- 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., Jan. 20
/PRNewswire-FirstCall/ -- Lilly ICOS LLC (Lilly ICOS)
(NYSE:LLYNYSE:andNYSE:Nasdaq:NYSE: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." 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. 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. (1) Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands,
Norway, Portugal, Spain, Sweden, Switzerland and the United
Kingdom. 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) ========= ========== =========
======== Lilly ICOS LLC SUMMARIZED OPERATING RESULTS (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
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 ========
======= ======= ======= ======== Lilly ICOS LLC SUMMARIZED
OPERATING RESULTS (in thousands) (unaudited) 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 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) ========= ========
======== ======== ========= (Logo:
http://www.newscom.com/cgi-bin/prnh/20040122/LILLYICOSLOGO ) First
Call Analyst: FCMN Contact: terrafox@lilly.com
http://www.newscom.com/cgi-bin/prnh/20040122/LILLYICOSLOGO
DATASOURCE: Lilly ICOS LLC CONTACT: Lacy Fitzpatrick of ICOS,
+1-425-415-2207; or Phil Belt of Lilly, +1-317-276-2506
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