A new GlaxoSmithKline (NYSE:GSK) respiratory drug has received regulatory approval for treatment of a lung condition that is the third-leading cause of death in the United States.

Food and Drug Administration approval of Anoro Ellipta is the second approval in the drug partnership between GSK and Theravance (NASDAQ:THRX). Anoro is approved to treat chronic obstructive pulmonary disease, an umbrella term for emphysema and chronic bronchitis. The condition is the third-leading cause of death in the United States. Anoro Ellipta is not approved for treating asthma.

Britain-based GSK, which operates its U.S. headquarters in Research Triangle Park, said that Anoro’s U.S. launch is targeted for the first quarter of 2014. Under the drug partnership, Theravance must make a $30 million milestone payment to GSK for the FDA approval. After the drug’s U.S. launch, Theravance must make another $30 million milestone payment to GSK.

Anoro, a once-daily dry powder inhaler, may generate $1.2 billion in sales in 2016, according to the average of eight analysts’ estimates compiled by Bloomberg. COPD is a progressive disease, often caused by smoking, that makes it difficult to breath.

“Anoro Ellipta works by helping the muscles around the airways of the lungs stay relaxed to increase airflow in patients with COPD,” Curtis Rosebraugh, director of the FDA Office of Drug Evaluation II, said in the agency’s statement.

The drug carries a boxed warning that one of its main ingredients can increase the risk of asthma-related death. London-based Glaxo and Theravance, based in South San Francisco, California, gained approval in May for Breo Ellipta, which combines one of the medicines in Anoro with a steroid.

Theravance fell less than 1 percent to $36.04 at 12:01 p.m. in New York. Glaxo lost 1.1 percent to 1,548.50 pence at the close of trading in London.

Royalty Payments

Theravance will earn tiered royalties of 6.5 percent to 10 percent on Anoro sales, Michael Aguiar, the company’s chief financial officer, said in an interview with Bloomberg News when the drug was considered at a meeting of FDA advisers in September. The advisers overwhelmingly supported Anoro approval.

Anoro is a combination of vilanterol, a long-acting beta agonist or LABA, and umeclidinium, a long-acting muscarinic antagonist or LAMA, used with Glaxo’s Ellipta inhaler. Breo’s active ingredient is vilanterol.

Other long-acting COPD treatments include Pfizer Inc. and Boehringer Ingelheim GmbH’s Spiriva. Anoro is expected to compete against other combination products from Novartis and Forest Laboratories. Novartis is researching a LABA/LAMA combination for COPD called QVA149. Basel, Switzerland-based Novartis said in July that it expects to file for U.S. approval at the end of 2014.

Forest Laboratories and Almirall SA, as well as Boehringer Ingelheim and AstraZeneca Plc also are studying LABA/LAMA combinations.

(Bloomberg News contributed to this report)