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Biotech / Medical : ICOS Corporation -- Ignore unavailable to you. Want to Upgrade?

To: SemiBull who wrote (999)	8/6/2003 8:18:03 PM
From: SemiBull	Read Replies (1) \| Respond to of 1139

Icos Shares Slip After Firm Forecasts Expanded Loss Wednesday August 6, 11:45 am ET By Hollister H. Hovey NEW YORK -- Shares of Icos Corp. (NasdaqNM:ICOS - News) fell Wednesday after the company said that the cost of marketing its impotence drug Cialis in the U.S. will push the biotechnology company to a wider-than-expected loss in 2004 and that profitability won't come for two to three years. Icos also reported second-quarter European sales figures of the drug, which weren't as good as some were expecting. Cialis is already available in many countries outside the U.S., where it is currently awaiting Food and Drug Administration (News - Websites) approval. On a conference call Tuesday night, the company offered better 2003 guidance, now calling for a loss of $131 million to $141 million, or $2.10 to $2.25 a share, this year. The company previously expected to lose $159 million to $169 million, or $2.54 to $2.70 a share. The improved guidance stems mainly from a $ 21 million payment the company received from Biogen Inc. (NasdaqNM:BGEN - News) . However, costs are expected to soar in 2004 with the company and its Cialis marketing partner Eli Lilly & Co. footing the bill for a massive U.S. direct-to-consumer advertising campaign and a big Cialis sales push to American physicians. It will compete with Pfizer Inc.'s Viagra and the drug Levitra, recently launched by GlaxoSmithKline PLC (GSK) and Bayer AG (BAY). Icos expects U.S. approval for the drug by the end of the year. "Because Icos and Lilly will spend aggressively to promote Cialis against Viagra and Levitra, Icos does not expect the product to be profitable for 18 to 24 months following its launch," S.G. Cowen analyst Phil Nadeau wrote in a Wednesday note. Icos is expecting that its 2004 net loss will exceed the loss from 2003. Excluding one-time items during the year, Icos expects its loss in 2004 to be no less than $3 a share, Mr. Nadeau said. Analysts polled by Thomson First Call (News - Websites) were looking for a loss of $1.23 a share. "Based on the expenses associated with launching Cialis, Icos also said that it does not expect to become profitable for another two to three years," he said. "We believe that these comments will be somewhat disappointing to Wall Street." Mr. Nadeau doesn't own Icos shares, but his firm has had an investment-banking relationship with Icos. At about 11:30 EDT, shares of Icos were down $6.42, or 16%, to $33.07 on the Nasdaq Stock Market (News - Websites). Shares traded as low as $31.92 earlier in the session. Merrill Lynch & Co.'s (MER) Eric Ende now expects the Lilly-Icos joint venture to lose $70 million in 2004. He had been forecasting a $12 million loss for the joint venture next year. He widened his 2004 loss expectation for Icos to $3.07 a share from $1.82 due to the higher expenses. Mr. Ende isn't a shareholder, but Merrill acts as a market marker for Icos stock and the firm expects to seek or receive compensation for investment- banking activities from Icos in the next three months. Analysts' interpretations of Cialis' performance in Europe in the second quarter varied. "While world-wide Cialis revenue of $37.4 million beat our pre-earnings estimate of $36.6 million, we highlight that [European Union (News - Websites)] revenue of $22 million came up far short of our $35 million estimate," R.W. Baird analyst Christopher Raymond wrote in a Wednesday note, commenting on the second quarter. But he admits that his expectations may have been too high. Mr. Raymond isn't a shareholder, but his firm has had an investment-banking relationship with the company. Mr. Ende expected Cialis' European revenue to be $20.4 million. "Although the market penetration of Cialis in (Europe) seems impressive, there are questions as to what proportion relates to stocking, pent-up demand and internet sales," Mr. Ende wrote Wednesday. Earlier, Icos reported a narrower second-quarter loss on higher revenue and lower operating expenses. The drug company said its second-quarter loss was $ 11.5 million, or 19 cents a share, compared with a loss of $40.4 million, or 66 cents a share. The latest results included a one-time gain of $10 million from the sale of partnership interests. Revenue rose nearly 22% to $26.7 million from $22 million a year ago. Operating expenses were $30.6 million in the quarter, down from $40.1 million last year. Lilly Icos LLC (NYSE:LLY - News), a joint venture between Icos and Eli Lilly, reported a second- quarter loss of $40.1 million, compared to a loss of $34 million a year ago. Total revenue was $25 million, consisting of $21.9 million of product sales of Cialis in Europe. Cialis was launched in Europe in the first quarter. - Hollister H. Hovey, Dow Jones Newswires; 201-938-5287