By Ben Hirschler, European Pharmaceuticals Correspondent

LONDON (Reuters) - The world's top drugmakers are diversifying in a bid to offset falling sales of key prescription medicines, but they have yet to convince investors they can replace the allure of today's fading blockbusters.

The two largest -- Pfizer Inc (PFE.N: Quote, Profile, Research) and GlaxoSmithKline Plc (GSK.L: Quote, Profile, Research) -- both highlighted the importance of new markets and non-traditional products in the past week, hoping to convince investors to stick with their underperforming shares.

Such strategies should provide a buffer as firms face a "cliff" of patent expiries but may not set the stocks on fire.

"In terms of the patent expiries facing the industry between 2010 and 2012, it looks like Armageddon," said John Wilson, a fund manager at Standard Life in Edinburgh.

"Companies that have another business to help see them through the tough times should do relatively better. But the market doesn't necessarily look at it in those terms because when they buy drug stocks they want to buy blockbuster drugs."

Maybe it is time to drop that blockbuster mentality.

The challenges facing prescription medicines -- generics, poor pipelines, regulatory caution and price pressure -- are already turning conventional valuation ideas on their head.

JP Morgan, for example, estimated in a note last month that Glaxo's vaccines business was worth a whopping 31 times 2008 earnings, consumer health 19 times and pharmaceuticals, the notional "crown jewels," a paltry 8 times.