UPDATE 3-Celgene 2nd-qtr profit rises; ups 2011 forecast

* Non-GAAP EPS 89 cents/shr vs 86 cents/shr estimate

* Revenue rises to $1.18 bln vs $1.12 bln view

* Revlimid sales $795 mln vs $771 mln view

* Increases non-GAAP 2011 outlook to $3.45-$3.55/shr

* Shares rise 3.7 pct in mid-morning trading (Updates share price, adds conference call details)

By Toni Clarke

BOSTON, July 28 (Reuters) - Celgene Corp (CELG.O) posted higher-than-expected second-quarter earnings on Thursday, driven by sales of its cancer drugs Revlimid and Vidaza. It also increased its full-year forecast, sending the company's shares up 3.7 percent to $61.66 in mid-morning trading.

Sales of Revlimid, the company's drug to treat multiple myeloma and most important growth driver, rose 35 percent to $795 million as physicians increasingly keep patients on the drug for longer periods of time.

Data from several clinical trials suggest patients do better when treated early and when they stay on the drug as a maintenance therapy following other courses of treatment.

Revlimid is currently approved to treat patients who have failed to respond to previous therapies. Celgene is seeking approval in Europe and plans later to seek approval in the United States, to market the drug for earlier and longer use.

Investors are closely watching the actions of European regulators who are considering whether Revlimid's benefits outweigh its risks after clinical trial data showed the drug could be linked with a higher rate of second primary malignancies. They asked Celgene to respond to a number of questions, which Celgene has done.

Robert Hugin, the company's chief executive officer, told analysts on a conference call that Celgene is also continuing to respond to questions raised as part of its regulatory filing for an expanded package label, and has seen nothing unusual in the questions asked. While the safety review, known as Article 20, and the filing, are separate, Hugin said it is unlikely regulators would approve the label expansion until the safety review is complete.

Net profit in the quarter rose to $279 million, or 59 cents a share, from $155 million, or 33 cents a share, a year ago.

Excluding one-time items, the company earned 89 cents a share. Analysts on average were expecting earnings of 86 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 38 percent to $1.18 billion, compared with analyst expectations of $1.12 billion. The increase was driven by market share gains, geographic expansion and increased duration of therapy for Revlimid and Vidaza. Revenue was helped somewhat by a delay in the launch of a generic rival to Vidaza, which lost patent protection in May. So far no competition has materialized.

Sales of Vidaza rose 23 percent to $162 million, compared with an average analyst forecast of $146 million.

Celgene said it expects 2011 sales of Revlimid to rise by about 30 percent to $3.15 billion to $3.25 billion. Previously it had forecast Revlimid sales of $3.05 billion to $3.15 billion.

Sales of Abraxane, the company's drug to treat metastatic breast cancer, were $95 million.

The company expects revenue in 2011 to rise to between $4.60 billion and $4.70 billion. Previously it forecast revenue to range between $4.45 billion and $4.55 billion.

The company forecasts 2011 earnings excluding one-time items of $3.45 to $3.55 a share. Previously the company forecast full-year earnings of between $3.35 and $3.40 a share. (Reporting by Toni Clarke, editing by Maureen Bavdek and Gunna Dickson)