(Updates with details, share price)
By Toni Clarke
May 10 (Reuters) - The U.S. Food and Drug Administration has approved a new drug to treat chronic obstructive pulmonary disease, a condition often associated with smoking that can include emphysema, chronic bronchitis, or both.
The drug, Breo, is an inhaled treatment made by British drugmaker GlaxoSmithKline Plc and Theravance Inc of the United States. It consists of a corticosteroid, fluticasone furoate, and a novel long-acting beta-agonist, or LABA, called vilanterol. The product is inhaled through a palm-sized device called Ellipta.
The approval sent Theravance shares up as much as 14.3 percent. Glaxo's U.S. shares rose 1.2 percent.
Breo, or Relvar as it would be called if approved outside the United States, will compete with, and ultimately supplant, GSK's twice-daily asthma and COPD drug Advair, a roughly $8 billion-a-year drug that contains the steroid fluticasone propionate and the long-acting beta-agonist salmeterol.
Analysts on average expect the drug to generate annual sales of $559 million by 2015, according to Thomson Reuters data.
Breo would also compete with AstraZeneca Plc's twice-a-day Symbicort, an inhaled combination of the corticosteroid budesonide, and the long-acting beta-agonist formoterol. Glaxo and Theravance are hoping the once-daily delivery of Breo will make their drug more attractive to patients.
The approval, which follows a more favorable-than-expected review by an FDA advisory panel, will likely increase investor optimism about another, potentially more profitable, COPD drug the two companies are developing called Anoro, an inhaled combination of vilanterol and umeclidinium, a long-acting muscarinic receptor antagonist, or LAMA.
Analysts expect Anoro, if approved, to generate peak annual sales of nearly $1.4 billion, according to Thomson Reuters.
The approval of Breo comes just weeks after Theravance said it would split into two publicly traded companies, separating the more advanced respiratory drugs it is developing with Glaxo from its other operations. The move fueled speculation that Glaxo, which owns 27 percent of Theravance, could eventually buy Theravance's most lucrative products.
After the split, the company holding the respiratory drugs franchise will be called Royalty Management Co. The second company, called Theravance Biopharma, will focus on development of drugs for rare diseases.
Shares of Theravance were up 8.7 percent at $34.00 in midday trading on the Nasdaq. Earlier in the day they rose as high as $35.80. Glaxo's shares were up 1.1 percent at $51.33 in New York. (Reporting by Toni Clarke in Washington; Editing by Matthew Lewis and Steve Orlofsky)