* Plans win European Commission approval with conditions
* Large companies try to focus on leading businesses (Recasts with oncology business, adds details)
BRUSSELS, Jan 28 (Reuters) - The European Commission onWednesday approved a plan by Novartis andGlaxoSmithKline to trade more than $20 billion worth ofassets, part of a reshaping of the drug industry at a time ofhealthcare spending cuts and more competition.
The companies agreed last April to the transaction thatincludes GSK buying Novartis' vaccines business, Novartispurchasing GSK's cancer drugs, and the two groups tying up inconsumer healthcare.
The Swiss drugmaker will buy London-based GSK's oncologyproducts for $14.5 billion plus another $1.5 billion thatdepends on the results of a trial in melanoma.
The Commission said its approval was conditional on thedivestment of two of Novartis's cancer treatments - LGX818, aB-Raf inhibitor, and MEK162, an MEK inhibitor.
B-Raf inhibitors and MEK inhibitors are therapies that blockcell proliferation, responsible for tumour growth andprogression, and can be used to treat a number of differentcancers.
The Commission said it had concerns that the transactionwould have reduced competition and innovation for theseproducts, but that the commitments address these concerns.
GSK is buying Novartis' vaccines, excluding influenza, for$5.25 billion plus potential milestone payments of up to $1.8billion and ongoing royalties. The companies also will form ajoint venture in consumer healthcare.
"The decision is conditional upon the divestiture of assetsin the vaccines and consumer health businesses," the Commission,which acts as the EU's anti-trust watchdog, said in a statement.
GSK has committed to divest one meningitis vaccine, grant aworldwide licence of another and offer further concessions inGermany and Italy, the Commission said.
The Commission had concerns the deal would hurt competitionon developing meningitis and diphtheria tetanus vaccines, aswell as products to stop smoking and to treat colds and pain.
GSK said that in Europe and Turkey, it had agreed to sellits NiQuitin products that help stop smoking and its Coldrexcold and flu products. In Sweden, it would sell its Panodil painmanagement, as well as its Nezeril/Nasin cold and flu products.
Novartis will sell its cold sore business in Europe.
GSK said it planned to complete the transactions withNovartis during the first six months of this year. (Reporting by Philip Blenkinsop and Robin Emmott, editing byDavid Evans)
Glaxosmithkline (GSK)