NEW YORK (CNNMoney.com) - Eli Lilly & Co. is testing an anti-cancer pill that could shrink brain tumors and may be eventually used to treat other forms of cancer.

Given the suffering involved with chemotherapy, you'd think such a pill would be a slam-dunk blockbuster for a drug company. In this case, though, the outlook is uncertain. Analysts have mixed opinions on enzastaurin's earning potential. Based on their comments, the pill could be anything from an instant blockbuster to a minor also-ran.

Obviously the company has high hopes.

"We think our drug has broad activity in a wide variety of different cancers," said Dr. Richard Gaynor, vice president of cancer research at Lilly. "We are very hopeful that it will be a versatile drug in oncology."

Lilly (up $0.24 to $54.49, Charts) is experimenting with enzastaurin for a wide range of cancer applications, and hopes to tap into a rapidly expanding oncology market. Industry-wide annual cancer drug sales are expected to more than double over five years, to $55 billion in 2009 from $24 billion in 2004, according to research firm IMS Health (unchanged at $26.14, Charts).

Enzastaurin shrinks tumors by inhibiting blood vessel formation and cell growth and decreasing the survival of cells, said Gaynor, and it's currently in phase 3 studies for treatment of brain cancer and non-Hodgkin's lymphoma. Phase 3 is the latest stage of study before submitting a potential drug to the Food and Drug Administration for approval. Lilly expects to file its application in 2008.

Barbara Ryan, analyst for Deutsche Bank North America, said that it's a bit early for solid estimates, because enzastaurin wouldn't get on the market before 2009 assuming it gets FDA approval. Nevertheless she projects peak annual sales of $300 million. This is relatively slight compared to Lilly's overall sales of $14.6 billion in 2005.

But Tony Butler, analyst for Lehman Brothers, projects that enzastaurin sales could reach $1 billion during its expected launch year of 2009, and that Lilly's early-stage studies could result in more sales further down the road.

"By broadening it out to other tumor types, they could add some leverage to their existing profile," said Butler. "Lilly is going to be a contender in the oncology market."

As for safety, Butler said, "You do have side effects, but you expect them."

Lilly spokeswoman Christine Van Marter said the most significant side effect to emerge so far is discoloration of urine and feces.

Lilly hopes to add enzastaurin to the cancer blockbuster that it already has on the market: Gemzar, a form of chemotherapy that treats pancreatic and non-small cell lung cancer, as well as metastatic breast cancer, with 2005 sales totaling $1.3 billion. Lilly conducted early-stage studies combining the enzastaurin pill with Gemzar, as well as two other chemotherapies including its own Alimta, and Roche's Xeloda.

But Lilly said that its phase 1, or early stage studies, show signs that enzastaurin could eventually be used to treat a wide range of cancer types, including lung, breast and pancreas, as well as head and neck. Assuming further tests are successful, these indications are years away from submission to the FDA.

The analysts quoted in this story do not own shares of Lilly stock, though Deutsche Bank North America does own shares.

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