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Sales of Cialis up, but real test is with rival Viagra

By Luke Timmerman
Seattle Times business reporter

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The numbers that came out yesterday for Cialis — from Bothell-based Icos and its partner, Eli Lilly — showed that the so-called "weekend pill" generated $109 million in sales for the first nine months of the year, from 45 countries where it is approved. The companies expect U.S. approval for Cialis by year's end.

Cialis, whose success is crucial to the future of Icos, tallied $50 million in worldwide sales for the quarter ending Sept. 30 — up from $37 million the previous quarter.

Those figures still look small compared to Pfizer's Viagra. It reported $476 million in worldwide sales for the third quarter, and Pfizer claims 120 million men worldwide have tried it since it was introduced five years ago. Even with competition, Viagra's sales grew 9 percent over the same period a year ago.

Cialis vs. rivals Market share in Germany, August Viagra: 57 percent Cialis: 29 percent Levitra: 14 percent Market share in France, August Viagra: 63 percent Cialis: 28 percent Levitra: 9 percent Source: IMS Health

Icos and Eli Lilly say they will have to spend big money to make money on Cialis. The companies' 50-50 joint venture that handles Cialis lost $34 million in the quarter because of spending on sales and marketing to doctors and continuing clinical studies of the drug's safety and effectiveness.

The losses are expected to widen next year, when the companies plan to saturate U.S. television with consumer-geared ads to establish the Cialis brand name. Icos and Lilly have said they won't use a celebrity to peddle the drug — they'll pitch its ability to remain effective for up to 36 hours instead of Viagra's four hours.

Paul Latta, an analyst with McAdams Wright Ragen, said he expects Cialis to bring in $500 million in sales next year and to keep growing, enough to push Icos into the black in 2006.

Cialis sales will hinge on direct-to-consumer advertising, which isn't allowed in Europe, so the competition will be much different in the United States, Latta said.

Cialis sales, 2003 Q3 — $50.2 million Q2 — $37.4 million Q1 — $21.5 million (first quarter on the market) Source, Company reports

But from the European launch, he said, it's encouraging that Cialis has gained an edge over Levitra and that sales have continued to grow. Latta doesn't own Icos stock, but he says it's his favorite.

"Cialis could be the blockbuster, but it's too early to say," Latta said. "We need a couple more quarters, especially quarters (with it on the market) in the U.S. before we can hand out the blue ribbon."

Icos spokeswoman Lacy Fitzpatrick said the company does not know how much of its market share is attributed to initial pharmacy stocking, and it does not have reliable information on how many patients have tried Cialis and refilled prescriptions.

"We like what we hear from patients and doctors," Fitzpatrick said. "This is just the beginning of Cialis rolling out globally."

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com

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