Lilly/Icos says sales of Cialis jumped 28 percent
Sales of Cialis increased to a record $269.2 million in the fourth quarter, a 28 percent growth from a year earlier.
With reference to a statement Thursday from drug makers Eli Lilly & Co. and Bothell-based Icos, who co-market Cialis, the world’s No.2 impotence drug had $971 million in worldwide sales in 2006, compared to $746 million in 2005.
As stated by Lilly Icos, the joint venture that manages the drug, higher sales together with lower spending on advertising brought $320.3 million in 2006. To compare, the year earlier estimated profit was $37.8 million.
However, the companies expect even greater sales of at least $1.1 billion in 2007.
As indicated by market research firm IMS Health, Cialis now has about a 27 percent market share in the U.S., and is only behind Pfizer’s Viagra.
“They beat our numbers in the U.S., they beat them in Europe, in Canada, Mexico and the rest of the world,” stated Chris Rymond, 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 on the basis of which Eli Lilly would gain full control over Cialis. Moreover, the transaction would eliminate the need to split profits with Icos.
Icos shareholders are planned to vote on the deal Jan.25.
Taking into account both, the growth in Cialis sales as well as its potential additional use to treat enlarged prostate and pulmonary arterial hypertension, the Lilly’s offer is too low according to one large shareholder. 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 easily beats the company’s several revised forecasts during 2006. According to February forecast, Cialis was expected to bring a full-year profit of $210 million to $240 million. The joint venture raised its annual profit forecast two more times during the year. On Thursday, Lilly Icos’reported profit beat its final, highest forecast.
As stated by John Schroer, a member of the HealthCor investment team, “Once again, the guidance that Icos gave on Dec. 14 proved to be overly conservative. It reinforces the HealthCor position that Icos is worth substancially more than the current Lilly proposal of $34 a share.”