Exhibit 99
Lilly ICOS LLC Reports First Full-Year Profit in its History
- 2005 Fourth Quarter Net Income Surges to $61.4 Million -
- 2005 Worldwide Sales Grow 35% -
- Company Provides Update on Clinical Plan for BPH -
BOTHELL, Wash. and INDIANAPOLIS, Ind. - January 20, 2006 - Lilly ICOS LLC (Lilly
ICOS) (NYSE: LLY and Nasdaq: ICOS) is releasing its financial results for the
fourth quarter and year ended December 31, 2005. For the 2005 year, net income
was $37.8 million, compared to a net loss of $262.0 million in 2004. Worldwide
sales of Cialis(R) (tadalafil) in 2005 totaled $746.6 million, an increase of
35% compared to $552.3 million in 2004.
Cialis Net Sales:
- -----------------
(in millions)
Three Months Ended Year Ended
December 31, December 31,
--------------------------------- ---------------------------------
2005 2004 2005 2004
---------------- --------------- ---------------- ----------------
Lilly ICOS Territories:
United States $ 81.6 $ 52.8 $272.9 $206.6
Europe(1) 65.3 52.8 244.5 177.9
Canada and Mexico 18.6 13.1 59.3 37.2
---------------- --------------- ---------------- ----------------
Total Lilly ICOS 165.5 118.7 576.7 421.7
Lilly Territories 45.0 34.0 169.9 130.6
---------------- --------------- ---------------- ----------------
Worldwide Total $210.5 $152.7 $746.6 $552.3
================ =============== ================ ================
"Lilly ICOS has reached a significant milestone, achieving full-year
profitability in the second year following the Cialis launch in the United
States," commented Paul N. Clark, ICOS Chairman and CEO. "Since launch, Cialis
has delivered solid market share gains and sales growth, while concurrently
leveraging early investments in marketing and selling programs."
- -----------------------------
(1) Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland,
Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom.
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Lilly ICOS continues to broaden its understanding of tadalafil and explore its
potential use in additional indications beyond erectile dysfunction. In 2005, a
Phase 3 clinical study was initiated in pulmonary arterial hypertension, a
life-threatening disease, and a Phase 2 clinical study began in hypertension, a
common disorder which dramatically increases the risk of cardiovascular
complications.
In 2005, Lilly ICOS completed a Phase 2 clinical study and reported positive
results in the treatment of lower urinary tract symptoms in men with benign
prostatic hyperplasia (BPH). The Phase 2 clinical results will be presented at
the upcoming meetings of the European Association of Urology and the American
Urological Association, in April and May 2006, respectively. Earlier this week
Lilly ICOS had a productive meeting with the FDA, in which the results of the
study and a clinical plan for BPH were discussed. Based on the discussion, Lilly
ICOS plans to proceed with a Phase 2b study this year, which may serve as one of
two pivotal studies, to evaluate multiple doses of tadalafil. The results of the
multi-dose study will be useful in the design of a Phase 3 study for BPH,
expected to begin in 2007.
2005 Full-Year Financial Results
- --------------------------------
For the year ended December 31, 2005, Lilly ICOS reported net income of $37.8
million, compared to a net loss of $262.0 million for the year ended December
31, 2004, reflecting increased worldwide Cialis revenues and reduced selling and
marketing costs.
Total Lilly ICOS revenue for 2005 was $610.7 million, compared to $447.9 million
for 2004. Lilly ICOS revenue for 2005 includes $34.0 million in royalties on
sales reported by Lilly, compared to $26.1 million in royalty revenue for 2004.
The increase in total revenue reflects continued growth of Cialis in the Lilly
ICOS territories since its 2003 introduction, as well as its global expansion in
countries where Cialis is sold by Lilly.
Cost of sales totaled $47.3 million in 2005, including royalties payable by
Lilly ICOS equal to 5% of its net product sales. Cost of sales, as a percentage
of net product sales, was 8.2% in 2005, compared to 8.6% in 2004.
Selling, general and administrative expenses decreased $146.7 million from the
year ended December 31, 2004, to $459.8 million in 2005. The decrease was
primarily due to planned reductions in 2005 selling and marketing expenses in
the United States.
2005 Fourth Quarter Financial Results
- -------------------------------------
For the three months ended December 31, 2005, Lilly ICOS reported net income of
$61.4 million, compared to a net loss of $31.4 million for the three months
ended December 31, 2004. The shift to profitability resulted from an increase of
$49.0 million in total revenue and a reduction of $43.8 million in expenses.
Total Lilly ICOS revenue for the fourth quarter of 2005 was $174.5 million,
compared to $125.5 million for the fourth quarter of 2004. Lilly ICOS revenue
for the fourth quarter of 2005 included $9.0 million in royalties on sales
reported by Lilly, compared to $6.8 million in royalty revenue for the fourth
quarter of 2004.
