« News Home

January 2007 »

Lilly/Icos says sales of Cialis jumped 28 percent
Friday, January 19, 2007

Sales of Cialis climbed to a record $269.2 million in the fourth quarter, a 28 percent increase from a year earlier.

The world's No. 2 impotence drug had $971 million in worldwide sales in 2006, up from $746 million in 2005, according to a statement Thursday from drug makers Eli Lilly & Co. and Bothell-based Icos, who co-market Cialis.

With higher sales and lower spending on advertising, profit rose to $320.3 million in 2006 from $37.8 million a year earlier, said Lilly Icos, the joint venture that manages the drug.

Sales of Cialis, which costs about $12 a pill, beat the most recent Icos sales forecasts of $955 million to $965 million in 2006. The companies expect sales of at least $1.1 billion in 2007. Cialis now has about a 27 percent market share in the U.S., trailing only Pfizer's Viagra among impotence drugs, according to market research firm IMS Health.

"They beat our numbers in the U.S., they beat them in Europe, in Canada, Mexico and the rest of the world," said Chris Raymond, an analyst with Robert W. Baird in Chicago. Raymond had projected $240 million in worldwide fourth-quarter Cialis sales. "It's clear why people think Lilly is getting a good deal," he said.

Raymond was referring to the Indianapolis-based drug maker's offer of $34 a share, or $2.28 billion, to acquire Icos — a deal that would give Eli Lilly full control over Cialis and eliminate the need to split profits with Icos.

Icos shareholders are scheduled to vote on the transaction Jan. 25.

With sales of Cialis rising and its potential additional use to treat enlarged prostate and pulmonary arterial hypertension, one large shareholder has argued Lilly's offer is too low. HealthCor Management, a New York-based hedge fund that holds about 5 percent of Icos shares, has said it opposes the sale because it says the company is worth at least $40 a share.

Cialis' performance handily beat the company's several revised forecasts during 2006. In February, Lilly Icos said it expected full-year profit of $210 million to $240 million. The joint venture then raised its annual profit forecast two more times during the year. On Thursday, Lilly Icos' reported profit beat its final, highest forecast.

"Once again, the guidance that Icos gave on Dec. 14 proved to be overly conservative," said John Schroer, a member of the HealthCor investment team. "It reinforces the HealthCor position that Icos is worth substantially more than the current Lilly proposal of $34 a share."