Eli Lilly and Co forecast 2010 earnings in line with Wall Street expectations, but suggested earnings could fall after its biggest drugs lose patent protection between 2011 and 2014.

Lilly's 2010 and longer-term guidance points to a company with continued strong near-term results but a significantly less certain long term profile, JP Morgan analyst Chris Schott said in a research note.

The drugmaker said in a release on Thursday that it expects earnings of $4.65 to $4.85 per share next year. Analysts' average forecast is $4.74, according to Thomson Reuters I/B/E/S.

Lilly's outlook, which excludes any potential impact from U.S. healthcare reform, reflects growth of 5.2 percent to 9.7 percent over Wall Street forecasts for 2009.

The Indianapolis-based company repeated that it expects low-double-digit annual earnings-per-share growth between 2007 and 2011, although most of that period is already in the rear-view mirror.

Wall Street is intently focused on the patent cliff years 2011-14, when Lilly faces generic competition for schizophrenia drug Zyprexa, antidepressant Cymbalta, cancer drug Gemzar and osteoporosis treatment Evista.

Although the company provided a general financial outlook for the patent-cliff period, it did not predict whether profit would increase or fall, or by what magnitude, during that period. But the numbers suggested possible sharp profit declines.

Lilly said it expects annual revenue of at least $20 billion in the years 2012 to 2014 and beyond. Wall Street expects company revenue this year of about $21.5 billion.

Under this scenario, net income would exceed $3 billion in the patent-cliff years and beyond, the company said. Lilly is expected to have net income this year in the $4.85 billion range.

Lilly said it would not resort to a big merger as a means of withstanding looming generic competition.

Many companies are seeking to lower risk by reducing their focus on innovative medicines; this is not our path, Chief Executive John Lechleiter said in the release, ahead of a meeting later Thursday morning with hundreds of analysts and fund managers in New York.

He was referring to the kinds of big mergers that can produce significant cost savings for acquiring drugmakers, thereby boosting profits despite generic competition.

But such mega-mergers have had poor records in developing innovative new drugs. Pfizer Inc

, for instance, has discovered few compelling medicines of its own in the past decade, after buying Pharmacia and Warner-Lambert. With another patent crisis of its own just two years away, Pfizer earlier this year bought another U.S. rival, Wyeth.

Lilly is known for its strong research bent -- Lechleiter himself was a company scientist before climbing the corporate ladder -- and expects to have 10 medicines in late stages of testing by 2011.

The company on Thursday said it plans to launch two new medicines per year beginning in 2013. But analysts have cautioned that its most promising experimental treatments are for Alzheimer's disease and cancer -- the types of drugs that often fail along the cumbersome research path.

Lilly shares were down $1.11 at $35.45 in morning activity on the New York Stock Exchange.

(Reporting by Ransdell Pierson and Lewis Krauskopf; Editing by John Wallace and Maureen Bavdek)