UPDATE 2-Mylan surges, Teva slumps after FDA okays Copaxone copy

(Adds sales estimates; updates shares)

Oct 4 (Reuters) - Shares in Mylan jumped more than 16 percent in premarket trading on Wednesday after the U.S. Food and Drug Administration approved the drugmaker's generic version of Teva blockbuster multiple sclerosis drug Copaxone.

The surprise approval came a day after the health regulator said it would introduce a slew of measures to speed to market generic versions of complex drugs in an effort to address the rising cost of pharmaceuticals.

U.S. listed shares of Israel-based Teva sank 13.7 percent in response while Mylan was the top gainer on the S&P 500 before the opening bell.

The FDA approved both doses - 20 mg and 40 mg - of Mylan's version of Copaxone, which generated global sales of $1.02 billion for Teva in the second quarter of this year.

"Approval represents a meaningful positive for Mylan," JPMorgan analysts said in a note, adding it should push 2017 and 2018 earnings per share higher.

Analysts from Wells Fargo said the new drug would add 13 cents per share to Mylan earnings per quarter, assuming the FDA grants the company a 180-day exclusivity period post-approval.

Mylan, which had missed out on approval for the drug twice this year, had lowered its earnings forecast in August citing a delay in launching key new drugs and eroding prices of generics.

Novartis' unit Sandoz and Momenta Pharmaceuticals already sell a generic version of 20 mg Copaxone, and are developing a version of the 40 mg dosage.

But Momenta's difficulties in getting the higher-dose version approved had dampened expectations for Mylan before Tuesday.

JPMorgan analysts said the decision added up to full generic competition for Teva 9 to 12 months ahead of previous Wall Street expectations.

"The news adds to an already challenging near-term setup for the story, with the company's U.S. generic business under pressure, high levels of leverage, and limited clarity on drivers of a broader recovery in results," the brokerage said.

Estimates of market share for Mylan reached as high as 40 percent of the 40 mg market, with Wells Fargo forecasting sales at about $172 million per quarter and a resulting drop in Teva's full-year earnings guidance to well below $3 per share in 2018.

Last month, Teva said it was looking to team up with other drugmakers to fund some of its development pipeline as it struggles with debts and expiring patents. The drugmaker's speciality business has been losing ground since Copaxone ran out of patents.

Mylan said it expected to start shipping the generic drug very soon and that the FDA approval letter said the company might be eligible for 180 days exclusivity on the drug.

Mylan spokeswoman Julie Knell declined to comment beyond the release at this time. (Reporting by Divya Grover in Bengaluru; Editing by Savio D'Souza and Patrick Graham)