* Trial positive despite negative interim data

* To submit marketing application for mono, combo therapy in 2017

* The odds of monotherapy approval have improved - Bernstein (Adds details, analyst comments; updates shares)

By Natalie Grover

March 20 (Reuters) - Eli Lilly and Co's combination of its experimental breast cancer drug and another widely used treatment slowed disease progression in patients who relapsed or did not benefit enough when treated with the anti-estrogen therapy.

In August, an independent data monitoring committee recommended the late-stage study continue without modification, even though interim evaluation suggested the combination treatment was not delaying cancer progression.

Lilly's drug, abemaciclib, is part of the same new class of breast cancer treatments as Pfizer Inc's Ibrance, and Novartis AG's newly approved Kisqali.

The study, named Monarch-2, compared combined use of abemaciclib and anti-estrogen therapy fulvestrant with fulvestrant alone.

Lilly said on Monday that data showed the addition of abemaciclib, which is also being evaluated for lung cancer, resulted in a statistically significant improvement in progression-free survival.

The U.S. drugmaker is also evaluating the drug as a single agent in breast cancer patients who have not derived enough benefit from prior treatments, and multiple other studies are testing abemaciclib in combination with other drugs.

Lilly said it planned to submit an application to market abemaciclib as a monotherapy in the second quarter, and as a combination therapy in the third quarter.

If approved, abemaciclib will be the third entrant to the U.S. market, more than two years after Ibrance, and just over six months behind Kisqali.

With Monarch-2 supportive of the drug's effectiveness and/or assuring on its long-term safety profile, the odds of monotherapy approval have improved, Bernstein's Timothy Anderson wrote in a client note.

Lilly said it would provide detailed data from the study at a future medical conference, which analysts predict is likely at the American Society of Clinical Oncology (ASCO) meeting in June.

Abemaciclib could steal a march over its rivals, should data show a higher relative response rate and longer duration of response, as well as good tolerability despite the frequent diarrhea, Anderson added.

Bernstein's forecast of abemaciclib sales of $1.3 billion in 2021 assumes it would enter the market third with no real differentiation, he said, noting if detailed data showed the drug is more competitive, estimates would rise substantially.

After skin cancer, breast cancer is the most common cancer in women in the United States, according to the U.S. Centers for Disease Control and Prevention.

About 40,610 women will die from breast cancer in 2017, the American Cancer Society estimates.

Lilly's shares were little changed at $84.68 in morning trading.

(Reporting by Natalie Grover in Bengaluru; Editing by Sai Sachin Ravikumar and Martina D'Couto)