BOTHELL – ICOS Corp. quietly started an early-stage test of an experimental drug last week, even as the company waits to see if shareholders will approve its $2.1 billion acquisition by Eli Lilly &Co.
The Bothell biotechnology firm’s decision not to disclose the new drug trial, until it was reported in the media Thursday, has raised more questions among critics of Lilly’s buyout of the company.
An ICOS spokeswoman said the company didn’t deliberately try to hide the good news.
“We would generally have updated people in a conference call or a quarterly press release, and that could happen in the future,” said Lacy Fitzpatrick. “But it isn’t our practice to announce beginning a small study at this stage in the company’s development.”
Once Lilly’s bid for ICOS was announced in mid-October, ICOS stopped holding conference calls. The company opted not to brief investors with a call after third-quarter results were released that month, for example.
And in the past, ICOS announced the start of phase 1 tests to investors and the press. After the company’s erectile dysfunction drug, Cialis, won regulatory approval in 2003, however, such announcements were considered relatively minor, Fitzpatrick explained.
Paul Latta, an analyst who tracks ICOS for McAdams Wright Ragen Inc., said news of the new drug test caught him by surprise. Among the reasons he’s given as to why it makes sense for ICOS to be sold has been the company’s lack of new drugs in development.
So any new candidate produced by the company is news, even if the chance of it ultimately succeeding is slim, he said.
“It sounds like something that should have been disclosed in a press release to me, even if it’s a small thing,” Latta said.
“It’s not a huge event, but psychologically it’s important, considering ICOS’ pipeline situation,” he added.
Fitzpatrick confirmed that the new drug candidate, IC776, is a potential treatment for psoriasis, an inflammatory skin condition. She did not have details about the size or timeline of the clinical trial.
ICOS previously worked on a psoriasis drug, IC747, which was abandoned three years ago in mid-stage testing after results suggested the drug was ineffective.
In recent weeks, opposition to the buyout of ICOS, to be decided Dec. 19 by shareholders, has mounted. One major institutional shareholder has committed to voting no. An influential proxy analysis firm has recommended a no vote, and individual investors have asked state and federal regulators to scrutinize the deal. Most argue the Lilly, ICOS’ longtime partner in making and marketing Cialis, isn’t offering enough for the company.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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