Exhibit 99
ICOS Corporation Reports Results for 2006 First Quarter;
Strong Performance of Cialis Propels Near Breakeven for Quarter;
Cialis Captures Leading ED Market Share in Eleven Countries in February 2006
BOTHELL, Wash.--(BUSINESS WIRE)--May 4, 2006--ICOS Corporation
(Nasdaq:ICOS) today released its financial results for the three
months ended March 31, 2006 and summarized recent events.
"ICOS is off to a strong start in 2006," stated Paul Clark, ICOS
Chairman and CEO. "Cialis continues to gain market share. In March
2006, Cialis captured 25.8% share of U.S. total prescriptions, an
increase of 4.0 percentage points of share since March 2005(1). In
February 2006, Cialis held 34.0% aggregate market share in Europe,
Canada and Mexico, an increase of 4.7 percentage points of share since
February 2005(2)."
Lilly ICOS(3) posted solid profitability, in the 2006 first
quarter, as a result of continued sales growth and reduced selling,
general and administrative expenses. For the three months ended March
31, 2006, Lilly ICOS reported net income of $65.0 million, a $106.7
million improvement compared to the net loss of $41.7 million reported
for the 2005 first quarter.
Worldwide sales of Cialis totaled $222.7 million during the 2006
first quarter, a 48% increase compared to the first quarter of 2005.
2006 first quarter sales of Cialis in North America and Europe were
$167.3 million, a 50% increase compared to the same period in 2005,
when it is estimated that U.S. wholesalers reduced inventory levels by
approximately $27 million.
In February 2006, Cialis was the market share leader in eleven
countries, including France, where it has been the market leader for
14 consecutive months. In Portugal, Cialis became the market leader in
January 2006 and captured 41.4% share of tablets from wholesalers to
pharmacies in February 2006(4). Other countries where Cialis is the
market leader include Saudi Arabia, South Africa and Venezuela.
2006 First Quarter Financial Results
ICOS' 2006 first quarter adjusted net income (a non-GAAP measure
equal to reported net loss before stock-based compensation expense)
was $7.2 million ($0.11 per share)(5), compared to the net loss of
$46.4 million ($0.73 per share) reported for the 2005 first quarter.
For the 2006 first quarter, ICOS reported a net loss of $0.7 million
($0.01 per share), compared to a proforma net loss of $54.1 million
($0.85 per share) for the 2005 first quarter.
ICOS adopted the new accounting requirements related to expensing
stock-based compensation (FAS 123R) beginning January 1, 2006. The
accompanying Schedules 2, 4 and 5 include additional information
regarding the impact of this accounting change.
Our 50% share of Lilly ICOS' earnings was $32.6 million in the
first quarter of 2006, compared to equity in losses of $20.7 million
in the first quarter of 2005. The $53.3 million improvement reflects
growth in sales of Cialis around the world, planned reductions in
marketing and selling costs, and the impact on Lilly ICOS of an
approximate $27 million estimated aggregate reduction of U.S.
wholesaler inventories of Cialis during the 2005 first quarter.
ICOS Corporation's total revenue was $18.7 million in the first
quarter of 2006, compared to $13.8 million in the first quarter of
2005.
Collaboration revenue from Lilly ICOS totaled $15.0 million in the
2006 first quarter, compared to $10.4 million in the first quarter of
2005. The increase primarily reflects incremental research and
development activities performed by ICOS personnel on behalf of Lilly
ICOS and reimbursable costs for 40 contract (non-employee) sales
representatives retained to promote Cialis in the U.S. beginning in
January 2006.
Total operating expenses were $51.7 million for the three months
ended March 31, 2006, compared to proforma $47.2 million for the three
months ended March 31, 2005.
Marketing and selling expenses were $13.6 million for the three
months ended March 31, 2006, compared to proforma $11.6 million for
the three months ended March 31, 2005. The increase primarily reflects
incremental costs for the aforementioned contract sales
representatives.
At March 31, 2006, we had cash, cash equivalents, investment
securities and associated interest receivable of $170.5 million.
(1) IMS National Prescription Audit Plus(TM), March 2006.
