`
`4 of 4 DOCUMENTS
`
`Copyright 1998 PR Newswire Association, Inc.
`PR Newswire
`
`October 1, 1998, Thursday
`
`SECTION: Financial News
`
`DISTRIBUTION: TO BUSINESS AND MEDICAL EDITORS
`
`LENGTH: 734 words
`
`HEADLINE: Lilly and ICOS Establish a Joint Venture to Develop and Market PDE5 Compounds to Treat Sexual
`Dysfunction.
`
`DATELINE: INDIANAPOLIS, Oct. 1
`
`BODY:
` Eli Lilly and Company (NYSE: LLY) and ICOS Corporation (Nasdaq: ICOS) announced today that they have en-
`tered into an agreement to form a 50/50 owned joint venture to jointly develop and globally commercialize pho-
`phodiesterase type 5 inhibitors (PDE5) as oral therapeutic agents for the treatment of both male and female sexual dys-
`function.
`The lead compound in the joint venture, IC351, is currently being evaluated in Phase II clinical trials as an oral
`treatment for erectile dysfunction. A recently completed European Phase II clinical trial designed to assess safety and
`efficacy in male erectile dysfunction (erectile response), showed significant improvement relative to placebo-treated
`patients. Phase I studies have demonstrated that IC351 is safe and well tolerated.
`Erectile dysfunction, in some form, affects as many as 30 million men globally. Many older therapies are either
`inconvenient to administer or may lead to troublesome side effects. In addition, female sexual dysfunction represents
`a large unmet medical need where there are very few treatments.
`Under the terms of the agreement, ICOS and Lilly will establish a 50/50 owned joint venture. ICOS will receive a
`$75 million up-front payment and success milestone payments based on the progression of IC351 through development.
`ICOS and Lilly will both capitalize the joint venture through a cash infusion by Lilly over a three year period and the
`contribution by ICOS of intellectual property associated with IC351 and its research platform. Subsequently, both par-
`ties will equally provide for the future capital requirements of the company. The joint venture will market products
`resulting from this collaborative effort in North America and Europe. For countries outside North America and Eu-
`rope, products will be licensed exclusively to Lilly for commercialization with a royalty paid to the joint venture.
`"The combined strength of both organizations allows us to enhance our commercialization efforts and accelerate
`the pace of this program," commented ICOS Chairman and Chief Executive Officer George Rathmann. "Our joint
`venture with Lilly represents ICOS' largest collaborative effort to date. We believe Lilly possesses a strong collection
`of capabilities that will help drive the collaboration's success."
`"The creation of this joint venture will give us an opportunity to work with an ICOS research and management
`team that is well respected and very talented," said August M. Watanabe, M.D., Lilly executive vice president, science
`and technology. "Our partnership with ICOS represents an aggressive step for Lilly as we continue to evaluate leading
`and innovative technologies that can supplement our own research and development programs."
`
` DRL - EXHIBIT 1020
`
`
`
`Page 2
`Lilly and ICOS Establish a Joint Venture to Develop and MarketPDE5 Compounds to Treat Sexual Dysfunction. PR
`Newswire October 1, 1998, Thursday
`
`In addition, Lilly announced that the combined impact of the up-front payment to ICOS plus certain other payments
`made to the joint venture will be reflected as a one-time after-tax charge of approximately 7 cents per share to earnings
`in the third quarter.
`ICOS is discovering and developing new pharmaceuticals by seeking points of intervention in disease processes
`that may lead to more specific and efficacious drugs. The company's research and drug development programs involve
`both acute and chronic conditions.
`Lilly is a global research-based pharmaceutical corporation headquartered in Indianapolis, Ind., that is dedicated to
`creating and delivering innovative pharmaceutical-based health care solutions that enable people to live longer, healthier
`and more active lives.
`Additional information about Eli Lilly and Company and ICOS Corporation is available on the World Wide Web at
`http://www.lilly.com or http://www.icos.com.
`This release may contain forward-looking statements that reflect management's current views of future events and
`operations. The information is based on management's current expectations but actual results may differ materially
`due to various factors, including those mentioned in this release, risks and uncertainties, including market conditions,
`competitive pricing, the successful outcome of clinical trials, the timely receipt of regulatory approvals and those out-
`lined in Lilly and ICOS filings with the SEC.
`SOURCE Eli Lilly and Company
` CONTACT: James P. Kappel of Eli Lilly, 317-276-5795; or Lacy Fitzpatrick of ICOS, 425-485-1900
`
`LOAD-DATE: October 2, 1998
`
`
`