Exhibit 99
ICOS Corporation Reports Net Income of $5.6 million
($0.09 Per Share) for 2005 Fourth Quarter; Quarterly
Profit Driven by Solid Performance of Cialis
BOTHELL, Wash.--(BUSINESS WIRE)--Feb. 7, 2006--ICOS Corporation
(Nasdaq: ICOS) today released its financial results for the quarter
and year ended December 31, 2005, and provided guidance regarding
expected financial performance for 2006.
"The year 2005 was a very good one, with both ICOS and Lilly ICOS
reporting profitable fourth quarters and Lilly ICOS delivering its
first profitable year," stated Paul Clark, ICOS Chairman and CEO.
"These accomplishments were driven by Lilly ICOS' solid 2005 revenue
growth combined with disciplined management of selling, general and
administrative expenses."
2005 Highlights
Lilly ICOS, the 50/50 joint venture between ICOS Corporation and
Eli Lilly and Company that is marketing Cialis(R) (tadalafil) for the
treatment of erectile dysfunction in North America and Europe,
reported 2005 net income of $37.8 million, a $300 million improvement
compared to the net loss of $262.0 million reported for 2004. For the
three months ended December 31, 2005, Lilly ICOS reported net income
of $61.4 million, compared to the net loss of $31.4 million in the
fourth quarter of 2004.
2005 worldwide sales of Cialis were $746.6 million, 35% higher
than the $552.3 million reported in 2004. During 2005, Cialis
continued to gain market share. In the U.S., Cialis captured 25.0% of
total prescriptions among PDE5 inhibitors in December 2005, compared
to 20.0% in December 2004(1). In December 2005, aggregate market share
of Cialis in Europe, Canada and Mexico was 33.2%, compared to 29.0% a
year earlier(2). Cialis has become the market share leader in several
countries, including France, South Africa and Venezuela.
During 2005, tadalafil was evaluated in the treatment of lower
urinary tract symptoms in men with benign prostatic hyperplasia (BPH).
The Phase 2 clinical study demonstrated significant improvement in the
primary endpoint, the International Prostate Symptom Score, a
seven-item questionnaire that assessed the severity of symptoms of BPH
and the response to therapy. In addition, tadalafil demonstrated
significant improvement relative to placebo on most of the secondary
endpoints included in the study. 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. 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.
During the third quarter of 2005, Lilly ICOS initiated clinical
studies in additional potential indications for tadalafil. First, was
a Phase 3 study to treat patients with pulmonary arterial
hypertension, a life-threatening disease that affects an estimated
100,000 people in the U.S. Second, was a Phase 2 study to treat
patients with hypertension, a common disorder which dramatically
increases the risk of cardiovascular complications. It is estimated
that there are more than 70 million people in the U.S. with
hypertension.
2005 Full-Year Financial Results
For the year ended December 31, 2005, ICOS reported a net loss of
$74.8 million ($1.17 per share), compared to a net loss of $198.2
million ($3.13 per share) for the year ended December 31, 2004.
Equity in earnings of Lilly ICOS was $19.5 million in 2005,
compared to equity in losses of $130.4 million in 2004, a $149.9
million improvement. Lilly ICOS' 2005 profitability resulted from a
35% increase in worldwide Cialis revenue combined with a 24% reduction
in selling, general and administrative expenses.
ICOS Corporation's total revenue was $71.4 million for the year
ended December 31, 2005, compared to $74.6 million in 2004.
Collaboration revenue from Lilly ICOS totaled $50.1 million for
2005, compared to $56.0 million in 2004. The decrease primarily
reflects the reduction in Lilly ICOS' reimbursement of the cost of our
sales force, from 100% in 2004, to 60% beginning in January 2005,
partially offset by the impact of incremental research and development
activities that we conducted on behalf of Lilly ICOS during 2005.
Co-promotion services revenue was $5.3 million in 2005,
representing fees earned under a co-promotion arrangement with Solvay
Pharmaceuticals, Inc., which ended in December 2005.
Total operating expenses were $165.2 million in the year ended
December 31, 2005, compared to $142.0 million in the year ended
December 31, 2004.
Research and development expenses increased $16.5 million from
2004, to $88.3 million in 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, partially offset by the impact
of a clinical program discontinued in the 2005 first quarter.
Marketing and selling expenses increased $3.2 million from 2004,
to $42.6 million in 2005. The increase primarily reflects higher sales
force costs.
