Erectile-dysfunction drug gives Icos 4th-quarter profit

Investors were pleased to see the first drops of black ink on Icos' books in results reported Tuesday, but a predicted slowdown in sales growth this year contributed to a slide in after-hours trading.

Erectile-dysfunction drug Cialis had global sales of $747 million in 2005, a 35 percent increase over 2004. In December, the drug held a quarter of the U.S. market, up 5 percentage points from a year earlier. And costs for selling and marketing continued to decline.

These factors contributed to a $5.6 million fourth-quarter profit, the first in the Bothell company's 15-year history.

But earnings of 9 cents a share, triple analysts' expectations, didn't distract investors from the company's forecast that Cialis sales in 2006 will reach $860 million to $900 million, a growth rate of 15 to 20 percent.

The drug is sold through a joint venture with Eli Lilly.

Icos shares lost nearly 3 percent or 74 cents in after-hours trading Tuesday to settle at $23.99, according to The Associated Press.

"These guys just turned the corner to profitability, which is great, but I think still at this stage of the company, people are looking for top-line growth," said Christopher Raymond, an analyst with Robert W. Baird & Co., which seeks investment-banking business with Icos.

Stock-option expenses in the range of $29 million to $31 million will contribute to a full-year 2006 net loss of $5 million to $25 million, Icos management said.

Had stock options been expensed in 2005, its net loss would have been $106.1 million.

Icos executives said they expect the market for erectile-dysfunction drugs to begin growing again this year, and they predict Cialis will continue gaining market share.