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LILLY ICOS LLC REPORTS FIRST FULL-YEAR PROFIT.

Lilly ICOS LLC (Lilly ICOS) (NYSE:LLY) (NYSE:and) (NYSE:Nasdaq:) (NYSE:ICOS) has released 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.

"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."

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.

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.

For more information, call 425/415-2207.
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Publication:Biotech Financial Reports
Geographic Code:1USA
Date:Mar 1, 2006
Words:830
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