Exhibit 99
ICOS Corporation Reports Results for 2005 First Quarter; Tadalafil to be
Evaluated in a Pivotal Clinical Study in Pulmonary Arterial Hypertension
BOTHELL, Wash.--(BUSINESS WIRE)--May 5, 2005--ICOS Corporation
(Nasdaq:ICOS) today released its financial results for the three months ended
March 31, 2005 and summarized recent events.
Cialis(R)(1) (tadalafil) Update
During the summer of 2005, Lilly ICOS LLC (Lilly ICOS), a 50/50 joint
venture between ICOS and Eli Lilly and Company, expects to begin a pivotal
clinical study of tadalafil for the treatment of pulmonary arterial hypertension
(PAH). In the United States, PAH affects an estimated 100,000 patients of all
ages. When untreated, death typically ensues over the course of three years and,
even with current therapy, the median life expectancy remains less than five
years. This rare, progressive disorder is characterized by an elevation of blood
pressure in the pulmonary arteries, which leads to shortness of breath, fatigue
and heart failure.(2) Tadalafil is the same active ingredient in Cialis, a
product that has been used to treat more than 4.5 million patients with erectile
dysfunction (ED).
"Our goals continue to be to both maximize the value of tadalafil for the
long-term and achieve profitability for Lilly ICOS this year," stated Paul
Clark, ICOS Chairman and Chief Executive Officer. "Toward our long term goal, I
am pleased to announce that we plan to initiate a pivotal clinical study in PAH,
a serious cardiovascular disease. Tadalafil's desirable half-life of 17.5 hours
may make it amenable to once a day dosing for PAH. We continue to evaluate
tadalafil in a second indication, benign prostatic hyperplasia."
During the 2005 first quarter, worldwide sales of Cialis (tadalafil)
totaled $150.1 million, a 39% increase compared to the 2004 first quarter. Lilly
ICOS financial results, for the first quarter of 2005, were reported on April
18, 2005.
U.S. wholesalers continued to reduce their inventory levels of Cialis
during the 2005 first quarter, in accordance with the terms of recent wholesaler
agreements. Lilly ICOS estimates that U.S. wholesaler inventories of Cialis were
reduced approximately $27 million during the quarter.
In March 2005, the FDA authorized a U.S. product label change, related to
the use of Cialis with alpha blockers, removing a contraindication and replacing
it with precautionary information. This product label change allows a new group
of patients to use Cialis.
"In France, where Cialis has been available for about two years, Cialis has
overtaken Viagra(R) to become the number one selling ED treatment for the third
consecutive month," added Clark.
Other First Quarter Highlights
In January 2005, ICOS and Solvay Pharmaceuticals, Inc. entered into a
co-promotion agreement for AndroGel(R) (testosterone gel) 1% CIII. AndroGel is
approved in the U.S. for replacement therapy in men for conditions associated
with a deficiency or absence of a man's own testosterone. ICOS is providing
promotional support for AndroGel through physician sales calls and other
promotional activities conducted by its U.S. sales representatives.
In March 2005, ICOS announced an expansion of its efforts to develop
monoclonal antibodies for the treatment of cancer, through the formation of a
joint development collaboration with Caprion Pharmaceuticals, Inc. ICOS is
responsible for target validation and preclinical development of therapeutic
antibodies. Caprion is to contribute a selection of proprietary antibody targets
and perform certain target characterization activities for the collaboration.
Financial Results
For the three months ended March 31, 2005, ICOS reported a net loss of
$46.4 million ($0.73 per share), compared to a net loss of $86.3 million ($1.36
per share) for the three months ended March 31, 2004.
Equity in losses of Lilly ICOS was $20.7 million in the first quarter of
2005, compared to $69.2 million in the corresponding period of 2004. The
decreased Lilly ICOS losses largely reflect the impact of increased worldwide
Cialis revenues and an overall reduction in selling and marketing costs compared
to the 2004 first quarter. Lilly ICOS' 2005 first quarter results were
negatively affected by approximately $27 million of aggregate reductions in U.S.
wholesale inventories of Cialis during that period.
