UPDATE 1-Lilly sees approval soon for long-acting Zyprexa

(Adds details on Lilly expectations, Zyprexa background)

NEW YORK, May 29 (Reuters) - Eli Lilly and Co (LLY.N) said on Thursday a long-acting form of its schizophrenia drug Zyprexa will likely become available in the United States in the "near future," based on favorable signals from U.S. regulators.

Chief Executive John Lechleiter said Lilly's optimism is based on recent meetings between the company and the Food and Drug Administration, which in February had rejected the injectable form of Lilly's biggest-selling medicine.

The FDA, in issuing its "not approvable" letter, had said it needed more information to better understand the risk and underlying cause of excessive sedation seen in about 1 percent of patients given the injectable formulation in clinical trials.

Based on recent meetings with FDA officials, Lechleiter said Lilly thinks it can satisfy the agency's concerns without conducting new clinical trials of the long-acting formulation and is hopeful it will soon become available to patients. He made the comments at Sanford Bernstein & Co's Strategic Decisions Conference.

The basic form of Zyprexa had 2007 sales of $4.8 billion, but it will lose U.S. patent protection in 2011 and face competition from cheaper generics. Although the long-acting formulation would have years more of patent life, some analysts have said it has limited sales potential because it would be largely geared to hospitalized patients. (Reporting by Ransdell Pierson; editing by Jeffrey Benkoe and Braden Reddall)