(Refiled to improve headline, no change to text)
* 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
By Ben Hirschler and Paul Sandle
LONDON, Dec 18 (Reuters) - Denmark has approved the sale ofa generic copy of GlaxoSmithKline's $8 billion-a-yearinhaled lung drug Advair, threatening future sales of theBritish firm's biggest product.
Sandoz, the generics division of Swiss drugmaker Novartis, and Vectura, another British company, said onWednesday they had received approval from Danish regulators forAirFluSal Forspiro, which was previously known as VR315.
The green light marks the first approval of the product inEurope and analysts said more European approvals were likely tofollow, with other Nordic countries and Germany seen amonginitial markets.
Sandoz has completed authorisation procedures in a furtherseven European countries but the group said the timing of finalapprovals in these markets would depend on national healthauthorities.
Investors in GSK, Britain's biggest drugmaker, have beenbracing for generic competition to Advair, which is also is alsoknown as Seretide and Viani, but exactly when generics wouldreach the market has been uncertain.
Much attention has been focused on development of theSandoz/Vectura product, which analysts have long thought was ageneric version of Advair. Sandoz confirmed on Wednesday thatits medicine did, indeed, contain the two active ingredients inAdvair - salmeterol and fluticasone.
Inhaled drugs such as Advair are difficult to copy becauseof the complexity of making a device that works effectively todeliver the medicine directly into the lungs.
"The regulatory pathway to generic respiratory medicine isquite complicated, so it's certainly an important milestone forVectura to have this one approved," said analyst Charles Westonat Numis.
The approval poses a threat to GSK but Weston said genericcannibalisation was likely to be fairly slow.
Alistair Campbell of Berenberg Bank also said the genericproduct would not be directly substitutable at pharmacies forAdvair.
Berenberg had been assuming a 40 percent chance of approvalin Europe and 2017 sales of around $250 million, or roughly 10percent of Advair's current European sales.
RESPIRATORY LEADERSHIP
"VR315 in Europe, with a 40 percent chance of approval,makes up 19 pence of our Vectura valuation. On an un-riskedbasis, this climbs to 46 pence," Campbell said in a researchnote.
The new Sandoz/Vectura drug uses an advanced inhaler and isdesigned for patients with asthma and chronic obstructivepulmonary disease (COPD). It has been approved in Denmark inboth 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 Europehealthcare sector index, while Vectura was up 13.4percent at 137.25 pence. Novartis was up 1 percent at 68.45Swiss francs.
A spokesman for GSK said it was waiting to see more detailsbefore commenting on developments.
GSK has for many years been a market leader in respiratorymedicine and the company hopes to maintain its leading positionwith the introduction of a new generation of products for asthmaand COPD.
That strategy received a boost on Wednesday when the U.S.Food and Drug Administration (FDA) approved GSK's Anoro forCOPD, following a green light earlier in the year for anotherlung drug known as Breo or Relvar.
There are currently no generic versions of Advair in theUnited States but the prospect of copies reaching the world'sbiggest market were increased in September by a draft guidancedocument from the FDA setting out requirements for such copies.
(Editing by Kate Kelland and Greg Mahlich)
Glaxosmithkline (GSK)