* FDA approves Arzerra for chronic lymphocytic leukaemia
* Move expected after positive FDA panel review in May
* Approval triggers $23 million payment to Genmab from Glaxo
* Genmab shares up 6 percent, Glaxo flat
(Updates with shares, analyst comments)
By Ben Hirschler and John Acher LONDON/COPENHAGEN, Oct 27 (Reuters) - GlaxoSmithKline and Genmab have won U.S. approval to sell their leukaemia drug Arzerra, marking a small positive for the British group and a major milestone for its smaller Danish partner.
The green light from the Food and Drug Administration follows an accelerated approval process and will trigger a payment of approximately $23 million to Genmab from Glaxo.
Arzerra, an antibody drug, is approved for patients with chronic lymphocytic leukaemia (CLL) who do not respond to Genzyme's Campath or the chemotherapy drug fludarabine.
"The approval of Arzerra marks a key milestone for Genmab as it is our first antibody to reach the market," Genmab Chief Executive Lisa Drakeman said in a statement.
The regulatory decision had been widely expected, following a positive recommendation from an FDA panel of experts in May.
Genmab shares rose 6 percent in early trade on Tuesday -- a modest rise by the yardstick of volatile biotech stocks. Analysts at Jefferies said the response was tempered by ongoing funding concerns and uncertainty over Arzerra's sales ramp-up.
The drug, which causes the body's immune system to fight against normal and cancerous B-cells, will be available for prescription use in the coming weeks.
Glaxo, whose shares were barely changed by 0815 GMT, bought global rights to Arzerra in December 2006 in a deal worth up to $2.1 billion, a record sum for a biotech product agreement at the time.
The world's second biggest drugmaker is also banking on Arzerra working in other diseases beyond CLL.
But hopes for its use in patients with another blood cancer called non-Hodgkin's lymphoma (NHL) were dealt a blow in August when it failed to help patients as much as expected in a clinical trial.
Current consensus analyst forecasts for Arzerra, which is also being developed for rheumatoid arthritis, suggests annual sales will reach $560 million in 2013, according to Thomson Pharma.
"Although we expect the shares to react positively today, we do not expect this to be sustained until Genmab can deliver a clear strategy for expanding on Arzerra's initial limited indication within a reasonable timeframe," said Piper Jaffray analyst Richard Parkes.
Genmab and Glaxo have been hoping to position Arzerra as a rival to Roche and Biogen Idec's blockbuster treatment Rituxan in the treatment of NHL.
Both Arzerra and Rixtuxan belong to a class of medicines known as anti-CD20 antibodies. (Editing by David Cowell and Jon Loades-Carter)