(2) IMS Health, IMS MIDAS (based on PDE5 inhibitor tablets from
wholesalers to pharmacies), February 2006.
(3) Lilly ICOS LLC (Lilly ICOS) is a 50/50 joint venture between
ICOS Corporation and Eli Lilly and Company, that is marketing
Cialis(R), in North America and Europe, for the treatment of
erectile dysfunction (ED).
(4) IMS Health, IMS MIDAS (based on PDE5 inhibitor tablets from
wholesalers to pharmacies), February 2006.
(5) 2006 reported net loss of $0.653 million ($0.01 per share) plus
stock-based compensation expense of $7.811 million, equals
adjusted net income of $7.158 million ($0.11 per share).
Financial Guidance
On February 7, 2006, ICOS stated that it expected 2006 worldwide
sales of Cialis between $860 million and $900 million. ICOS now
anticipates that 2006 worldwide sales of Cialis will be near the upper
end of that range. Based on this revenue outlook, ICOS now expects
Lilly ICOS' 2006 net income to be near the upper end of the $210
million to $240 million range previously communicated. Consistent with
our improved outlook for Lilly ICOS, ICOS now expects its 2006 net
loss to be near the lower end of the $5.0 million ($0.08 per share) to
$25.0 million ($0.39 per share) net loss range previously
communicated.
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 2006 first quarter
financial results and related matters, including financial guidance
and plans 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 824479, live at 612-288-0329, or as a replay at
320-365-3844. The webcast will be available until May 11, 2006 at 5:30
pm Eastern Time. The telephone replay will be available until May 5,
2006 at 8:00 pm Eastern Time.
-- Selected financial data follows--
ICOS Corporation and Subsidiaries
Schedule 1 - SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data)
(unaudited)
Three Months Ended March 31,
-----------------------------
2005
------------------
Proforma As
2006 (a) Reported
-------- --------- ---------
Condensed Consolidated Statements of
Operations:
Revenue:
Lilly ICOS collaboration $ 14,976 $ 10,360 $ 10,360
Contract manufacturing 3,751 2,474 2,474
Co-promotion services - 950 950
-------- -------- --------
Total revenue 18,727 13,784 13,784
-------- -------- --------
Equity in earnings (losses) of Lilly ICOS 32,636 (20,679) (20,679)
-------- -------- --------
Operating expenses:
Research and development 25,819 25,551 22,213
Marketing and selling 13,556 11,588 10,434
Cost of contract manufacturing 3,790 2,142 1,851
General and administrative 8,567 7,912 5,005
-------- -------- --------
Total operating expenses 51,732 47,193 39,503
-------- -------- --------
Operating loss (369) (54,088) (46,398)
Other income (expense):
Interest expense (1,704) (1,704) (1,704)
Interest and other income 1,420 1,718 1,718
-------- -------- --------
Net loss $ (653) $(54,074) $(46,384)
======== ======== ========
Net loss per common share - basic and
diluted $ (0.01) $ (0.85) $ (0.73)
======== ======== ========
Weighted average common shares
outstanding - basic and diluted 64,320 63,799 63,799
======== ======== ========
Condensed Consolidated Balance Sheets: March 31, Dec. 31,
2006 2005
-------- --------
Cash, cash equivalents, investment
securities and interest receivable $170,524 $162,782
Receivable from Lilly ICOS 15,515 14,300
Investment in Lilly ICOS 33,394 35,497
Property and equipment, net 18,111 17,995
Deferred financing costs and other 10,952 11,193
-------- --------
Total assets $248,496 $241,767
======== ========
Current liabilities $ 20,760 $ 22,387
Convertible subordinated debt 278,650 278,650
Stockholders' deficit (50,914) (59,270)
-------- --------
Total liabilities and
stockholders' deficit $248,496 $241,767
======== ========
(a) Effective January 1, 2006, we adopted FAS 123R and began expensing
all stock-based compensation. 2005 proforma amounts reflect our
results of operations as if we had applied the provisions of FAS
123R beginning January 1, 2005. See also accompanying Schedules
2, 4 and 5.
