ICOS

For other organizations called ICOS, see ICOS (disambiguation).

ICOS was a Bothell, Washington-based biotech company that began operations in 1990. Until merging with Eli Lilly in early 2007, many of the initial 65 staff members were still part of the 525-plus people located at the campus north of Seattle. Today there are less than 200 employees company wide.

ICOS and Eli Lilly, a pharmaceutical company based in Indianapolis, formed a 50/50 owned joint venture named Lilly-ICOS to develop and globally commercialize phosphodiesterase type 5 inhibitors (PDE5s) as oral therapeutic agents for the treatment of both male and female sexual dysfunction. The first drug successfully brought to market through this joint venture is Cialis (tadalafil).

In October 2006, Eli Lilly announced that it had reached terms to acquire ICOS for $2.1 billion, or $32 a share. After receiving pressure from large institutional shareholders, as well as Proxy advisory firm ISS, Lilly increased it's offer to $34 per share, a 6% increase. This bolstered offer occurred on the day of the shareholder meeting which was tabled until January 25, 2007. Resistance to the sweetened offer has been voiced again by large shareholders, and ISS has again advised shareholders against accepting the offer, which it deemed as inadequate.

It was announced at a special meeting of shareholders held 25 January 2007 that shareholders approved the revised Agreement and Plan of Merger whereby Eli Lilly and Company would acquire all of the outstanding stock of ICOS for a purchase price of $34 per share in cash.

There was a strong turnout at the meeting, with 77.0 percent of the shares voted cast in support of the merger. The report of the independent inspector of election showed that 84.9 percent of the outstanding shares voted on the merger proposal: 43.1 million shares voted FOR the proposal (65.4 percent of shares outstanding); 12.7 million shares voted against (19.2 percent of the outstanding); 0.2 million shares voted to abstain on the proposal (0.3 percent of the outstanding); and, 9.9 million shares not voted on the merger proposal (15.1 percent of the outstanding). On the record date, there were 65,891,226 shares of ICOS common stock outstanding and entitled to vote at the special meeting.

"We are pleased that this transaction has been approved, as we believe it represents attractive value for ICOS shareholders," said Paul Clark, ICOS chairman, president and chief executive officer. "The value our employees have created is the result of years of innovation and hard work to build a highly skilled organization that has produced a best-in-class product with nearly $1 billion in sales, and achieved profitability in an industry where few companies ever do."

Closing of the transaction occurred on January 29, 2007.

Eli Lilly is currently seeking a suitable third party to purchase the remaining biologics manufacturing and support operations.