Zyprexa

Moskowitz also said Lilly's injectable insulin franchise is declining at more than 9 percent per year, and will face pressure from Sanofi-Aventis' recently released Apidra.

Merrill Lynch analyst David Risinger said Lilly's key pipeline products appear high-risk.

He said Lilly's data from late-stage trials of Arxxant _ a drug for the treatment of diabetes-related vision loss _ was not robust and may not get timely clearance from the Food and Drug Administration in 2006.

He also said anti-clotting drug Prasugrel faces a tough challenge, as it needs to show superiority to Sanofi-Aventis' Plavix to hit its primary endpoint in Phase III trials.

In downgrading the stock to "Neutral" from "Buy", Risinger predicted 2006 to 2009 per-share earnings growth of 8 percent versus the Wall Street consensus estimate of 10 percent.

Friedman's Moskowitz, who has a $53 price target on Lilly, praised competitor Wyeth, noting that two new product approvals are expected this year.

He boosted his Wyeth price target to $54 from $51.

Wyeth shares were recently down 22 cents to $48.95 in afternoon trading on the New York Stock Exchange.

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