Eli Lilly ( LLY) said Tuesday that the Food and Drug Administration had approved an injectable version of the company's best-selling drug Zyprexa as a treatment for acute agitation in patients who suffer from schizophrenia and bipolar mania.

Zyprexa has been a money spinner for Lilly; last year, it produced $4.28 billion in sales, or 34% of the Indianapolis-based drugmaker's revenue. The company says 14 million prescriptions have been written worldwide since 1996. Zyprexa in pill form is approved by the FDA for treating schizophrenia and several other types of mental illness.

The company said the new injectable form of Zyprexa will be most useful in helping hospital-based physicians administer a potent antipsychotic medication with fewer side effects than existing therapies. The company said the injectable drug lacks the powerful sedation effects of other medications, thus enabling doctors to more quickly communicate with patients who have been given the drug to reduce their agitation. Lilly's research also says that an injectable Zyprexa had fewer side effects -- including muscle contractions, nausea and vomiting -- than injectable versions of the antipsychotics drugs, haloperidol and lorazepam.

The impact of the FDA's approval on Zyprexa sales could not be immediately determined. Lilly's heavily reliance on Zyprexa has caused concern among some analysts. On Monday, for example, Scott R. Henry, of Oppenheimer, kept his neutral rating on the stock but cut his 2004 earnings per share target because of "continued weakness" for the drug. He told clients in a research report that he was reducing his EPS to $2.78 from $2.85, pushing his estimate below the company's guidance of $2.80 to $2.85. (He doesn't own shares and his firm doesn't have an investment banking relationship with Lilly.)

Henry said he disagrees with Lilly's assertion that it can maintain growth in the U.S. market, citing "declining year-over-year prescriptions in the range of 5% to 8%" covering Zyprexa and Symbyax, a drug that combines Lilly's Prozac with Zyprexa. He cut his estimates of Zyprexa's U.S. sales for the next three years and also trimmed EPS figures for 2005 and 2006.

Recently, Lilly's stock was up 10 cents to $65.70.

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