BOTHELL — Excitement over ICOS Corp.’s launch of its erectile dysfunction drug dominated the company’s earnings announcement Tuesday, but the biotechnology firm also revealed it has halted development of another drug candidate.
RTX, which was designed to treat a chronic and often painful bladder condition called interstitial cystitis, showed poor results during a phase 2 clinical study.
"Although the safety profile was good, RTX was not effective in relieving the patients’ symptoms," said David Goodkin, ICOS’ chief medical officer and vice president of development.
For that reason, the Bothell-based firm decided latein January to give up on the drug.
With that news and forecasts of a larger-than-expected loss for 2004, ICOS’ stock dropped $1.76 to $41.24 a share in after-hours trading.
Despite the bad news, ICOS ended 2003 on a high note, said Paul Clark, chief executive officer. After Cialis received federal approval in November, the erectile dysfunction drug recorded strong initial sales in the United States.
For 2004, ICOS expects Cialis to rack up sales of $500 million to $600 million worldwide. As of Dec. 31, 55 countries had approved the prescription drug.
"We believe Cialis has great potential, and we expect that within 18 months it will become profitable, and from there move along its way to become a very significant profit generator," Clark said.
To help sales reach that level, however, ICOS and its partner, Eli Lilly &Co., will spend aggressively on advertising and other marketing. The U.S. ad campaign kicked off with a commercial broadcast during the Super Bowl.
As a result, ICOS expects to lose $235 million to $275 million this year, exceeding earlier forecasts.
During 2003, ICOS lost $125.5 million, or $2.01 a share, compared with $162 million in 2002. In the fourth quarter of 2003, the company’s loss was $34 million, down from more than $47 million in the final period of 2002.
Aside from the company’s finances, the abandonment of the RTX program puts ICOS’ roster of drugs under research at a low ebb. Last summer, the company said an experimental treatment for psoriasis, one of its most advanced drug candidates, was ineffective.
In December 2002, ICOS stopped development of Pafase, which was aimed at treating sepsis, a severe and sometimes fatal blood infection. In that case, too, a clinical trial showed it was ineffective. Work on another potential sepsis drug, IC14, also was terminated.
Before that, ICOS and Texas Biotechnology Corp. stopped a long-term safety trial for sitaxsentan, an experimental drug to treat pulmonary arterial hypertension. While the drug showed some promise, some patients reported liver abnormalities. Texas Biotechnology later bought all the rights to the drug. Another drug developed with Texas Biotechnology also didn’t pan out.
The apparent failure of RTX will disappoint patients suffering from interstitial cystitis, as there are few approved drugs to treat the condition. It shouldn’t, however, have a huge effect on ICOS’ bottom line, said Paul Latta, an analyst with McAdams Wright Ragen Inc. in Seattle.
"But it does kind of frighten one, because it’s the fourth or fifth or sixth one to fall," Latta added.
Goodkin said the company has invested in early-stage drug candidates for a range of diseases and recently began a phase 2 study on a treatment for a form of lung disease. ICOS also may acquire drug candidates from other firms in the year ahead.
"We are very aware that our clinical pipeline has contracted," Goodkin said. "Expanding it with quality candidates is a top priority for 2004."
With about 700 employees and a market capitalization of $2.7 billion, ICOS is the largest public company based in Snohomish County.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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