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April 16 (Reuters) - The U.S. Food and Drug Administration approved on Thursday the first generic version of Teva Pharmaceutical Industries Ltd's top-selling multiple sclerosis drug, Copaxone.

The generic drug, Glatopa, was developed collaboratively by Sandoz, a unit of Swiss drugmaker Novartis AG, and Momenta Pharmaceuticals Inc, for treating patients with relapsing forms of the chronic neurodegenerative disease.

The companies were still involved in patent litigation, and Sandoz spokesman Sreejit Mohan said the company would not comment on commercial launch plans.

Momenta said the 20 mg generic version of the blockbuster drug could be labeled "substitutable," meaning prescriptions for Copaxone could be automatically switched to the generic.

Teva's U.S. sales of Copaxone totaled $3.1 billion in fiscal 2014, according to ISI Group analyst Umer Raffat. The company has been working to switch patients to a 40 mg formulation of the drug that still has patent protection, Raffat said.

Shares of Teva were down 3.3 percent at $63.81, while shares of Momenta surged 9 percent to $17.55 on the Nasdaq exchange. Shares of Novartis were up about half a percentage point.

Momenta said it would earn a $10 million payment upon FDA approval of Glatopa, as part of up to $140 million in total milestone payments.

"Health care professionals and patients can be assured that FDA-approved generic drugs have met the same rigorous standards of quality as the brand-name drug," Janet Woodcock, director of the FDA's Center for Drug Evaluation and Research, said in a statement.

Woodcock said the generic drug was "as safe and effective as the brand name product." (Reporting by Deena Beasley in Los Angeles and Natalie Grover in Bengaluru; Editing by Don Sebastian, Peter Galloway and Bernadette Baum)