* FDA draft document points way to generic drug substitutes
* $8 bln-a-year lung drug accounts for fifth of GSK sales
* GSK says significant hurdles remain for Advair generics
* Shares down as much as 3.6 pct, biggest fall in 20 months (Adds GSK comment, details, latest shares)
By Ben Hirschler
LONDON, Sept 10 (Reuters) - The prospect of generic copiesof GlaxoSmithKline's best-selling lung drug Advairfinally making it to market in the United States hit confidencein the drugmaker on Tuesday, sending the stock down 3 percent.
Chances of cheaper versions of the $8 billion-a-year sellerbeing launched in the world's biggest market were increased by adraft guidance document from the Food and Drug Administration(FDA) setting out requirements for generic versions of theinhaled drug.
Analyst Tim Anderson at brokerage Bernstein said therequirements looked "fairly benign" for generic firms seeking tomake copies that could be automatically substituted for Advairwhen patients have their prescriptions filled.
Citigroup said its worst-case scenario for an acceleratedU.S. Advair sales decline, following the FDA document, couldslice up to 5 percent off GSK's valuation. Advair accounts forabout a fifth of GSK's sales.
At one stage shares in Britain's biggest drugmaker fell asmuch as 3.6 percent - the biggest intra-day since Jan. 9 lastyear, when the stock was hit by disappointing data related to afollow-on product to Advair that has since been approved asBreo.
Advair, which is marketed as Seretide outside the UnitedStates, is used to treat both asthma and chronic lung diseasecaused by smoking.
Although patents on the active ingredients used in themedicine have expired, it remains protected by U.S. patents onthe Diskus inhaler device that run until 2016, after whichcopies may reach the market.
"TRUE" GENERICS
Up until now, many investors had assumed that fullysubstitutable generic versions of Advair were unlikely in theUnited States and instead generics would have to compete asseparate brands.
The FDA's relatively lenient pathway to permitting "true"generics therefore represents a heightened threat.
The new guidelines would require generic drug firms toproduce relatively simple pre-clinical data, followed by a shortclinical trial. In addition, the FDA is only looking for datafrom an asthma trial, even though Advair is also used in chronic obstructive pulmonary disease (COPD).
GSK said it would still be difficult for generics companiesto make an effective substitute for its popular product.
"We believe the manufacture of combination respiratorymedicines such as Advair presents significant hurdles andremains extremely challenging," a spokesman said.
"GSK remains fully committed to Advair and we believe itwill continue to be one of the cornerstones of asthma and COPDmanagement."
Panmure Gordon analyst Savvas Neophytou said GSK's prospectswere heavily dependent on Advair, with some 18 percent ofrevenue and an estimated 25 percent of profit derived from theproduct.
Shares in GSK were down 3 percent at 1,590 pence by 1110GMT, after an earlier low of 1,580.5p on news of the draft FDAguidelines, which are still subject to external comment.
The uncertainty over Advair comes on the same day as a U.S.advisory panel is due to consider another new lung drug calledAnoro from GSK and Theravance. (Editing by Louise Heavens and David Holmes)
Glaxosmithkline (GSK)