and is now expected to take place in the second half of 2010 or early 2011.

The flurry of legal and regulatory action shows generic companies getting ready to pounce, analysts believe.

"The barriers are a bit lower in Europe and there will probably be more companies that can satisfy the regulatory demands than in the U.S.," said Stefan Hamill, an analyst at stockbroker Execution Noble.

Both Hamill and analysts at Citigroup think European generics could reach the market from next year. It is likely to be rolled out initially in Britain and Ireland, where the patent has already been revoked, and possibly Germany.

In the United States, by contrast, the regulatory system means generics are unlikely before the latter part of 2012, even though Advair's main U.S. patent actually expires in 2010.

By that time, Glaxo hopes that its follow-on drug to Advair, which it is developing with Theravance (THRX.O) under the "Horizon" programme, will be about ready for launch.

Glaxo CEO Andrew Witty last month played down the overall generic threat to Advair, given the technical difficulties of making safe and effective copies of inhaled lung drugs.

But for Sandoz CEO Jeff George, who is working with Vectura (VEC.L) on a compound called VR315 that analysts think is a copy of Advair, it is precisely this hurdle that appeals, since any successful respiratory generic will command a better price than a conventional bargain-basement generic white tablet.

"It's a challenging space from a device perspective and a formulation perspective ... but that is actually something that advantages Novartis quite a bit," he said in a recent interview.

(Editing by Sitaraman Shankar)