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Excerpted from ICOS Securities and Exchange Commission 10K Filing

ICOS SEC Filing 10K405

March 29, 2001


We are evaluating Cialis, a small molecule compound that inhibits the phosphodiesterase type 5 enzyme, or PDE5, for the treatment of erectile dysfunction and female sexual dysfunction. In 1998, we formed a joint venture entity with Eli Lilly called Lilly ICOS LLC to develop and commercialize Cialis.

Erectile Dysfunction Clinical Application

Erectile dysfunction is a condition in which a man is unable to attain or maintain an erection sufficient for sexual intercourse. Erectile dysfunction affects an estimated 70 million men in North America and Europe, and it is increasingly recognized as a serious and treatable medical condition. Erectile dysfunction is often associated with underlying diseases such as diabetes, cardiovascular disease and depression, or may be a consequence of prostate surgery, spinal cord injury or treatment with certain medications. In the typical erection process, tactile and visual stimuli lead to increased blood flow into penile tissue, resulting in an erection. As part of this process, a chemical called cyclic GMP causes penile blood vessels to dilate, allowing blood flow to increase. PDE5, an enzyme present in penile blood vessels, removes cyclic GMP from penile tissue, thereby allowing the penile blood vessels to return to their undilated state. Inhibition of PDE5 can enhance blood flow to the penis, contributing to an erection.

Current Treatment. Until 1998, treatments for erectile dysfunction were primarily limited to the use of injectibles, vacuum pumps and prostheses, which are inconvenient and unpleasant options that have restricted the size of the treated population. With the introduction in 1998 of Viagra(R), the first effective oral treatment for erectile dysfunction, millions of men were motivated for the first time to acknowledge their affliction and seek treatment. We believe that many men have ceased therapies for erectile dysfunction due to ineffectiveness, unpleasant side effects or inconvenient administration. We believe that as few as 10% of the men who could benefit from orally administered treatment for erectile dysfunction are currently undergoing treatment.

Potential Treatment by Cialis(TM). Cialis is a small molecule compound that inhibits PDE5, increasing cyclic GMP levels and consequently increasing blood flow to the penis. We believe Cialis is a more promising therapy for erectile dysfunction than current therapies because it has been shown in in vitro studies to narrowly target PDE5, and therefore may produce a lower risk of certain side effects associated with currently available therapies. Cialis may encourage use among the untreated population of erectile dysfunction patients in addition to those currently using therapies for erectile dysfunction.

Development Status. To date, we have initiated over 50 Phase 1, 2 and 3 clinical trials evaluating Cialis for the treatment of erectile dysfunction. For example, Cialis has been evaluated in three Phase 2 clinical trials conducted in an outpatient setting. These trials were multicenter, randomized and placebo-controlled. One of these trials assessed daily Cialis administration at doses of 10 mg to 100 mg. In the other two trials, patients used Cialis as needed at doses of 2 mg to 25 mg. In each of these studies, questionnaires, patient diaries and partner diaries reported erectile function in both pre-treatment periods and periods during which the patient was on treatment. In all three studies, Cialis improved the patients' ability to attain and maintain an erection sufficient for sexual intercourse and increased both the percentage of successful sexual attempts reported by patients in patient diaries as well as the proportion of experiences satisfying to both patients and partners. The most frequently reported treatment-related side effects in these studies were headache, back pain, muscle ache and heartburn-like symptoms. Most of these side effects were mild to moderate in intensity and decreased with continued treatment.

We are currently conducting a Phase 3 clinical program for Cialis. We plan to submit a New Drug Application for Cialis to the FDA in the second half of 2001, subject to the successful conclusion of our clinical trials.

Female Sexual Dysfunction Clinical Application

Female sexual dysfunction is a general term that describes a variety of conditions, including lack of sexual desire, lack of sexual arousal, inability to achieve orgasm and pain during intercourse. Female sexual dysfunction has been reported to affect greater than 40% of adult women in the United States. Research in female sexual dysfunction is considerably less advanced than that of erectile dysfunction. In addition, the factors that underlie female sexual dysfunction are not well understood. At present, treatment for female sexual dysfunction is primarily limited to counseling, hormonal treatment and vaginal lubricants. These products may reduce discomfort, but do not directly address desire, arousal and orgasmic disorders.

We are evaluating Cialis for the treatment of some forms of female sexual dysfunction. Women were included in Phase 1 clinical trials of Cialis, and a Phase 2 clinical program is being conducted to further explore the safety and efficacy of Cialis in women suffering from female sexual dysfunction.

 

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