UPDATE 1-Lilly profit rises, helped by lower taxes

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NEW YORK, July 24 (Reuters) - Eli Lilly and Co (LLY.N: Quote, Profile, Research, Stock Buzz) said on Thursday that second-quarter earnings rose on higher sales of its prescription drugs and sharply lower taxes.

The Indianapolis drug maker said it earned $959 million, or 88 cents per share, compared with $664 million, or 61 cents per share, a year earlier, when it took big merger-related charges.

Excluding special items, Lilly earned 99 cents per share. Analysts on average had expected $1.00, according to Reuters Estimates.

Company sales rose 11 percent to $5.15 billion, a bit higher than the $5.03 billion Reuters Estimates projection, fueled by higher sales of depression drug Cymbalta, cancer treatments Gemzar and Alimta, anti-impotence pill Cialis and diabetes medicines Humalog and Humulin.

Global sales of the company's flagship product, schizophrenia drug Zyprexa, edged up 2 percent to $1.24 billion, as U.S. revenue continued to be hurt by concerns that the medicine causes weight gains that can lead to diabetes.

Lilly cut its 2008 profit forecast due to special charges in the second quarter. But excluding special items, the drugmaker stuck to its earlier forecast of $3.85 per share to $4 per share.

The company in December asked U.S. regulators to approve its prasugrel blood clot preventer and is counting on its sales to help offset expected plunging revenue from Zyprexa, when it faces generic competition in October 2011.

Analysts expect the U.S. Food and Drug Administration to render a decision on prasugrel by September, but some are concerned the agency may withhold its approval for months or years because of bleeding risks seen with the drug in clinical trials.