General and administrative expenses increased $2.0 million from
2004, to $20.3 million in 2005. The increase primarily reflects higher
legal expenses and compensation increases.
2005 Fourth Quarter Financial Results
For the three months ended December 31, 2005, ICOS reported net
income of $5.6 million ($0.09 per share), compared to a net loss of
$33.4 million ($0.53 per share) for the three months ended December
31, 2004.
Equity in earnings of Lilly ICOS was $30.8 million in the fourth
quarter of 2005, compared to equity in losses of $15.5 million in the
fourth quarter of 2004. The $46.3 million improvement reflects
sustained growth in sales of Cialis around the world and planned
reductions in marketing and selling expenses.
ICOS Corporation's total revenue was $18.8 million in the fourth
quarter of 2005, compared to $20.4 million in the fourth quarter of
2004. The fourth quarter of 2004 included $2.2 million of revenue from
licenses of technology.
Total operating expenses were $43.6 million in the fourth quarter
of 2005, compared to $38.0 million in the fourth quarter of 2004,
primarily due to higher research and development expenses.
At December 31, 2005, we had cash, cash equivalents, investment
securities and associated interest receivable of $162.8 million.
Financial Guidance
For 2006, we expect that ICOS Corporation's net loss will be in
the range of $5 million ($0.08 per share) to $25 million ($0.39 per
share), after considering all stock compensation expense, including
the cost of stock options, determined in accordance with FASB Standard
No. 123R (FAS 123R).
We previously stated that we expected ICOS Corporation to report a
"modest" full-year profit in 2006, before stock compensation expense.
As shown below, that continues to be our expectation:
2006
($ millions)
---------------
Expected net loss ($5.0 - $25.0)
Expected total stock compensation expense 31.0 - 29.0
---------------
Expected income before total stock
compensation expense $26.0 - $4.0
===============
On a proforma basis, in accordance with FAS 123R, ICOS
Corporation's 2005 total stock compensation expense was $33.4 million,
and its 2005 proforma net loss was $106.1 million ($1.66 per share).
The $81 million to $101 million reduction in ICOS Corporation's
net loss, from proforma 2005 to 2006, is primarily due to our
expectations that Lilly ICOS' profitability will continue to grow
during 2006, as Cialis revenues increase and associated selling,
general and administrative expenses decrease.
For 2006, we expect that worldwide sales of Cialis will be between
$860 million and $900 million. Based on that revenue estimate, we
expect that Lilly ICOS' 2006 net income will be in the range of $210
million to $240 million, with ICOS Corporation's share being between
$105 million and $120 million.
The full text of prepared remarks made by Michael A. Stein, Senior
Vice President and Chief Financial Officer, during today's investor
conference call, regarding 2005 financial results and expectations for
2006, will be available on the Company's Web site at www.icos.com, in
the Investor/Financial Information section, beginning today at 5:30 pm
Eastern Time, until February 14, 2006 at 5:30 pm Eastern Time.
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 needs such as benign prostatic hyperplasia, hypertension,
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. Eastern
Time, ICOS will host a conference call to review 2005 financial
results and related matters, including financial guidance for 2006.
The conference call can be accessed as a webcast at www.icos.com, in
the Investor/Events section, or by telephone, using the Passcode
808246, live at 612-332-1213, or as a replay at 320-365-3844. The
webcast will be available until February 14, 2006 at 5:30 pm Eastern
Time. The telephone replay will be available until February 8, 2006 at
8:30 pm Eastern Time.
(1) IMS National Prescription Audit Plus(TM), December 2005.
(2) IMS Health. IMS MIDAS, Copyright 2005.