ICOS Corporation's total revenue was $13.8 million in the first quarter of
2005, compared to $16.5 million in the first quarter of 2004.
Collaboration revenue from Lilly ICOS totaled $10.4 million in the 2005
first quarter, compared to $14.1 million in the first quarter of 2004. The
decrease primarily reflects a reduction in Lilly ICOS' reimbursement of our U.S.
sales force expenses, from 100% in 2004, to 60% beginning in January 2005.
Co-promotion services revenue was $1.0 million in the 2005 first quarter.
We began promoting AndroGel to physicians, on behalf of Solvay Pharmaceuticals,
Inc., in February 2005.
Total operating expenses were $39.5 million for the three months ended
March 31, 2005, compared to $33.7 million for the three months ended March 31,
2004.
Research and development expenses increased $5.0 million from the three
months ended March 31, 2004, to $22.2 million for the three months ended March
31, 2005. The increase was primarily due to higher expenses associated with our
discovery and preclinical research programs and incremental development
activities being performed by ICOS personnel on behalf of Lilly ICOS.
At March 31, 2005, we had cash, cash equivalents, investment securities and
associated interest receivable of $240.2 million.
Financial Guidance
Based on 2005 first quarter results and other appropriate factors, we
presently expect that ICOS Corporation's 2005 net loss will be in the range of
$70 million ($1.09 per share) to $83 million ($1.29 per share). The decrease in
net loss, compared to $198 million ($3.13 per share) in 2004, is primarily due
to our expectation that Lilly ICOS will become profitable in 2005. We expect
Cialis market share and sales to continue to grow in 2005, and we expect certain
Lilly ICOS marketing and selling expenses to decline.
Lilly ICOS' 2005 net income is expected to be in the $30 million to $50
million range. The level of Cialis sales achieved is the primary variable that
will affect Lilly ICOS' results for 2005.
For the second quarter of 2005, we expect that ICOS Corporation's net loss
will be in the range of $21 million to $30 million, approximately $0.33 per
share to $0.47 per share. The decrease in net loss, compared to the 2005 first
quarter is primarily due to the performance of Lilly ICOS. In the 2005 second
quarter, we expect Lilly ICOS to generate between a $10 million net loss and a
$5 million net profit.
ICOS Corporation, a biotechnology company headquartered in Bothell,
Washington, is dedicated to bringing innovative therapeutics to patients.
Through Lilly ICOS LLC, ICOS is marketing its first product, Cialis (tadalafil),
for the treatment of erectile dysfunction. ICOS is working to develop treatments
for serious unmet medical conditions such as benign prostatic hyperplasia,
pulmonary arterial hypertension, cancer and inflammatory diseases.
Except for historical information contained herein, this press release
contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve risks
and uncertainties that may cause our results and the timing and outcome of
events to differ materially from those expressed in or implied by the
forward-looking statements, including risks associated with product
commercialization, research and clinical development, regulatory approvals,
manufacturing, collaboration arrangements, liquidity, competition, intellectual
property claims, litigation and other risks detailed in our latest Quarterly
Report on Form 10-Q and our other public filings with the Securities and
Exchange Commission.
The forward-looking statements contained in this press release represent
our judgment as of the date of this release. We undertake no obligation to
publicly update any forward-looking statements. The biotechnology and
pharmaceutical businesses are risky and there can be no assurance that any of
our products or product candidates will achieve commercial success or that
competing therapies will not pre-empt market opportunities that might exist for
any of our products or product candidates.
Conference Call
As previously announced, today, beginning at 4:30 p.m. EDT, ICOS will host
a conference call to review 2005 first quarter financial results and related
matters, including financial guidance and plans for 2005. The conference call
can be accessed as a webcast at www.icos.com, in the Investor/Events section, or
by telephone, using the Passcode 775191, live at 612-332-1025, or as a replay at
320-365-3844. The webcast will be available through May 12, 2005. The telephone
replay will be available until May 6, 2005 at 8:30 pm EDT.
(1) Cialis(R) is a registered trademark of Lilly ICOS LLC. All other
trademarks are the property of their respective owners.
(2) American College of Rheumatology, 2004; Pulmonary Hypertension
Association; Badesch D, et al. Chest, 2004, 126:35S-62S.
