* Sales plunge for Lilly's Zyprexa, Bristol's Plavix
* Results highlight urgency for successful new treatments
* Lilly shares down 1.5 percent, Bristol-Myers falls 0.8 pct
(Adds analyst comment, updates share prices)
Oct 24 (Reuters) - Eli Lilly and Co and Bristol-Myers Squibb Co posted lower-than-expected profit as their former top medicines were pounded by cheaper generics and sales of other products disappointed, sending their shares lower.
Both drugmakers said the shortfalls would not change their profit expectations for the full year. But the disappointing results illustrated the urgency behind developing big-selling new medicines to offset declining revenue from older brands.
Sales of Lilly's Zyprexa schizophrenia drug fell 68 percent to $375 million in the quarter. Demand for Bristol-Myers' blood clot preventer, Plavix, which had been the world's second-biggest medicine until its U.S. patent lapsed in May, plunged 96 percent to $64 million.
Lilly earned $1.33 billion, or $1.18 per share, in the third quarter. That compared with $1.24 billion or $1.11 per share a year earlier. Excluding special items, the Indianapolis drugmaker earned 79 cents per share. Analysts on average expected 83 cents, according to Thomson Reuters I/B/E/S.
Its revenue fell 11 percent to $5.44 billion, below Wall Street estimates of $5.62 billion, hurt also by weak sales of its insulin drugs and animal health products.
``Insulin and animal health misses are major concerns,'' said Jefferies and Co analyst Jeffrey Holford. The two product lines are generally reliable drivers of earnings growth. Results were also weighed down by a 5 percent increase in research spending, to $1.34 billion.
Shares of Lilly were down 1.5 percent at $51.11 on Wednesday afternoon, while Bristol-Myers shares were down 0.8 percent at $32.98. Lilly's stock has gained 19 percent since late August, when it said an experimental drug for Alzheimer's disease might be able to slow cognitive decline for patients with mild symptoms. The modest signal of improvement has revived investor hopes that the drug, solanezumab, could still gain regulatory approval for a disease that has no real treatment.
Bristol-Myers shares have fallen about 7 percent this year, in part because of disappointing study results for a high-profile experimental treatment for hepatitis C called BMS-986094. In the meantime, it is developing promising drugs for cancer, diabetes and blood clots.
Bristol-Myers posted a loss of $711 million, or 43 cents per share in the third quarter, including a charge of $1.8 billion for the failed trial of the hepatitis treatment. In the year-earlier quarter the company earned $969 million, or 56 cents per share.
Excluding special items, Bristol-Myers earned 41 cents per share in the latest quarter. Analysts, on average, had expected 42 cents, according to Thomson Reuters I/B/E/S.
``While the focus of the Bristol story remains the company's next-generation product portfolio, the company reported a fairly uninspiring third quarter,'' J.P. Morgan analyst Chris Schott said in a research note. He cited disappointment with sales of ``core franchises,'' including HIV treatment Reyataz and Baraclude for treatment of hepatitis B.
Schott said results would have been even worse if not for an unexpectedly low tax rate for Bristol-Myers in the quarter.
Barclays analyst Tony Butler said regulatory delays for Eliquis, a potential $4 billion-a-year blood clot preventer being developed with Pfizer Inc, have stymied an important new revenue stream.
But he said Eliquis could be approved before the end of the year and that a roster of promising experimental cancer drugs - especially a so-called PD-1 inhibitor now in late-stage trials - could reward patient investors.
``We're seeing an emerging oncology portfolio and it's one of the best,'' Butler said.
Company sales, which were also hit by generic competition for the company's Avapro blood pressure treatment, fell 30 percent to $3.74 billion, well below Wall Street expectations of $3.98 billion.
Bristol-Myers stood by its full-year earnings forecast of between $1.90 and $2.00 per share, excluding one-time items, and guided to the upper end of that range. That would reflect a decline of 12 to 17 percent from 2011 earnings.
(Reporting by Ransdell Pierson in New York; editing by Michele Gershberg, Lisa Von Ahn and Matthew Lewis)