ICOS Corporation and Subsidiaries
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------ -------------------
2005 2004 2005 2004
-------- -------- -------- ---------
Condensed Consolidated
Statements of Operations:
Revenue:
Lilly ICOS collaboration $ 13,374 $ 13,309 $ 50,055 $ 56,031
Contract manufacturing 4,722 4,906 16,045 16,377
Co-promotion services 676 - 5,310 -
Licenses of technology - 2,200 - 2,200
-------- -------- -------- ---------
Total revenue 18,772 20,415 71,410 74,608
-------- -------- -------- ---------
Equity in income (losses) of
Lilly ICOS 30,849 (15,541) 19,519 (130,396)
-------- -------- -------- ---------
Operating expenses:
Research and development 23,346 19,068 88,289 71,791
Marketing and selling 10,725 9,662 42,579 39,392
Cost of contract
manufacturing 4,596 3,440 14,028 12,561
General and administrative 4,979 5,867 20,275 18,247
-------- -------- -------- ---------
Total operating expenses 43,646 38,037 165,171 141,991
-------- -------- -------- ---------
Operating income
(loss) 5,975 (33,163) (74,242) (197,779)
Other income (expense):
Interest expense (1,704) (1,704) (6,817) (6,824)
Interest and other income 1,350 1,420 6,217 6,355
-------- -------- -------- ---------
Net income (loss) $ 5,621 $(33,447) $(74,842) $(198,248)
======== ======== ======== =========
Net income (loss) per common
share - basic $ 0.09 $ (0.53) $ (1.17) $ (3.13)
======== ======== ======== =========
Net income (loss) per common
share - diluted $ 0.09 $ (0.53) $ (1.17) $ (3.13)
======== ======== ======== =========
Weighted average common shares
outstanding - basic 64,167 63,574 63,996 63,435
======== ======== ======== =========
Weighted average common shares
outstanding - diluted 65,372 63,574 63,996 63,435
======== ======== ======== =========
Condensed Consolidated Balance Sheets:
December 31,
-------------------
2005 2004
-------- --------
Cash, cash equivalents,
investment securities and
interest receivable $162,782 $275,769
Receivable from Lilly ICOS 14,300 15,053
Investment in Lilly ICOS 35,497 -
Property and equipment, net 17,995 19,206
Deferred financing costs and
other 11,193 14,953
-------- --------
Total assets $241,767 $324,981
======== ========
Current Liabilities $ 22,387 $ 25,656
Due to Lilly ICOS - 14,147
Convertible subordinated debt 278,650 278,650
Stockholders' equity (deficit) (59,270) 6,528
-------- --------
Total liabilities and
stockholders' equity
(deficit) $241,767 $324,981
======== ========
ICOS Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
2005
-----------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- ------- --------
Revenue:
Lilly ICOS
collaboration $ 10,360 $ 12,693 $ 13,628 $13,374 $ 50,055
Contract
manufacturing 2,474 3,502 5,347 4,722 16,045
Co-promotion
services 950 1,893 1,791 676 5,310
Licenses of
technology - - - - -
-------- -------- -------- ------- --------
Total revenue 13,784 18,088 20,766 18,772 71,410
-------- -------- -------- ------- --------
Equity in income
(losses) of Lilly
ICOS (20,679) (689) 10,038 30,849 19,519
-------- -------- -------- ------- --------
Operating expenses:
Research and
development 22,213 21,295 21,435 23,346 88,289
Marketing and
selling 10,434 10,549 10,871 10,725 42,579
Cost of contract
manufacturing 1,851 3,231 4,350 4,596 14,028
General and
administrative 5,005 4,967 5,324 4,979 20,275
-------- -------- -------- ------- --------
Total operating
expenses 39,503 40,042 41,980 43,646 165,171
-------- -------- -------- ------- --------
Operating
income
(loss) (46,398) (22,643) (11,176) 5,975 (74,242)
Other income (expense):
Interest expense (1,704) (1,705) (1,704) (1,704) (6,817)
Interest and
other income 1,718 1,723 1,426 1,350 6,217
-------- -------- -------- ------- --------
Net income (loss) $(46,384) $(22,625) $(11,454) $ 5,621 $(74,842)
======== ======== ======== ======= ========
Net income (loss)
per common share -
basic $ (0.73) $ (0.35) $ (0.18) $ 0.09 $ (1.17)
======== ======== ======== ======= ========
Net income (loss)
per common share -
diluted $ (0.73) $ (0.35) $ (0.18) $ 0.09 $ (1.17)
======== ======== ======== ======= ========
Weighted average
common shares
outstanding -
basic 63,799 63,941 64,075 64,167 63,996
======== ======== ======== ======= ========
Weighted average
common shares
outstanding -
diluted 63,799 63,941 64,075 65,372 63,996
======== ======== ======== ======= ========
2004
-------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
--------- --------- --------- --------- ----------
