Lilly ICOS LLC Reports First Full-Year Profit in its History (1)

BOTHELL, Washington and INDIANAPOLIS, Indiana, January 20 /PRNewswire/ --

    
          - 2005 Fourth Quarter Net Income Surges to US$61.4 Million
                      - 2005 Worldwide Sales Grow 35%
              - Company Provides Update on Clinical Plan for BPH

Lilly ICOS LLC (Lilly ICOS) (NYSE: LLY and Nasdaq: ICOS) is releasing its financial results for the fourth quarter and year ended December 31, 2005. For the 2005 year, net income was US$37.8 million, compared to a net loss of US$262.0 million in 2004. Worldwide sales of Cialis(R) (tadalafil) in 2005 totaled US$746.6 million, an increase of 35% compared to US$552.3 million in 2004.

    
    Cialis Net Sales:
     -----------------
     (in millions USD)
                                     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 US$37.8 million, compared to a net loss of US$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 US$610.7 million, compared to US$447.9 million for 2004. Lilly ICOS revenue for 2005 includes US$34.0 million in royalties on sales reported by Lilly, compared to US$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 US$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 US$146.7 million from the year ended December 31, 2004, to US$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 US$61.4 million, compared to a net loss of US$31.4 million for the three months ended December 31, 2004. The shift to profitability resulted from an increase of US$49.0 million in total revenue and a reduction of US$43.8 million in expenses.

Total Lilly ICOS revenue for the fourth quarter of 2005 was US$174.5 million, compared to US$125.5 million for the fourth quarter of 2004. Lilly ICOS revenue for the fourth quarter of 2005 included US$9.0 million in royalties on sales reported by Lilly, compared to US$6.8 million in royalty revenue for the fourth quarter of 2004.

Selling, general and administrative expenses decreased US$46.0 million from the fourth quarter of 2004, to US$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

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