A GlaxoSmithKline logo is seen outside one of its buildings in west London, February 6, 2008. (Toby Melville/Reuters)

LONDON (Reuters) -
GlaxoSmithKline Plc does not expect to
win U.S. approval for its key cervical cancer vaccine Cervarix
until late 2009, marking a further delay for the product.

The delay, announced on Monday, is good news for Merck & Co
Inc, which sells the rival blockbuster vaccine Gardasil. Its
stock jumped 3 percent while Glaxo shares were flat in a
sharply higher market for European drugmakers.

Glaxo said it had responded to outstanding questions about
Cervarix raised by the U.S. Food and Drug Administration but
had decided to augment its application with results from a
further Phase III study, called HPV-008.

Data from this trial are expected to be submitted to the
U.S. regulator in the first half of 2009 and an FDA decision on
the application is anticipated up to six months later.

“Study 008 is a key study that will be completing later
this year, and we expect the final results will strengthen the
U.S. label for Cervarix,” Barbara Howe, Glaxo's head of North
American vaccine development, said.

Interim data from the HPV-008 study were filed in the
original application for the vaccine in March 2007. Glaxo added
it did not expect the FDA to require new clinical studies for
approval.

Cervarix is arguably the most important new product for
Glaxo this decade but its path to market in the United States
has been problematic, with the FDA delaying approval last
December, pending more information.

Glaxo said in February it would reply to the U.S. watchdog
before the end of the second quarter.

MERCK'S GAIN

Few analysts had expected Cervarix to win a U.S. green
light this year but several had been banking on a 2009
approval.

Deutsche Bank analysts said it now seemed unlikely Cervarix
would be available and reimbursed in time for the 2009
back-to-school season in the United States.

Tim Franklin of Dresdner Kleinwort, who had penciled in
U.S. Cervarix sales of $150 million in 2009, said he would
revise his sales forecasts.

“I don't think the FDA will rush to approve it — I don't
think we will see Cervarix on the market until 2010 now,” he
said.

Cervarix is approved in Europe but U.S. sales will be
pivotal to its commercial success.

It competes against Merck's Gardasil, which is available on
both sides of the Atlantic, and is already established as
$1-billion-plus product, with global revenues of $390 million
in the first quarter of this year.

Both vaccines are designed to be given to girls and young
women to protect against cancer-causing strains of the sexually
transmitted human papillomavirus (HPV).

But the two vaccines have different properties. In
particular, Cervarix uses a novel adjuvant, or additive, which
Glaxo says makes it longer lasting.

Analysts, however, say the FDA is extremely cautious about
approving new adjuvants because of the theoretical risk of side
effects, increasing the regulatory hurdle for Glaxo's vaccine.

Morgan Stanley analysts predicted in a note last month that
Cervarix would not get approved in the United States until
2014.

(Reporting by Ben Hirschler; Editing by David Cowell and
Erica Billingham)