ICOS Corporation and Subsidiaries
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
-----------------------
2005 2004
---------- ----------
Condensed Consolidated Statements of
Operations:
Revenue:
Lilly ICOS collaboration $ 10,360 $ 14,067
Contract manufacturing 2,474 2,456
Co-promotion services 950 -
---------- ----------
Total revenue 13,784 16,523
---------- ----------
Operating expenses:
Research and development 22,213 17,254
Marketing and selling 10,434 9,797
Cost of contract manufacturing 1,851 2,513
General and administrative 5,005 4,153
---------- ----------
Total operating expenses 39,503 33,717
---------- ----------
Operating loss (25,719) (17,194)
Other income (expense):
Equity in losses of Lilly ICOS (20,679) (69,237)
Interest expense (1,704) (1,711)
Interest and other income 1,718 1,839
---------- ----------
Net loss $ (46,384) $ (86,303)
========== ==========
Net loss per common share - basic and diluted $ (0.73) $ (1.36)
========== ==========
Weighted average common shares outstanding -
basic and diluted 63,799 63,237
========== ==========
Condensed Consolidated Balance Sheets: March 31, December 31,
2005 2004
---------- ----------
Cash, cash equivalents, investment securities
and interest receivable $ 240,184 $ 275,769
Receivable from Lilly ICOS 11,540 15,053
Property and equipment, net 19,168 19,206
Deferred financing costs and other 14,127 14,953
---------- ----------
Total assets $ 285,019 $ 324,981
========== ==========
Due to Lilly ICOS $ 20,748 $ 14,147
Other current liabilities 23,801 25,656
Convertible subordinated debt 278,650 278,650
Stockholders' equity (deficit) (38,180) 6,528
---------- ----------
Total liabilities and stockholders'
equity (deficit) $ 285,019 $ 324,981
========== ==========
ICOS Corporation and Subsidiaries
SUMMARIZED OPERATING RESULTS OF LILLY ICOS LLC
(in thousands)
(unaudited)
2005 2004
--------- --------------------
Q1 Q1 Q2
--------- ---------- ---------
Revenue:
Product sales, net
United States $ 42,744 $ 32,807 $ 50,768
Europe 56,264 36,356 45,301
Canada and Mexico 12,186 5,854 8,931
-------- --------- --------
111,194 75,017 105,000
Royalties 7,790 6,652 6,449
-------- --------- --------
Total revenue 118,984 81,669 111,449
-------- --------- --------
Expenses:
Cost of sales (a) 9,752 6,573 8,982
Selling, general and administrative 137,027 195,053 157,838
Research and development 13,874 18,827 15,119
-------- --------- --------
Total expenses 160,653 220,453 181,939
-------- --------- --------
Net loss (a) $(41,669) $(138,784) $(70,490)
======== ========= ========
ICOS Corporation's share of
net loss $(20,679) $ (69,237) $(35,090)
======== ========= ========
2004
------------------------------
Q3 Q4 TOTAL
--------- --------- ----------
Revenue:
Product sales, net
United States $ 70,226 $ 52,783 $ 206,584
Europe 43,414 52,859 177,930
Canada and Mexico 9,380 13,063 37,228
-------- -------- ---------
123,020 118,705 421,742
Royalties 6,210 6,809 26,120
-------- -------- ---------
Total revenue 129,230 125,514 447,862
-------- -------- ---------
Expenses:
Cost of sales (a) 10,173 10,338 36,066
Selling, general and administrative 123,222 130,398 606,511
Research and development 17,203 16,169 67,318
-------- -------- ---------
Total expenses 150,598 156,905 709,895
-------- -------- ---------
Net loss (a) $(21,368) $(31,391) $(262,033)
======== ======== =========
ICOS Corporation's share of
net loss $(10,528) $(15,541) $(130,396)
======== ======== =========
(a) Cost of sales includes $103 per month of license fee amortization
applicable only to Eli Lilly and Company's interest in Lilly ICOS
LLC.
CONTACT: ICOS Corporation
Lacy Fitzpatrick, 425-415-2207