By Sriparna Roy

(Reuters) -The U.S. Food and Drug Administration has approved Elanco Animal Health's skin disease treatment for dogs, the health regulator's website showed on Thursday, sending the company's shares up 2% in afternoon trade.

The oral drug, Zenrelia, aims to control pruritus, or itching, associated with allergic dermatitis and to control atopic dermatitis in dogs that are at least 12 months old.

Zenrelia, an immunosuppressant, is administered once daily, with or without food.

Elanco considers Zenrelia as one of its potential blockbusters. It is the company's first product in the market related to skin disease treatments for dogs, that include Zoetis' oral treatment Apoquel.

In a head-to-head study conducted in 338 dogs, Zenrelia showed greater relief from itching and skin lesions over time than Apoquel, Elanco said.

The study was conducted by the company for the drug's submission, to be reviewed, in the European Union.

The company plans to launch Zenrelia in the coming days, Elanco CEO Jeff Simmons said.

Elanco will price Zenrelia around 20% lower than Apoquel, Simmons said, adding that there will be some additional savings as Elanco's drug is dosed once-daily, while Apoquel is dosed twice-daily in the initial phase of treatment.

Zoetis did not immediately respond to a request for a comment on pricing.

Zenrelia belongs to a class of drugs known as JAK inhibitors, which block inflammation-causing enzymes known as Janus kinases.

In June, Elanco cautioned that the boxed warning on the drug label could slow its adoption in the United States.

The FDA approval for Zenrelia carries a boxed warning stating that dogs should not be vaccinated at least 28 days before and after treatment with the drug, due to the risk of fatal vaccine-induced disease and inadequate immune response to vaccines.

(Reporting by Sriparna Roy and Puyaan Singh in Bengaluru; Editing by Alan Barona)