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* Green light generic copy of GSK's $8-billion drug Advair
* Danish approval is first for product in Europe
* Inhaled medicine developed by Vectura and Sandoz
* News overshadows U.S. approval for new GSK drug Anoro
* GSK shares fall 1.1 percent, Vectura up 13.4 percent
LONDON, Dec 18 (Reuters) - Denmark has approved the sale of a generic copy of GlaxoSmithKline's $8 billion-a-year inhaled lung drug Advair, threatening future sales of the British firm's biggest product.
Sandoz, the generics division of Swiss drugmaker Novartis , and Vectura, another British company, said on Wednesday they had received approval from Danish regulators for AirFluSal Forspiro, which was previously known as VR315.
The green light marks the first approval of the product in Europe and analysts said more European approvals were likely to follow, with other Nordic countries and Germany seen among initial markets.
Sandoz has completed authorisation procedures in a further seven European countries but the group said the timing of final approvals in these markets would depend on national health authorities.
Investors in GSK, Britain's biggest drugmaker, have been bracing for generic competition to Advair, which is also is also known as Seretide and Viani, but exactly when generics would reach the market has been uncertain.
Much attention has been focused on development of the Sandoz/Vectura product, which analysts have long thought was a generic version of Advair. Sandoz confirmed on Wednesday that its medicine did, indeed, contain the two active ingredients in Advair - salmeterol and fluticasone.
Inhaled drugs such as Advair are difficult to copy because of the complexity of making a device that works effectively to deliver the medicine directly into the lungs.
"The regulatory pathway to generic respiratory medicine is quite complicated, so it's certainly an important milestone for Vectura to have this one approved," said analyst Charles Weston at Numis.
The approval poses a threat to GSK but Weston said generic cannibalisation was likely to be fairly slow.
Alistair Campbell of Berenberg Bank also said the generic product would not be directly substitutable at pharmacies for Advair.
Berenberg had been assuming a 40 percent chance of approval in Europe and 2017 sales of around $250 million, or roughly 10 percent of Advair's current European sales.
"VR315 in Europe, with a 40 percent chance of approval, makes up 19 pence of our Vectura valuation. On an un-risked basis, this climbs to 46 pence," Campbell said in a research note.
The new Sandoz/Vectura drug uses an advanced inhaler and is designed for patients with asthma and chronic obstructive pulmonary disease (COPD). It has been approved in Denmark in both mid- and high-strength dosage forms.
Shares in GSK ended down 1.1 percent at 1,548.5 pence, underperforming a 0.8 percent advance in the Stoxx 600 Europe healthcare sector index, while Vectura was up 13.4 percent at 137.25 pence. Novartis was up 1 percent at 68.45 Swiss francs.
A spokesman for GSK said it was waiting to see more details before commenting on developments.
GSK has for many years been a market leader in respiratory medicine and the company hopes to maintain its leading position with the introduction of a new generation of products for asthma and COPD.
That strategy received a boost on Wednesday when the U.S. Food and Drug Administration (FDA) approved GSK's Anoro for COPD, following a green light earlier in the year for another lung drug known as Breo or Relvar.
There are currently no generic versions of Advair in the United States but the prospect of copies reaching the world's biggest market were increased in September by a draft guidance document from the FDA setting out requirements for such copies.
(Editing by Kate Kelland and Greg Mahlich)