(Recasts first paragraph, adds company, analyst comment, updates shares)
By Bill Berkrot
July 25 (Reuters) - Eli Lilly and Co on Tuesday outlined a likely multi-year delay for its experimental rheumatoid arthritis drug with blockbuster sales potential, and disappointed investors sent its shares down nearly 4 percent.
In a surprise move, the U.S. Food and Drug Administration in April declined to approve the drug, baricitinib, calling for an additional clinical study.
Lilly said on Tuesday the FDA was concerned about a small, but increased number of potentially dangerous blood clots seen in baricitinib patients in clinical trials.
The company and partner Incyte Corp said compiling fresh data to address FDA safety concerns would delay its resubmission by a minimum of 18 months, followed by a fresh review of the new data by FDA prior to a final decision.
Leerink Partners analyst Seamus Fernandez said he does not expect a U.S. launch of baricitinib until 2021.
Lilly said it disagrees with the FDA assessment of the drug that won approval in Europe and Japan, and remained confident in its clinical benefit and multibillion-dollar sales potential. EU and Japanese regulators updated the product's label to include the increased safety risk.
Eli Lilly shares were down 3.8 percent at $81.54. Incyte was down 3.3 percent at $133.75.
The company said it was delaying a Phase III trial of baricitinib in psoriatic arthritis until next year, pending discussions with FDA, but was moving ahead with trials of the medicine in atopic dermatitis and lupus. Lilly said it believes it has patent protection through the end of the next decade.
On a call with analysts, Lilly also outlined a renewed focus in oncology and said it would set a very high bar for moving medicines into late state development.
Lilly said it wants to build an oncology portfolio of medicines capable of changing the standard or care or able to become the foundation of multiple combination therapies.
It also said it was actively looking for early phase and preclinical oncology assets that can be combined with existing products.
Excluding items, Lilly reported second-quarter profit of $1.11 per share, topping average analysts' expectations by 6 cents, according to Thomson Reuters I/B/E/S, and it raised its full-year forecast to reflect that.
It now expects adjusted earnings of $4.10 to $4.20 per share, up from $4.05 to $4.15, and sees 2017 revenue of $22 billion to $22.5 billion up from a prior view of $21.8 billion to $22.3 billion.
Strong demand for new products, including diabetes treatment Trulicity and Taltz for psoriasis, helped drive the results. (Additional reporting by Ankur Banerjee in Bengaluru; Editing by Martina D'Couto and Nick Zieminski)