Eli Lilly's forecast for a 5 per cent earnings increase next year met with a lukewarm reaction on Wall Street as the group expected costs to rise while boosting sales of new products.

But the US drugmaker - which this week announced a €400 million investment in Cork - also positioned itself as an expanding biotechnology group yesterday. It said its new drug pipeline has more than one-third of its projects based on human proteins and biology.

Lilly estimated earnings excluding one-time items to be $3.25 - $3.35 (€2.44 - €2.52) a share next year compared with expected earnings of $3.10 - $3.20 this year. Next year's forecast was below Wall Street expectations, according to Tim Anderson, analyst at Prudential Equity Group. Lilly shares were trading more than 1 per cent lower at $54.11 in New York at lunchtime trading following the group's annual meeting for analysts.

However, the drugmaker said sales next year should increase by about 10 per cent to $15.5 billion. The growth will be helped by Lilly's planned $2.1 billion purchase of Icos, the biotechnology company, which is expected to negatively affect earnings next year but boost sales.

The purchase gives it all the sales from Cialis, the male impotence drug, which it had shared in partnership with the drugmaker.