Mark this one in Eli Lilly and Co.’s “Oops!” category.

An experimental medicine for hepatitis C that Lilly helped identify and develop is now on the cusp of market approval. According to an article in Xconomy.com, a biotech trade publication, some analysts are predicting as much as $2 billion in annual U.S. sales after the drug's expected market launch in 2011.

But in December 2002, Lilly sold back its rights to the drug, telaprevir, to its inventor, Massachusetts-based Vertex Pharmaceuticals Inc

Any revenue from telaprevir, which would have been split with Vertex, would have been awfully nice right now for Lilly. The Indianapolis-based drugmaker will watch patents expire on its cancer drug Gemzar in November and its antipsyhotic blockbuster Zyprexa a year later.

Cheaper generic copies will steal the lion’s share of those two drugs’ $6 billion in annual sales.

“It’s a decision that Lilly has to regret,” Xconomy.com reporter Ryan McBride wrote about telaprevir, which proved effective for three out of four patients with hepatitis C, a chronic liver disease, during a large Phase 3 clinical trial.

McBride cited a former Vertex executive who said telaprevir’s champions within Lilly were shuffled off the program, and it subsequently fell down Lilly’s priority list.

Vertex later signed co-development deals with New Jersey-based Johnson & Johnson and Japan-based Mitsubishi Tanabe, according to Xconomy.com.

“At Lilly, we regularly review our portfolio and sometimes re-prioritize assets based on resource availability,” Lilly spokesman Mark Taylor said in a statement. “Although we may decide to discontinue internal development of a molecule, we many times try to find ways to allow partner companies to continue the development. We believe this is in the best interest of the patients who may ultimately benefit if a new medicine makes it to the market."