* Drug is first such immunotherapy pill licensed in U.S.
* Merck and partner ALK Abello expected to launch rival drug this year
* Shares in Stallergenes rise 6 percent (Adds detail, share price, analyst comment)
CHICAGO/PARIS, April 2, (Reuters) - France's Stallergenes has received U.S. regulatory approval to sell the first immunotherapy pill against grass allergies in the world's biggest pharmaceutical market, sending its shares up 6 percent on Wednesday.
Stallergenes has said it sees a potential U.S. market of nearly 3 million patients that will eventually be worth $1 billion in annual sales for these types of drugs.
"That's very positive news as the group is considerably expanding its market," Gilbert Dupont analysts wrote in a note.
Oralair is a fast-dissolving tablet to be placed under the tongue that contains extracts from five types of grass pollen: sweet vernal, orchard, perennial rye, timothy and Kentucky bluegrass. It harnesses the immune system to alleviate allergies and is an alternative to current treatments that need to be injected.
Merck and Danish partner ALK Abello are also expected to launch their rival therapy Grastek in the United States this year. In December, both drugs received strong recommendations from outside advisers to the U.S. Food and Drug Administration (FDA).
Oralair was approved in the European Union in 2008 and is also sold in Canada, Australia and Russia for the treatment of grass pollen allergy. It generated revenue of 22.2 million euros ($30.5 million) in 2013, up 37 percent from 2012.
Greer Laboratories, Stallergenes' U.S. partner, aims to begin selling Oralair within weeks of the FDA's go-ahead. But the peak season for Oralair prescriptions is between December and June, so U.S. revenue from the drug this year should be limited, Stallergenes' former chief executive said last month.
The approval of Oralair triggers a first milestone payment of $10 million from Greer to Stallergenes. Overall, Stallergenes is due to receive milestone payments totaling up to $120 million, plus royalties and an undisclosed transfer price.
Shares in Stallergenes were 6 percent higher at 61.49 euros at 0840 GMT, trading at more than twice their average daily volume and giving the company a market capitalisation of 843 million euros. ($1 = 0.7271 Euros) (Reporting by Susan Kelly in Chicago and Natalie Huet in Paris; Editing by Eric Walsh and James Regan)