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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (6424)	12/3/1998 8:31:00 PM
From: Anthony Wong	Respond to of 9523

ICOS Guns for Viagra with Help from Bill Gates: Bloomberg Forum Bloomberg News December 3, 1998, 4:06 p.m. ET ICOS Guns for Viagra with Help from Bill Gates: Bloomberg Forum Bothell, Washington, Dec. 3 (Bloomberg) - Say this for biotechnology upstart Icos Corp.: it thinks big. The Bothell, Washington, company is developing an anti- impotence drug called IC351 and intends for it someday to rival Pfizer Inc.'s blockbuster Viagra. Icos recruited Eli Lilly & Co., the 10th largest U.S. drug maker, as a partner in the venture. Further, Icos is the only biotech wanna-be which can boast as a board member Microsoft Corp. Chairman Bill Gates, America's wealthiest person. Even with its lofty ambitions, Icos may have a hard time denting the lead of Viagra, which had drug industry-record sales of $411 million in its first three months this year. Icos reckons it will take two years to get government clearance for IC351. Then, the company has the challenge of convincing the public that it needs an alternative to Viagra. ''I am not sure whether the world needs it,'' conceded Icos Chairman George Rathmann, 70, at the Bloomberg Forum. In only a few months on the market, Viagra became a sensation and helped drive Pfizer's stock to an all-time high of 121 last April 21. Stories about Viagra have landed on the front pages of newspapers and covers of magazines all year. Its place in pop culture annals was assured when ''Saturday Night Live'' featured it in comedy skits. No Panic Rathmann has no assurances that IC351 can have that kind of impact on Icos. Nevertheless, he won't panic. Lilly said in October it will pump in $75 million at the outset of their relationship and more money later. Icos and Lilly also plan to develop medications for women who have sexual dysfunction. When it comes time to market IC351, Rathmann can count on unleashing a high-powered board. Forbes said Gates, the wealthiest American, has an estimated worth of $58 billion. The board also consists of former chief executives, Citicorp's Walter Wriston, International Business Machines Corp.'s Frank Cary and James Ferguson of General Foods Corp. Gates is a ''fabulous'' colleague, Rathmann said. ''He does everything right. He's got enthusiasm, he's got a critical mind and he's very supportive.'' Fewer Side Effects Icos intends to make a drug which could work as well as Viagra but cause fewer side effects. Last month, the U.S. Food and Drug Administration said Viagra will carry new warnings to ensure its safe use. The warnings follow reports of heart attacks, sudden cardiac death and high blood pressure in men who have taken the drug. The new warning will warn men who have a history of heart problems to be careful about resuming normal sexual activity. Both drugs target the same enzymes involved in causing impotence. These enzymes are also found in other parts of the body, such as the eyes. By hitting these enzymes the wrong way, Pfizer's drug has produced side effects. Icos has designed its pill to hone in on the enzymes involved in causing impotence. Icos has designed a molecule which ''doesn't interact with other sites in the body and therefore it has a specific function of solving the problems of erectile dysfunction,'' Rathmann said. Marketing Challenge Rathmann concedes that marketing IC351 will eventually shape up as a challenge. ''Of course, with Viagra such a wonderful name, we've been kind of reluctant to pick a name,'' he said. ''We figure it's going to be hard to have a better-sounding name than that one.'' Don't let Rathmann fool you. Behind his folksy manner, he knows how to market his company with investors. Rathmann helped found Amgen Inc., the world's largest biotechnology company. So far, he has won over Wall Street. Icos' shares are up 53 percent in the past 12 months, more than twice the 21 percent return of the benchmark Standard & Poor's 500 Index of stocks. Rathmann's biggest coup to date was wooing Gates. Rathmann called Gates after hearing from mutual friends that the Microsoft leader might want to invest in a biotechnology company. They had dinner together and Gates was intrigued by Icos' prospects. It turned out that Rathmann did such a good job at talking up his company that Gates invested $5 million of the initial $33 million in Icos and today he owns 13 percent of the company. Icos doesn't have any products on market. Instead, it offers investors the prospect of turning its research into new drugs. So far, its work has crossed a hurdle some biotechnology companies have not, winning U.S. Food and Drug Administration approval to test experimental medicines in people. In addition to the impotence drug, Icos also has two other drugs in advanced development, including one for stroke. These three products are in the second of three stages of required testing to apply for U.S. approval. Another is in early human testing. --Jon Friedman (212) 318-2337 with reporting by Kerry Dooley