Updated from April 13

Eli Lilly

(LLY) - Get Report

fell in robust trading Thursday ahead of a long-awaited court ruling on a patent challenge to its best-selling drug.

The company's near-term, mid-term and even long-term future will be decided late this afternoon when a federal judge rules on Zyprexa, which accounted for 32% of revenue last year. Analysts say the drug contributes an even greater percentage of operating profit.

Shares fell $1.02, or 1.8%, to $56.10. More than 3.7 million shares had changed hands, already surpassing their average daily trading volume of 3.3 million shares.

If Lilly wins, and most analysts believe it will prevail, the company will retain control of a drug that produced $4.4 billion in sales last year. If Lilly loses, and the legal challenge only affects the U.S. patent, analysts say the annual impact on earnings per share could be substantial throughout the decade.

The patent is being challenged by three companies --




Teva Pharmaceutical Industries

(TEVA) - Get Report


Dr. Reddy's Laboratories

(RDY) - Get Report


Lilly said the district court judge's ruling would be announced at 5:50 p.m. EDT.

"Lilly remains confident Zyprexa's compound patent is valid and the generic manufacturers' claims are without merit," the company said in a statement Wednesday.

Zyprexa has been under pressure in the U.S. because of competition from other antipsychotic medications. Still, some analysts say overseas sales should help offset weakness in the U.S. market.

Zyprexa was among

several antipsychotic drugs mentioned earlier this week in a public health advisory from the Food and Drug Administration.

The agency told all makers of these drugs to place black box warnings -- the strongest warning from the FDA -- on labels to emphasize the potentially fatal risk of using them for treating elderly patients who suffer from dementia. These drugs are not approved by the FDA for such a use. However, federal law allows doctors to prescribe a drug for any disease or condition as long as the FDA has approved a drug for a single disease.

The FDA says a review of 17 placebo-controlled studies involving Zyprexa and three other drugs found that the death rate for elderly patients with dementia was about 1.6 to 1.7 times that of those on a placebo.