* Says tax changes allow use of $9 bln in overseas cash
* Diabetes treatment Trulicity beats sales estimates
* Incurs charges related to tax, cost cutting
* Shares rise 2 pct premarket (Adds shares, details on strategy, sales)
Jan 31 (Reuters) - Eli Lilly and Co reported a bigger-than-expected quarterly profit on Wednesday, driven by demand for its newer diabetes and psoriasis treatments, and raised its adjusted earnings forecast for 2018 due to the recent U.S. tax changes.
The company's shares rose 2 percent to $88 in light premarket trading.
The drugmaker said it may now have access to over $9 billion in cash held by its global units due the new tax rules, but gave no indication about what it planned to do with the money.
"Historically, Lilly has not been one of those companies that have done a lot of large deals like a Pfizer, or Merck or JNJ... But you've got a very new management team ... and maybe they'll get a little more aggressive," Credit Suisse analyst Vamil Divan said.
Lilly is betting on newer growth drivers such as Trulicity and Taltz as older drugs Humalog and Cialis face rising competition.
Sales of the recently launched diabetes drug Trulicity nearly doubled to $649 million in the fourth quarter, beating consensus estimates of $580 million, according to Barclays.
Revenue from psoriasis treatment Taltz, which Lilly expects to launch in a new indication, nearly tripled to $172.5 million in the quarter, but slightly missed consensus of $179 million.
Sales in Lilly's Elanco animal health business, which the drugmaker is considering selling, fell about 6 percent to $790.9 million. Barclays consensus revenue estimate was $838 million.
Additional cash from a possible sale of the business and the new tax laws could provide the drugmaker with cash for its biggest M&A deal yet, Divan said.
Indianapolis-based Lilly raised its 2018 adjusted earnings per share guidance to $4.81 to $4.91, just over a month after forecasting a range of $4.60-$4.70.
However, the company incurred $1.94 billion in charge in the quarter related to the overhaul of the U.S. tax code.
The company also recognized asset impairment, restructuring and other charges of $1 billion, primarily due to its cost-reduction initiative, including the U.S. voluntary early retirement program.
The charges pushed Lilly to a net loss of $1.66 billion, or $1.58 per share, for the three months ended Dec. 31, compared with a year-ago profit of $771.8 million, or 73 cents per share.
Excluding items, it earned $1.14 per share.
Revenue rose nearly 7 percent to $6.16 billion.
Analysts on average had expected a profit of $1.07 per share and revenue of $5.94 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Tamara Mathias in Bengaluru; Editing by Sriraj Kalluvila)