GlaxoSmithKline PLC (GSK, GSK.LN) Thursday said a German revoked its patent for inhaled product Advair, handing a victory to generic drug makers Mylan dura GmbH, Hexal AG, Neolab Ltd., and IVAX International B.V. and highlighting the worldwide generic threat to Glaxo's blockbuster lung treatment.

The ruling by Germany's Federal Patents Court relates to the combination of Advair's active ingredients salmeterol and fluticasone propionate.

Glaxo, the U.K.'s biggest drug maker, said the Munich-based court's decision relates solely to the German combination patent for Viani, Advair's German brand name, and is not binding in any other jurisdiction.

The decision is the conclusion to a hearing that was conducted in February.

"This is not the end and we will be considering whether to appeal to a higher court," a spokeswoman at Glaxo said.

Glaxo also owns a number of other patents in Germany relevant to Advair, including the Diskus dry powder inhaler and HFA aerosol formulation patents which expire in 2011 and 2012 respectively. The company in a statement noted there are significant technical hurdles and complexities associated with the introduction of inhaled respiratory products.

The trial is part of a complex legal struggle between Glaxo and a group of generic drugmakers which hope to sell copies of the two-in-one inhaler for asthma and chronic obstructive pulmonary disease, or "smoker's lung". Teva bought Ivax in 2006 $7.4 billion. Hexal is part of Novartis' Sandoz generics unit.

Advair, which last year had sales of GBP5 billion, representing 18% of group turnover, is seen as crucial to Glaxo's future prospects.

Shares in Glaxo at 1300 GMT were down 1.4% at 1,161 pence, in line with a lower London market, but the stock was up roughly 10% from year-ago levels.

Analysts noted the German court decision could benefit U.K. drug developer Vectura Group PLC (VEC.LN), which is believed to be developing a generic version of Advair with Novartis's Sandoz unit.

The loss of the patent paves the way for Vectura and Sandoz to launch their version in Germany, said FinnCap analyst Keith Redpath, who added the two companies wouldn't be hamstrung by the Diskus patent because they are believed to have developed their own device using Vectura's technology.

Chirag Talati at broker Noble Execution said the patent decision means Vectura and Sandoz could be in a position to launch a generic Advair by late 2011.

Talati added the German court victory may spur Sandoz to be more aggressive in challenging the patent in other European countries.

Vectura and Sandoz have never formally confirmed they are working on a version of the GlaxoSmithKline drug. But observers agree a project known as VR315 is almost certainly generic Advair.

At 1300 GMT, shares in Vectura were 1.75 pence or 4.8% higher at 38.25 pence. The stock has lost 49% year-to-date over investor concerns about VR315 making it to market in the U.S., where the regulatory pathway for generic versions of respiratory medicines isn't clear.

Company Web site: www.gsk.com

-By Sten Stovall, Dow Jones Newswires; +44 207 842 9292; sten.stovall@dowjones.com