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Eli Lilly to Acquire Cialis Partner Icos

October 18, 2006|From Bloomberg News

Eli Lilly & Co. said Tuesday that it would buy its partner Icos Corp. for $2.1 billion, acquiring full marketing rights to Cialis, the world's second-biggest-selling impotence drug after Viagra.

Lilly agreed to pay $32 a share, 18% more than Monday's closing price, for Bothell, Wash.-based Icos. The companies have been partners since 1998 on Cialis. The drug's sales rose 34% to $456 million in the first half of this year while those of Pfizer Inc.'s Viagra fell 5.4% to $784 million.

Acquisition of the biotechnology company will give Indianapolis-based Lilly a sales boost almost immediately as it faces a dry spell of new-product approvals. Lilly had a setback when U.S. regulators said last month that they wouldn't approve the vision-loss medication Arxxant without new studies.

Cialis has patent protection until 2017 and may win approval for more uses.

"It makes sense," Barbara Ryan, an analyst with Deutsche Bank Securities in Greenwich, Conn., said about the deal. "This allows them to maximize the economics of their collaboration while eliminating all the redundancies of the joint venture."

Shares of Lilly fell 11 cents to $57.55 while those of Icos rose $4.38, or 16%, to $31.50. Icos shares had lost 1.6% in the 12 months through Monday.

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