Lilly ICOS LLC Reports Results for Second Quarter of 2005 - Quarterly net loss narrows to $1.7 million - - Worldwide sales of Cialis(R), since launch, exceed $1 billion -Thursday July 21, 7:00 am ET
BOTHELL, Wash. and INDIANAPOLIS, Ind., July 21 /PRNewswire-FirstCall/ -- Lilly ICOS LLC (Lilly ICOS) (NYSE: LLY and Nasdaq: ICOS) is releasing its financial results for the second quarter ended June 30, 2005. The Company has advanced to the point where it is on the cusp of profitability as a result of sustained sales growth and reductions in marketing and selling expenses. Worldwide sales of Cialis® (tadalafil)(1) in the second quarter of 2005 totaled $190.9 million, an increase of 39% compared to $137.2 million in the second quarter of 2004. U.S. sales of
Cialis were $71.1 million in the second quarter of 2005, compared to $50.8 million in the second quarter of 2004.
Cialis Net Sales (unaudited):
----------------------------
(in millions)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2005 2004 2005 2004
-------- -------- -------- -------
Lilly ICOS Territories:
United States 71.1 $50.8 $113.9 $83.6
Europe (2) 60.9 45.3 117.2 81.6
Canada and Mexico 13.8 8.9 26.0 14.8
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Total Lilly ICOS 145.8 105.0 257.1 180.0
Lilly Territories 45.1 32.2 84.0 65.5
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Worldwide Total $190.9 $137.2 $341.1 $245.5
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"It is exciting that, in 2005, cumulative worldwide sales of Cialis passed the $1 billion mark," stated John Bamforth, Lilly Global Marketing Director. "The progress we have made supports our long-standing belief that men value the benefits that Cialis offers."
Paul Clark, ICOS Chairman, President and CEO stated, "The global launches of Cialis have been successful. Our strategic plan has focused on gaining market share. In the U.S., market share of total prescriptions of Cialis increased 160 basis points in the second quarter of 2005, compared to the previous quarter, to 22.7%(3). In every major Lilly ICOS market, Cialis has far surpassed Levitra® (vardenafil HC1). Additionally, Cialis has passed Viagra® (sildenafil citrate) in a number of countries, including France -- and is closing in on it in several others. Cialis captured 31.7% of aggregate market share across Europe, Canada and Mexico in May 2005."(4)
Financial Results
For the three months ended June 30, 2005, Lilly ICOS reported a net loss of $1.7 million, compared to a net loss of $70.5 million for the three months ended June 30, 2004. The decreased net loss results from an increase of $43.4 million in total revenue, combined with a $25.4 million reduction in total expenses.
Total revenue for the second quarter of 2005 was $154.9 million, compared to $111.4 million for the second quarter of 2004. Revenue for the 2005 period includes $9.0 million in royalties on sales reported by Lilly, compared to $6.4 million in royalty revenue for the second quarter of 2004. The increase in overall Lilly ICOS revenue reflects the continued growth of Cialis in the Lilly ICOS territories since its 2003 introduction, as well as its global expansion in countries where it is sold by Lilly.
In December 2004, Lilly ICOS began to reduce U.S. wholesaler inventories of Cialis to targeted levels and, by early February 2005, was party to new agreements with its U.S. wholesalers. As a result, it is estimated that approximately $27 million of U.S. wholesaler inventory reductions of Cialis occurred during the first quarter of 2005. No significant additional wholesaler inventory reductions are anticipated.
Selling, general and administrative expenses decreased $31.6 million from the second quarter of 2004, to $126.2 million in the second quarter of 2005. The decrease is primarily due to the planned higher level of sales and marketing expenses, in the first half of 2004, following the November 2003 U.S. launch of Cialis.
Research and development expenses were $18.4 million in the second quarter of 2005, compared to $15.1 million in the second quarter of 2004. The increase is primarily due to incremental costs associated with pursuing additional indications for tadalafil, including benign prostatic hyperplasia and pulmonary arterial hypertension.
For the six months ended June 30, 2005, Lilly ICOS reported a net loss of $43.4 million, compared to a net loss of $209.3 million for the six months ended June 30, 2004. The decrease is due to increases in Lilly ICOS revenues since the 2003 Cialis launch and a reduction of sales and marketing expenses.
About Lilly ICOS LLC
Lilly ICOS LLC, a joint venture equally owned by ICOS Corporation and Eli Lilly and Company, is marketing Cialis for the treatment of erectile dysfunction in North America and Europe.
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, 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. 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 management 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 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-
Lilly ICOS LLC
Condensed Consolidated Statements of Operations
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Revenue
Product sales, net $145,882 $105,000 $257,076 $180,017
Royalties 9,010 6,449 16,800 13,101
--------- --------- --------- ---------
Total revenue 154,892 111,449 273,876 193,118
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Expenses
Cost of sales 11,934 8,982 21,686 15,555
Selling, general and
administrative 126,232 157,838 263,259 352,891
Research and
development 18,413 15,119 32,287 33,946
--------- --------- --------- ---------
Total expenses 156,579 181,939 317,232 402,392
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Net loss $(1,687) $(70,490) $(43,356) $(209,274)
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Lilly ICOS LLC
SUMMARIZED OPERATING RESULTS
(in thousands)
(unaudited)
2005
---------------------------------
Q1 Q2 TOTAL
--------- ---------- ----------
Revenue:
Product sales, net:
United States $42,744 $71,118 $113,862
Europe 56,264 60,925 117,189
Canada and Mexico 12,186 13,839 26,025
--------- ---------- ----------
111,194 145,882 257,076
Royalties 7,790 9,010 16,800
--------- ---------- ----------
Total revenue 118,984 154,892 273,876
--------- ---------- ----------
Expenses:
Cost of sales 9,752 11,934 21,686
Selling, general and
administrative 137,027 126,232 263,259
Research and development 13,874 18,413 32,287
--------- ---------- ----------
Total expenses 160,653 156,579 317,232
--------- ---------- ----------
Net loss $(41,669) $(1,687) $(43,356)
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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
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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 loss $(138,784) $(70,490) $(21,368) $(31,391) $(262,033)
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(1)
Cialis® is a registered trademark of Lilly ICOS LLC. All other trademarks are the property of their respective owners.
(2) Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
(3) IMS Health, IMS National Prescription Audit Plus(TM), (based on total prescriptions) April, May and June 2005.
(4) Based on calculations using IMS Health, IMS MIDAS (PDE5 inhibitor tablets from wholesalers to pharmacies) May 2005.
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