Eli Lilly and Co.’s loss of a patent on one of its blockbuster drugs in court late last month received a collective yawn from investors.

A U.S. appeals court ruled July 28 that Lilly’s cancer drug Gemzar received a second patent it shouldn’t have—a patent Lilly was counting on to ward off generic competitors of the drug for another three years.

Now, cheaper generic versions of the cancer medicine will hit the U.S. market when Gemzar’s first U.S. patent expires in November. That will wipe away most of Gemzar’s $750 million in annual U.S. revenue off Lilly’s books. Gemzar is approved to treat ovarian, breast, pancreatic and non-small-cell lung cancers.

But since the decision, Lilly’s stock price has actually risen slightly. It closed Friday at $36.98.

That's because most Wall Street analysts were already assuming Lilly would lose in court, in spite of confident predictions by company executives.

Lilly was trying to defend its discovery that Gemzar is effective against cancer, which is called a method-of-use patent. Such patents are much harder to defend than Lilly’s first patent on Gemzar, which protects Lilly’s discovery of the molecule itself, known as composition of matter.

“Every sell-side analyst looks at composition-of-matter patents as being those that never fall in a court and any other patent, including use or manufacturing, as being not sacrosanct,” said Barclays Capital analyst Tony Butler.

But the larger reason for the lack of investor reaction is that Lilly’s short-term successes and setbacks make little change in its long-term outlook. The company will lose patent protection on so many monster drugs in the next few years that a little good news or bad news doesn’t change the picture much.

“They lose a little bit more financial flexibility,” Miller Tabak & Co. analyst Les Funtleyder said of the Gemzar patent loss. “But they’re already less flexible.”

Funtleyder, who advises hedge funds on health care stocks and is now managing his own health care mutual fund, said he’s waiting for Lilly to do something significant enough to make a dent in the revenue it will lose from patent expirations over the next five years.

“Even without Gemzar, we know and they know the next couple of years are going to be difficult,” he said.

Beginning with the loss of U.S. and European patents on Zyprexa, Lilly’s $5 billion-a-year antipsychotic, the company stands to lose patent protection on five best-selling drugs by 2014.

Those events could zap $10 billion a year in sales, or nearly half its current revenue of $21.8 billion a year.

“It’s not that it’s irrelevant,” Butler said of the Gemzar patent loss. “It’s just one of many. It doesn’t improve or deteriorate any view of the company.”

Indeed, many analysts were assuming a 2011 drop-off in Gemzar revenue due to a court loss, which will allow Israel-based Teva Pharmaceuticals Inc. to launch the first generic Gemzar on Nov. 15.

For example, Goldman Sachs Group analyst Jami Rubin predicted Gemzar’s nearly $1.4 billion in global sales would dwindle to a paltry $385 million next year. The drug has already lost patent protection in some foreign countries. Deutsche Bank Securities analyst Barbara Ryan also assumed Gemzar would tail off next year.

But others, such as Dr. Tim Anderson at Bernstein Research and Bert Hazlett at BMO Capital Markets, assumed Gemzar would keep generating more than $1 billion in worldwide sales for three more years.

Lilly executives had assumed a court victory and had built that expectation into their 2010 profit forecasts. In the wake of the decision against Lilly by a panel of judges at the U.S. Court of Appeals for the Federal Circuit, Lilly executives said they would explore any remaining legal options they have.

"We strongly disagree with the ruling by the U.S. Court of Appeals regarding Gemzar's method-of-use patent. We continue to believe that our Gemzar method-of-use patent should be found valid and should remain in effect until mid-2013," said Bob Armitage, Lilly’s general counsel, in a statement.

Meanwhile, Lilly CEO John Lechleiter kept up his sunny view that, eventually, Lilly’s pipeline of new drugs will deliver new revenue to offset its old ones losing patent protection.

"Despite today's ruling, our business remains strong, supported by the growth of key marketed products and a promising pipeline of potential new medicines that currently boasts nearly 70 molecules in clinical development,” Lechleiter said in a statement. “We remain confident in our ability to deliver on our innovation-based strategy."