GlaxoSmithKline ( GSK - Analyst Report ) and partner Theravance, Inc. ( THRX - Analyst Report ) recently announced that their chronic obstructive pulmonary disease (COPD) candidate, Breo Ellipta has received US Food and Drug Administration (FDA) approval.

The FDA cleared Breo Ellipta as a long-term maintenance therapy of airflow obstruction and for bringing down exacerbations in patients suffering from COPD. Breo Ellipta is expected to be available from the third quarter of 2013.

The FDA approval did not come as a surprise, as last month the FDA’s Pulmonary-Allergy Drugs Advisory Committee (PADAC) voted in favor (9-4) of clearing Breo Ellipta in the US.

As per the existing agreement between Glaxo and Theravance, the approval of Breo Ellipta triggered a milestone payment of $30 million from Theravance.

We note that Glaxo and Theravance are also looking to get another COPD candidate approved. In Feb 2013, the FDA accepted the regulatory application of Glaxo/Theravance’s Anoro. The companies are looking to get the candidate approved in the US as a once daily therapy for treating patients suffering from COPD. A decision from the US regulatory body on Anoro’s marketing application is expected by Dec 18, 2013.

We are positive on Theravance’s pipeline programs in collaboration with Glaxo. We note that Glaxo has a robust pipeline. A number of pipeline-related news is in fact expected in the coming quarters. Given the declining sales from generic competition, we believe Glaxo’s pipeline must deliver.

Glaxo carries a Zacks Rank #3 (Hold) in the short run. Companies that currently look attractive include Athersys, Inc. ( ATHX - Snapshot Report ) and Catalyst Pharmaceuticals Partners Inc. ( CPRX - Snapshot Report ) . Both carry a Zacks Rank #1 (Strong Buy).