Revenue:
Lilly ICOS
collaboration $ 14,067 $ 14,697 $ 13,958 $ 13,309 $ 56,031
Contract
manufacturing 2,456 3,229 5,786 4,906 16,377
Co-promotion
services - - - - -
Licenses of
technology - - - 2,200 2,200
-------- -------- -------- -------- ---------
Total revenue 16,523 17,926 19,744 20,415 74,608
-------- -------- -------- -------- ---------
Equity in income
(losses) of Lilly
ICOS (69,237) (35,090) (10,528) (15,541) (130,396)
-------- -------- -------- -------- ---------
Operating expenses:
Research and
development 17,254 17,536 17,933 19,068 71,791
Marketing and
selling 9,797 10,106 9,827 9,662 39,392
Cost of contract
manufacturing 2,513 2,991 3,617 3,440 12,561
General and
administrative 4,153 4,048 4,179 5,867 18,247
-------- -------- -------- -------- ---------
Total operating
expenses 33,717 34,681 35,556 38,037 141,991
-------- -------- -------- -------- ---------
Operating
income
(loss) (86,431) (51,845) (26,340) (33,163) (197,779)
Other income (expense):
Interest expense (1,711) (1,705) (1,704) (1,704) (6,824)
Interest and
other income 1,839 1,652 1,444 1,420 6,355
-------- -------- -------- -------- ---------
Net income (loss) $(86,303) $(51,898) $(26,600) $(33,447) $(198,248)
======== ======== ======== ======== =========
Net income (loss)
per common share -
basic $ (1.36) $ (0.82) $ (0.42) $ (0.53) $ (3.13)
======== ======== ======== ======== =========
Net income (loss)
per common share -
diluted $ (1.36) $ (0.82) $ (0.42) $ (0.53) $ (3.13)
======== ======== ======== ======== =========
Weighted average
common shares
outstanding -
basic 63,237 63,429 63,498 63,574 63,435
======== ======== ======== ======== =========
Weighted average
common shares
outstanding -
diluted 63,237 63,429 63,498 63,574 63,435
======== ======== ======== ======== =========
ICOS Corporation and Subsidiaries
SUMMARIZED OPERATING RESULTS OF LILLY ICOS LLC
(in thousands)
(unaudited)
2005
---------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------- --------- --------- --------- ----------
Revenue:
Product sales, net
United States $42,744 $71,118 $77,438 $81,615 $272,915
Europe 56,264 60,925 61,992 65,311 244,492
Canada and
Mexico 12,186 13,839 14,727 18,575 59,327
---------- --------- --------- --------- ----------
111,194 145,882 154,157 165,501 576,734
Royalties 7,790 9,010 8,172 8,997 33,969
---------- --------- --------- --------- ----------
Total revenue 118,984 154,892 162,329 174,498 610,703
---------- --------- --------- --------- ----------
Expenses:
Cost of sales(a) 9,752 11,934 12,378 13,200 47,264
Selling, general
and
administrative 137,027 126,232 112,152 84,416 459,827
Research and
development 13,874 18,413 18,035 15,494 65,816
---------- --------- --------- --------- ----------
Total expenses 160,653 156,579 142,565 113,110 572,907
---------- --------- --------- --------- ----------
Net income (loss) $(41,669) $(1,687) $19,764 $61,388 $37,796
========== ========= ========= ========= ==========
ICOS Corporation's
share of net
income (loss) $(20,679) $ (689) $10,038 $30,849 $19,519
========== ========= ========= ========= ==========
(a) Cost of sales includes $103 per month of license fee amortization
applicable only to Eli Lilly and Company's interest in Lilly ICOS.
2004
---------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
---------- --------- --------- --------- ----------
Revenue:
Product sales, net
United States $32,807 $50,768 $70,226 $52,783 $206,584
Europe 36,356 45,301 43,414 52,859 177,930
Canada and
Mexico 5,854 8,931 9,380 13,063 37,228
---------- --------- --------- --------- ----------
75,017 105,000 123,020 118,705 421,742
Royalties 6,652 6,449 6,210 6,809 26,120
---------- --------- --------- --------- ----------
Total revenue 81,669 111,449 129,230 125,514 447,862
---------- --------- --------- --------- ----------
Expenses:
Cost of sales(a) 6,573 8,982 10,173 10,338 36,066
Selling, general
and
administrative 195,053 157,838 123,222 130,398 606,511
Research and
development 18,827 15,119 17,203 16,169 67,318
---------- --------- --------- --------- ----------
Total expenses 220,453 181,939 150,598 156,905 709,895
---------- --------- --------- --------- ----------
Net income (loss) $(138,784) $(70,490) $(21,368) $(31,391) $(262,033)
========== ========= ========= ========= ==========
ICOS Corporation's
share of net
income (loss) $(69,237) $(35,090) $(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.
CONTACT: ICOS Corporation
Lacy Fitzpatrick, 425-415-2207