ICOS Corporation and Subsidiaries
Schedule 2 - CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
2006 2005 Proforma (a)
-------- -------------------
Q1 Q1 Q2
--------- --------- ---------
Revenue:
Lilly ICOS collaboration $ 14,976 $ 10,360 $ 12,693
Contract manufacturing 3,751 2,474 3,502
Co-promotion services - 950 1,893
-------- -------- --------
Total revenue 18,727 13,784 18,088
-------- -------- --------
Equity in income (losses) of
Lilly ICOS 32,636 (20,679) (689)
-------- -------- --------
Operating expenses:
Research and development 25,819 25,551 24,514
Marketing and selling 13,556 11,588 11,652
Cost of contract manufacturing 3,790 2,142 3,596
General and administrative 8,567 7,912 8,292
-------- -------- --------
Total operating expenses 51,732 47,193 48,054
-------- -------- --------
Operating loss (369) (54,088) (30,655)
Other income (expense):
Interest expense (1,704) (1,704) (1,705)
Interest and other income 1,420 1,718 1,723
-------- -------- --------
Net loss $ (653) $(54,074) $(30,637)
======== ======== ========
Net loss per common share - basic
and diluted $ (0.01) $ (0.85) $ (0.48)
======== ======== ========
Weighted average common shares
outstanding - basic and diluted 64,320 63,799 63,941
======== ======== ========
2005 Proforma (a)
-------------------------------
Q3 Q4 TOTAL
---------- --------- ----------
Revenue:
Lilly ICOS collaboration $ 13,628 $13,374 $ 50,055
Contract manufacturing 5,347 4,722 16,045
Co-promotion services 1,791 676 5,310
-------- ------- ---------
Total revenue 20,766 18,772 71,410
-------- ------- ---------
Equity in income (losses) of
Lilly ICOS 10,038 30,849 19,519
-------- ------- ---------
Operating expenses:
Research and development 24,516 26,276 100,857
Marketing and selling 11,938 11,779 46,957
Cost of contract manufacturing 4,726 5,013 15,477
General and administrative 8,676 8,257 33,137
-------- ------- ---------
Total operating expenses 49,856 51,325 196,428
-------- ------- ---------
Operating loss (19,052) (1,704) (105,499)
Other income (expense):
Interest expense (1,704) (1,704) (6,817)
Interest and other income 1,426 1,350 6,217
-------- ------- ---------
Net loss $(19,330) $(2,058) $(106,099)
======== ======= =========
Net loss per common share - basic
and diluted $ (0.30) $ (0.03) $ (1.66)
======== ======= =========
Weighted average common shares
outstanding - basic and diluted 64,075 64,167 63,996
======== ======= =========
(a) Effective January 1, 2006, we adopted FAS 123R and began expensing
all stock-based compensation. 2005 proforma amounts reflect our
results of operations as if we had applied the provisions of FAS
123R beginning January 1, 2005.
ICOS Corporation and Subsidiaries
Schedule 3 - SUMMARIZED OPERATING RESULTS OF LILLY ICOS LLC
(in thousands)
(unaudited)
2006 2005
--------- ------------------
Q1 Q1 Q2
--------- --------- --------
Revenue:
Product sales, net
United States $ 82,537 $ 42,744 $ 71,118
Europe 67,586 56,264 60,925
Canada and Mexico 17,151 12,186 13,839
-------- --------- --------
167,274 111,194 145,882
Royalties 11,088 7,790 9,010
-------- -------- --------
Total revenue 178,362 118,984 154,892
-------- -------- --------
Expenses:
Cost of sales (a) 13,382 9,752 11,934
Selling, general and
administrative 86,517 137,027 126,232
Research and development 13,502 13,874 18,413
-------- -------- --------
Total expenses 113,401 160,653 156,579
-------- -------- --------
Net income (loss) $ 64,961 $(41,669) $ (1,687)
======== ======== ========
ICOS Corporation's share of
net income (loss) $ 32,636 $(20,679) $ (689)
======== ======== ========
2005
-----------------------------
Q3 Q4 TOTAL
--------- --------- ---------
Revenue:
Product sales, net
United States $ 77,438 $ 81,615 $272,915
Europe 61,992 65,311 244,492
Canada and Mexico 14,727 18,575 59,327
-------- -------- --------
154,157 165,501 576,734
Royalties 8,172 8,997 33,969
-------- -------- --------
Total revenue 162,329 174,498 610,703
-------- -------- --------
Expenses:
Cost of sales (a) 12,378 13,200 47,264
Selling, general and
administrative 112,152 84,416 459,827
Research and development 18,035 15,494 65,816
-------- -------- --------
Total expenses 142,565 113,110 572,907
-------- -------- --------
Net income (loss) $ 19,764 $ 61,388 $ 37,796
======== ======== ========
ICOS Corporation's share of
net income (loss) $ 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.
