By Ransdell Pierson

(Reuters) - Pfizer Inc <PFE.N> scrapped its high-profile cholesterol fighter after its effectiveness waned over time in large clinical trials, sending its shares 2 percent lower and prompting the company to trim its 2016 earnings forecast.

The largest U.S. drugmaker trimmed the top end of its 2016 profit estimate on Tuesday, citing costs of scrapping the experimental injectable medicine, called bococizumab, which works by blocking the PCSK9 protein.

Pfizer said bococizumab gradually lost its potency in reducing "bad" LDL cholesterol and caused more irritation at the injection site than similar recently approved drugs.

Pfizer has been trying to catch up with two rival drugs approved by U.S. regulators more than a year ago. Repatha, from Amgen Inc <AMGN.O>, and Praluent, from Regeneron Pharmaceuticals Inc <REGN.O> and Sanofi SA <SASY.PA>, can slash LDL cholesterol almost 60 percent, more effectively than traditional statins like Pfizer's Lipitor.

But large ongoing trials have not yet determined whether they could actually reduce heart attacks.

Chief Executive Ian Read said in an interview that the effectiveness of Pfizer's drug waned in a significant number of patients after 52 weeks of treatment, which was surprising given the drug's "robust" effectiveness at 12 weeks and 24 weeks.

"The product looked great until we got the 52-week data," Read said.

Pfizer wants to become a bigger force in heart medicine by developing other experimental treatments but has no plans to pursue another PCSK9 inhibitor, Read added.

Edward Jones analyst Ashtyn Evans said she had expected annual bococizumab sales of $500 million by 2020 and was disappointed that the drug's waning effectiveness did not become apparent until costly Phase III studies were almost complete.

She said Pfizer's stock price of 12 times the company's expected earnings per share for 2017 lagged the drug sector and that successful new products were needed to bring it into parity. The stock closed 64 cents lower at $31.07.

Repatha and Praluent each have annual sales of only about $100 million, far below initial expectations. Insurers have blocked reimbursements largely because each treatment costs more than $14,000 a year.

At the American Heart Association's annual Scientific Sessions in New Orleans later this month, Amgen will present data on Repatha's ability to reduce artery-clogging plaque. The company has said that the drug succeeded as measured by ultrasound pictures of the inside of arteries.

Details of the magnitude of plaque reduction and just how clinically meaningful that might be is slated to be discussed at the annual sessions. Arterial plaque is considered one of the underlying causes of heart attacks and heart disease.

RBC Capital Markets analyst Adnan Butt said Pfizer's decision was good news for the PCSK9 program being conducted by The Medicines Co <MDCO.O>.

"There is one fewer competitor and any big biopharma looking for an LDL cholesterol lowering program should want MDCO's PCSK9si," Butt said. That drug, currently in Phase III testing, works in a different way than the approved drugs by Amgen and Regeneron and may be administered quarterly or only twice a year.

The Medcines Co's shares rose 3.1 percent to close at $33.97. Pfizer cut the upper end of its 2016 earnings forecast to $2.43 per share from $2.48 while retaining the lower end at $2.38.

The drugmaker, which in September decided not to split itself into two, said it earned 61 cents per share in the third quarter, excluding special items. The results missed the analysts' average estimate by 1 cent, according to Thomson Reuters I/B/E/S.

Quarterly sales of $13.05 billion matched Wall Street expectations.

Sales of Ibrance, one of Pfizer's most important new drugs, totaled $550 million, trailing forecasts of $576 million. The breast cancer treatment, which has a list price of about $10,000 a month and blocks the CDK-4 and CDK-6 enzymes, faces looming competition from similar medicines being developed by Novartis AG <NOVN.S> and Eli Lilly and Co <LLY.N>.

Pfizer raised the lower end of its full-year revenue forecast to $52 billion from $51 billion, while keeping the upper end at $53 billion.

(Additional reporting by Bill Berkrot in New York and Natalie Grover in Bengaluru; Editing by Lisa Von Ahn and Richard Chang)