Moody's Investors Service on Monday lowered the long-term ratings of Eli Lilly and Co. one notch, to A2 from A1, citing a wave of patent expirations the drugmaker faces in coming years.

The new rating is Moody's sixth-highest investment-grade rating.

Lilly will lose patents protecting key drugs such as its top seller, the antipsychotic Zyprexa, to generic competition. And recent setbacks in drug development and intellectual property litigation compound those problems, Moody's said in a prepared statement.

Moody's said the downgrade also reflects erosion in Lilly's global position as competitors have merged.

"Amidst a competitive landscape and high hurdles to drug approvals, Moody's believes that Lilly's near-term patent expirations pose a major strategic challenge," the ratings service said.

Moody's said last month it was placing the drug maker's long-term rating under review for a possible downgrade and it expected a one-notch downgrade.

It said Lilly's rating outlook is now stable; positive factors reflected in the new rating include a strong balance sheet and conservative financial profile, Moody's said.

The ratings service also affirmed Lilly's Prime-1 short-term rating, which was not under review.

Lilly shares closed Monday at $35.73 each, unchanged for the day.