ICOS Corporation and Subsidiaries
Schedule 4 - TOTAL STOCK-BASED COMPENSATION EXPENSE
(in thousands)
(unaudited)
The following table presents stock-based compensation expense for 2006
as reported, 2005 as reported and 2005 proforma as if ICOS had applied
FAS 123R during that year.
2006 2005
------ ---------------------------------------
Q1 Q1 Q2 Q3 Q4 Total
------- ------- ------- ------- ------- --------
As reported
Stock options $6,487 $ - $ - $ - $ - $ -
Restricted shares 1,121 - - 946 1,167 2,113
Restricted stock
units 203 - - - - -
------ ------ ------ ------ ------ -------
7,811 - - 946 1,167 2,113
------ ------ ------ ------ ------ -------
Proforma adjustments
Stock options - 7,690 8,012 7,876 7,679 31,257
Restricted shares - - - - - -
Restricted stock
units - - - - - -
------ ------ ------ ------ ------ -------
- 7,690 8,012 7,876 7,679 31,257
------ ------ ------ ------ ------ -------
Total (2006 as
reported; 2005
proforma)
Stock options 6,487 7,690 8,012 7,876 7,679 31,257
Restricted shares 1,121 - - 946 1,167 2,113
Restricted stock
units 203 - - - - -
------ ------ ------ ------ ------ -------
$7,811 $7,690 $8,012 $8,822 $8,846 $33,370
====== ====== ====== ====== ====== =======
ICOS Corporation and Subsidiaries
Schedule 5 - ALLOCATION OF TOTAL STOCK-BASED COMPENSATION EXPENSE
(in thousands)
(unaudited)
The following table presents the allocation of stock-based
compensation expense for 2006 as reported, 2005 as reported and 2005
proforma as if ICOS had applied FAS 123R during that year.
2006 2005
------ ---------------------------------------
Q1 Q1 Q2 Q3 Q4 Total
------- ------- ------- ------- ------- --------
As reported
Research and
development $3,178 $ - $ - $ 487 $ 602 $ 1,089
Marketing and
selling 1,064 - - 96 116 212
Cost of contract
manufacturing 282 - - 45 70 115
General and
administrative 3,287 - - 318 379 697
------ ------ ------ ------ ------ -------
7,811 - - 946 1,167 2,113
------ ------ ------ ------ ------ -------
Proforma adjustments
Research and
development - 3,338 3,219 3,081 2,930 12,568
Marketing and
selling - 1,154 1,103 1,067 1,054 4,378
Cost of contract
manufacturing - 291 365 376 417 1,449
General and
administrative - 2,907 3,325 3,352 3,278 12,862
------ ------ ------ ------ ------ -------
- 7,690 8,012 7,876 7,679 31,257
------ ------ ------ ------ ------ -------
Total (2006 as
reported; 2005
proforma)
Research and
development 3,178 3,338 3,219 3,568 3,532 13,657
Marketing and
selling 1,064 1,154 1,103 1,163 1,170 4,590
Cost of contract
manufacturing 282 291 365 421 487 1,564
General and
administrative 3,287 2,907 3,325 3,670 3,657 13,559
------ ------ ------ ------ ------ -------
$7,811 $7,690 $8,012 $8,822 $8,846 $33,370
====== ====== ====== ====== ====== =======
CONTACT: ICOS Corporation
Lacy Fitzpatrick, 425-415-2207