* Celltrion wins U.S. approval for biosimiilar of cancer drug
* Shares in S.Korean drugmaker rise 3.4 pct (Updates with Celltrion share price, comment)
Nov 28 (Reuters) - Celltrion Inc's Truxima on Wednesday became the first biosimilar to Roche Holding AG's $7-billion-per-year cancer drug Rituxan to be approved in the United States to treat non-Hodgkin's lymphoma.
The approval by the U.S. Food and Drug Administration is part of the agency's plan to encourage development of cheaper biosimilars amid rising prices of prescription medicines.
Celltrion shares had gained 3.4 percent as of 0023 GMT, versus the wider market's 1 percent rise.
The FDA has so far approved 14 other biosimilars, including copycats of top-selling drugs like AbbVie Inc's Humira and Amgen Inc's Neulasta.
Truxima's approval was largely expected as the drug had won unanimous backing from an FDA advisory panel in October.
The FDA had earlier declined to approve the drug, citing issues related to a certain manufacturing facility.
Like Rituxan, Truxima's label contains a boxed warning - the agency's harshest - that highlights several health risks including a rare, serious brain infection and liver damage.
Drugmakers are only able to produce biosimilar versions of complex drugs such as Rituxan since the molecules are made inside living cells and cannot be exactly replicated.
Truxima, already approved in Europe, will be sold in the United States and Canada in partnership with Israel's Teva Pharmaceutical Industries.
"With this approval, Celltrion has entered the United States, the world's biggest Rituxan market, as the first mover and expects to gain a fairly early edge in the market," Celltrion said in a statement.
Roche's drug, approved in 1997, is marketed as Rituxan in the United States, Japan and Canada and as MabThera elsewhere.
Apart from Rituxan, Roche, the world's biggest producer of cancer drugs, is also facing competition from cut-price biosimilars of its two other best-selling drugs Herceptin and Avastin. The Swiss-based drugmaker has stepped up cost cuts in an efficiency drive to cushion the blow.
Earlier this month, Novartis International AG said it would no longer pursue U.S. regulatory approval for its biosimilar of Rituxan after the FDA sought additional information. (Reporting by Manas Mishra and Tamara Mathias in Bengaluru; Additional reporting by add Hayoung Choi in Seoul; Editing by Sriraj Kalluvila and Stephen Coates)