EXHIBIT 99
[LILLY ICOS LOGO]
Date: July 21, 2006
Refer to: (317) 276-5795 - Terra Fox, Lilly
(425) 415-2207 - Lacy Fitzpatrick, ICOS
Lilly ICOS LLC Reports Record Sales and Net Income for Second Quarter of 2006
- Worldwide Sales of Cialis Top $233 Million -
- Net Income Grows to $75.8 Million for 2006 Second Quarter -
Bothell, WASH. and Indianapolis, IND. - July 21, 2006 - Lilly ICOS LLC (Lilly
ICOS) (NYSE: LLY and Nasdaq: ICOS) is releasing its financial results for the
2006 second quarter, ended June 30. Worldwide sales of Cialis(R) (tadalafil)(1)
totaled $233.2 million in the second quarter of 2006, an increase of 22%
compared to the second quarter of 2005. Net income was $75.8 million for the
2006 second quarter, compared to a net loss of $1.7 million in the 2005 second
quarter.
Cialis Net Sales:
- -----------------
(in millions)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2006 2005 2006 2005
----------- --------- ----------- ---------
Lilly ICOS Territories:
United States $ 93.8 $ 71.1 $ 176.3 $ 113.9
Europe(2) 71.4 60.9 139.0 117.2
Canada and Mexico 17.5 13.8 34.6 26.0
----------- --------- ----------- ---------
Total Lilly ICOS 182.7 145.8 349.9 257.1
Royalty Territories 50.5 45.1 106.2 84.0
----------- --------- ----------- ---------
Worldwide Total $ 233.2 $190.9 $ 456.1 $ 341.1
=========== ========= =========== =========
"Cialis delivered strong worldwide sales in the second quarter, due to both
gains in market share and growth of the ED market," said John Bamforth,
Director, International Marketing, for Lilly. "Cialis has continued to increase
market share across the Lilly ICOS territories every quarter since it was
launched, in 2003. We are especially pleased to note the resumption of
year-over-year growth in the U.S. ED market in the second quarter 2006."
- -------------
(1) Cialis(R) is a registered trademark of Lilly ICOS LLC.
(2) Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland,
Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom.
1
In the U.S., market share of total prescriptions of Cialis reached 26.1% in June
2006, an increase of 2.8 percentage points from June 2005.(3) Across Europe,
Canada, and Mexico, Cialis captured 34.4% of aggregate market share in May 2006,
an increase of 3.5 percentage points from May 2005.(4) For the 2006 second
quarter, the U.S. ED market grew 3.3%, compared to the second quarter of
2005.(5)
Within the past three months, Lilly ICOS has submitted regulatory filings in
Europe and Canada, seeking approval for Cialis Once-A-Day to treat erectile
dysfunction. Lilly ICOS plans to file a supplemental new drug application, for
once-a-day dosing of Cialis, in the United States later this year.
"We are excited about the potential for Cialis as a once-a-day treatment for
ED," remarked Paul Clark, ICOS Chairman and CEO. "The ED medical experts that we
have consulted with are enthusiastic about the possibility that Cialis
Once-A-Day could provide a welcome alternative for the man with ED who takes a
PDE5 inhibitor more frequently than average. In market research, patients with
ED have expressed interest in the possibility of treating this chronic condition
with a once-daily tablet."
Lilly ICOS is continuing to evaluate tadalafil for potential benefits in
treating other medical indications. Later this year, Lilly ICOS is expected to
begin enrolling patients in a Phase 2b clinical study of tadalafil for the
treatment of benign prostatic hyperplasia (BPH). Results will be available from
the Phase 2 proof-of-concept study of tadalafil in hypertension this year. And,
patient enrollment is continuing in a Phase 3 clinical study of tadalafil for
the treatment of pulmonary arterial hypertension, a life threatening condition.
Financial Results
- -----------------
Lilly ICOS reported net income of $75.8 million for the three months ended June
30, 2006, compared to a net loss of $1.7 million for the three months ended June
30, 2005, reflecting a $42.3 million (22%) increase in worldwide sales of Cialis
and a $35.9 million (28%) reduction in selling, general and administrative
expenses.
Total Lilly ICOS revenue for the second quarter of 2006 was $194.3 million,
compared to $154.9 million for the second quarter of 2005, an increase of 25%.
The increase primarily reflects the impact of market share gains, market growth
and price increases. Royalty revenue in the second quarter of 2006 includes $1.5
million related to a reconciliation of third party sales.