Selling, general and administrative expenses decreased $46.0 million from
the fourth quarter of 2004, to $84.4 million in the fourth quarter of 2005. The
decrease was primarily due to the aforementioned reduced U.S. selling and
marketing expenses in the 2005 quarter.
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About Lilly ICOS LLC
- --------------------
Lilly ICOS LLC, a joint venture equally owned by ICOS Corporation and Eli Lilly
and Company, is marketing Cialis, in North America and Europe, for the treatment
of erectile dysfunction.
ICOS Corporation, a biotechnology company headquartered in Bothell, Washington,
is dedicated to bringing innovative therapeutics to patients. ICOS is working to
develop treatments for serious unmet medical needs such as pulmonary arterial
hypertension, benign prostatic hyperplasia, hypertension, cancer and
inflammatory diseases.
Eli Lilly and Company, a leading innovation-driven corporation, is developing a
growing portfolio of first-in-class and best-in-class pharmaceutical products by
applying the latest research from its own worldwide laboratories and from
collaborations with eminent scientific organizations. Headquartered in
Indianapolis, Indiana, Lilly provides answers - through medicines and
information - for some of the world's most urgent medical needs. F-LLY
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. Such forward-looking statements are based on
current expectations, estimates and projections about the industry, management
beliefs and certain assumptions made by the managements of ICOS and Lilly.
Investors are cautioned that matters subject to forward-looking statements
involve risks and uncertainties, including economic, competitive, governmental,
technological, legal and other factors discussed in the two companies'
respective filings with the Securities and Exchange Commission, which may affect
the business and prospects of the two companies and Lilly ICOS. Results and the
timing and outcome of events may differ materially from those expressed or
implied by the forward-looking statements in this press release. More
specifically, there can be no assurance that tadalafil will achieve sustained
commercial success or that competing products will not pre-empt market
opportunities that might exist for the product.
The forward-looking statements contained in this press release represent ICOS'
and Lilly's judgments as of the date of this release. Neither ICOS nor Lilly
undertake any obligation to update any forward-looking statements.
--Selected financial data follows--
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Lilly ICOS LLC
Condensed Consolidated Statements of Operations
(in thousands)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
----------------------------------- ----------------------------------
2005 2004 2005 2004
----------------- --------------- ---------------- ----------------
Revenue
Product sales, net $ 165,501 $ 118,705 $ 576,734 $ 421,742
Royalties 8,997 6,809 33,969 26,120
----------------- ----------------- ---------------- ----------------
Total revenue 174,498 125,514 610,703 447,862
----------------- ----------------- ---------------- ----------------
Expenses
Cost of sales 13,200 10,338 47,264 36,066
Selling, general and administrative 84,416 130,398 459,827 606,511
Research and development 15,494 16,169 65,816 67,318
----------------- ----------------- ---------------- ----------------
Total expenses 113,110 156,905 572,907 709,895
----------------- ----------------- ---------------- ----------------
Net income (loss) $ 61,388 $ (31,391) $ 37,796 $ (262,033)
================= ================= ================ ================
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Lilly ICOS LLC
SUMMARIZED OPERATING RESULTS
(in thousands)
(unaudited)
2005 2004
---------------------------------------------- ---------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL
--------- -------- -------- -------- --------- ---------- --------- --------- --------- ----------
Revenue:
Product sales,
net:
United States $42,744 $71,118 $77,438 $81,615 $272,915 $32,807 $50,768 $70,226 $52,783 $206,584
Europe 56,264 60,925 61,992 65,311 244,492 36,356 45,301 43,414 52,859 177,930
Canada and
Mexico 12,186 13,839 14,727 18,575 59,327 5,854 8,931 9,380 13,063 37,228
--------- -------- -------- -------- --------- ---------- --------- --------- --------- ----------
111,194 145,882 154,157 165,501 576,734 75,017 105,000 123,020 118,705 421,742
Royalties 7,790 9,010 8,172 8,997 33,969 6,652 6,449 6,210 6,809 26,120
--------- -------- -------- -------- --------- ---------- --------- --------- --------- ----------
Total revenue 118,984 154,892 162,329 174,498 610,703 81,669 111,449 129,230 125,514 447,862
--------- -------- -------- -------- --------- ---------- --------- --------- --------- ----------
Expenses:
Cost of sales 9,752 11,934 12,378 13,200 47,264 6,573 8,982 10,173 10,338 36,066
Selling, general
and administrative 137,027 126,232 112,152 84,416 459,827 195,053 157,838 123,222 130,398 606,511
Research and
development 13,874 18,413 18,035 15,494 65,816 18,827 15,119 17,203 16,169 67,318
--------- -------- -------- -------- --------- ---------- --------- --------- --------- ----------
Total expenses 160,653 156,579 142,565 113,110 572,907 220,453 181,939 150,598 156,905 709,895
--------- -------- -------- -------- --------- ---------- --------- --------- --------- ----------
Net income (loss) $(41,669) $(1,687) $19,764 $61,388 $37,796 $(138,784) $(70,490) $(21,368) $(31,391) $(262,033)
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