UPDATE 1-SkyePharma lung drug accepted for FDA review

* Flutiform accepted for review by U.S. regulator

* Potential blockbuster may be approved in 2010

* Shares up 8.5 percent

(Adds analyst comment, shares, background)

LONDON, May 22 (Reuters) - SkyePharma SKP.L moved a step closer to getting its new asthma drug Flutiform approved in the United States on Friday after the Food and Drug Administration accepted the medicine for review.

Shares in the drug delivery specialist, which believes Flutiform can achieve sales of $1 billion a year, rose 8.5 percent to 185 pence by 0825 GMT on the news.

Piper Jaffray analyst Richard Parkes said he expected Flutiform, SkyePharma’s most important pipeline product, to be launched in the second half of 2010.

An approval by the U.S. regulator will trigger a $25 million milestone payment from marketing partner Abbott Laboratories ABT.N. In the meantime, SkyePharma gets a $2 million milestone for acceptance of the file, from which a filing fee of $1.2 million will be deducted.

Flutiform will have to compete with existing fixed-dose asthma combination drugs on sale in the United States, such as GlaxoSmithKline's GSK.L market-leading Advair and AstraZeneca's AZN.L Symbicort.

But Chief Executive Ken Cunningham told Reuters in March he still expected the drug to be a billion-dollar product, with probably two-thirds of sales in the United States and the remainder in Europe and other countries.

The market for asthma treatments is about to get tougher, with the potential entry of generic versions of Advair and Symbicort, and the arrival of next-generation therapies.

But the generic erosion may be gradual, since inhaled asthma drugs are not easy to substitute one for another.

SkyePharma is partnering with Mundipharma in Europe, where Flutiform is expected to be filed for approval in the first quarter of 2010. (Reporting by Ben Hirschler; Editing by Jon Loades-Carter)