UPDATE 1-Wyeth says court approves Effexor deal with Impax

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NEW YORK, July 16 (Reuters) - Wyeth WYE.N said on Wednesday a federal court has approved a settlement with Impax Laboratories Inc that will allow Impax to sell a generic capsule form of Wyeth's Effexor XR antidepressant by June 2011.

Wyeth said all conditions of the settlement were approved by U.S. District Court for the District of Delaware.

Impax will be required to pay Wyeth a royalty on sales of its generic, Wyeth said.

Moreover, the deal will allow Impax to use its neurology-focused sales force to promote a yet-unidentified Wyeth product, Wyeth said, adding that other terms of the settlement were confidential.

Effexor XR is Wyeth's biggest product, with annual sales of $4 billion, but it is expected to lose its U.S. marketing exclusivity within two years.

Under a separate, earlier settlement between Wyeth and Teva Pharmaceutical Industries Ltd (TEVA.O), Teva will be allowed to launch a generic form of Effexor XR in July 2010, or earlier, if another generic beats it to market. (Reporting by Ransdell Pierson; editing by Jeffrey Benkoe)