The drug maker Eli Lilly said second-quarter earnings fell 11 percent as it spent more on marketing and research to prepare for a wave of patent expirations.

The company said on Thursday that marketing, selling and administrative expenses climbed 16 percent to $2.04 billion as the company supported introductions of Tradjenta and Bydureon, both type 2 diabetes treatments. Research expenses also rose because of a collaboration agreement with a German drug maker.

A 9 percent revenue increase buoyed by strong sales from several drugs blunted some of those expenses, and Lilly raised its 2011 earnings forecast.

Lilly said it earned $1.2 billion, or $1.07 a share, in the three months that ended June 30. That’s down from the $1.35 billion, or $1.22 a share, Lilly earned in the same quarter last year. Revenue rose 9 percent to $6.25 billion.

Excluding restructuring charges, the company’s profit was $1.18 a share. Analysts surveyed by FactSet expected, on average, earnings of $1.19 a share on $6.01 billion in revenue.

Lilly said the health care overhaul reduced earnings by about 12 cents a share in the quarter. Sales for Lilly’s best-selling drugs, the antipsychotic Zyprexa and the antidepressant Cymbalta, climbed.

But sales for the cancer treatment Gemzar tumbled 62 percent to $112.4 million, including a 91 percent drop in the United States, after it lost patent protection.

Patent expirations will sweep over the pharmaceutical industry in the next few years and hit Lilly especially hard. The drug maker loses American patent protection of Zyprexa in October, a month after it loses protection in most of Europe. Lilly said it expected a “rapid and severe” sales decline for the drug, which generated $5 billion last year.

By 2014, Lilly will have lost patents protecting drugs that generated 64 percent of its American product sales last year.

Lilly also plans to cut costs by $1 billion by the end of this year.

For 2011, Lilly now expects adjusted earnings of $4.25 to $4.35 a share, up from $4.15 to $4.30 a share. Analysts expect $4.29 a share.

Article source: http://feeds.nytimes.com/click.phdo?i=336f411b9c0931c67d718c10f1ed805e