Cost of sales was 7.9% of net product sales in the 2006 second quarter, compared
to 8.2% in the 2005 second quarter. The percentage decrease was primarily the
result of price increases in 2005 and 2006.
- -------------
(3) IMS Health, IMS National Prescription Audit Plus(TM), (based on total
prescriptions), June 2006 and 2005.
(4) Based on PDE5 inhibitor tablets from wholesalers to pharmacies, IMS Health,
IMS MIDAS May 2006 and 2005.
(5) Based on calculations using IMS National Prescription Audit Plus(TM), (PDE5
prescriptions dispensed at pharmacies), June 2006 and 2005.
2
The $35.9 million decrease in selling, general and administrative expenses, in
the second quarter of 2006, compared to the second quarter of 2005, was
primarily due to refinements in our U.S. sales force configuration and lower
consumer marketing expenditures in the second quarter of 2006.
Research and development expenses were $13.8 million in the second quarter of
2006, compared to $18.4 million in the second quarter of 2005. The decrease was
primarily the result of completing, in 2005, the BPH Phase 2 clinical study and
once-a-day dosing trials, as well as other regulatory studies, partially offset
by increased costs associated with the ongoing Phase 2 proof-of-concept study in
hypertension and Phase 3 clinical study in PAH.
For the six months ended June 30, 2006, Lilly ICOS reported net income of $140.7
million, compared to a net loss of $43.4 million for the six months ended June
30, 2005. The improvement was primarily due to the $115.0 million (34%) increase
in worldwide sales of Cialis and an $86.4 million (33%) reduction of selling,
general and administrative expenses.
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 conditions such as benign prostatic
hyperplasia, hypertension, pulmonary arterial 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.
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 Cialis 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--
3
Lilly ICOS LLC
Condensed Consolidated Statements of Operations
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- ------------------------
2006 2005 2006 2005
--------- ---------- --------- ----------
Revenue:
Product sales, net $182,661 $ 145,882 $349,935 $257,076
Royalties 11,642 9,010 22,730 16,800
--------- ---------- --------- ----------
Total revenue 194,303 154,892 372,665 273,876
--------- ---------- --------- ----------
Expenses:
Cost of sales 14,370 11,934 27,752 21,686
Selling, general and
administrative 90,342 126,232 176,859 263,259
Research and development 13,820 18,413 27,322 32,287
--------- ---------- --------- ----------
Total expenses 118,532 156,579 231,933 317,232
--------- ---------- --------- ----------
Net income (loss) $ 75,771 $ (1,687) $140,732 $(43,356)
========= ========== ========= ==========
4
Lilly ICOS LLC
SUMMARIZED OPERATING RESULTS
(in thousands)
(unaudited)
2006 2005
------------------------------- -------------------------------------------------------
Q1 Q2 TOTAL Q1 Q2 Q3 Q4 TOTAL
-------- -------- -------- --------- -------- -------- --------- --------
Revenue:
Product sales, net:
United States $ 82,537 $ 93,779 $176,316 $ 42,744 $ 71,118 $ 77,438 $ 81,615 $272,915
Europe 67,586 71,374 138,960 56,264 60,925 61,992 65,311 244,492
Canada and Mexico 17,151 17,508 34,659 12,186 13,839 14,727 18,575 59,327
-------- -------- -------- -------- -------- -------- -------- --------
167,274 182,661 349,935 111,194 145,882 154,157 165,501 576,734
Royalties 11,088 11,642 22,730 7,790 9,010 8,172 8,997 33,969
-------- -------- -------- -------- -------- -------- -------- --------
Total revenue 178,362 194,303 372,665 118,984 154,892 162,329 174,498 610,703
-------- -------- -------- -------- -------- -------- -------- --------
Expenses:
Cost of sales 13,382 14,370 27,752 9,752 11,934 12,378 13,200 47,264
Selling, general and
administrative 86,517 90,342 176,859 137,027 126,232 112,152 84,416 459,827
Research and development 13,502 13,820 27,322 13,874 18,413 18,035 15,494 65,816
-------- -------- -------- -------- -------- -------- -------- --------
Total expenses 113,401 118,532 231,933 160,653 156,579 142,565 113,110 572,907
-------- -------- -------- -------- -------- -------- -------- --------
Net income (loss) $ 64,961 $ 75,771 $140,732 $(41,669) $ (1,687) $ 19,764 $ 61,388 $ 37,796
======== ======== ======== ======== ======== ======== ======== ========
5