LILLY (ELI) & COMPANY: Lilly ICOS LLC Reports 2nd Quarter Results

Date: July 21, 2006

Refer to: [phone] - Terra Fox, Lilly
[phone] - Lacy Fitzpatrick, ICOS

        Lilly ICOS LLC Reports Record Sales and Net Income for Second
                               Quarter of 2006

                  Worldwide Sales of Cialis Top $233 Million 

          Net Income Grows to $75.8 Million for 2006 Second Quarter 

Bothell, WASH. and Indianapolis, IND. - July 21, 2006 - Lilly ICOS LLC (Lilly
ICOS) (NYSE: LLY and Nasdaq: ICOS) is releasing its financial results for the
2006 second quarter, ended June 30. Worldwide sales of Cialis® (tadalafil)[1]
totaled $233.2 million in the second quarter of 2006, an increase of 22%
compared to the second quarter of 2005. Net income was $75.8 million for the
2006 second quarter, compared to a net loss of $1.7 million in the 2005 second
quarter.

Cialis Net Sales:
 
(in millions)
                                       Three Months Ended        Six Months Ended
                                            June 30,                 June 30,
                                      2006           2005      2006           2005
Lilly ICOS Territories:
United States                         $ 93.8         $ 71.1   $ 176.3        $ 113.9
Europe[2]                               71.4           60.9     139.0          117.2
Canada and Mexico                       17.5           13.8      34.6           26.0
Total Lilly ICOS                       182.7          145.8     349.9          257.1
Royalty Territories                     50.5           45.1     106.2           84.0
Worldwide Total                      $ 233.2        $ 190.9   $ 456.1        $ 341.1
 
"Cialis delivered strong worldwide sales in the second quarter, due to both
gains in market share and growth of the ED market," said John Bamforth,
Director, International Marketing, for Lilly. "Cialis has continued to
increase market share across the Lilly ICOS territories every quarter since it
was launched, in 2003. We are especially pleased to note the resumption of
year-over-year growth in the U.S. ED market in the second quarter 2006."

In the U.S., market share of total prescriptions of Cialis reached 26.1% in
June 2006, an increase of 2.8 percentage points from June 2005.[3] Across
Europe, Canada, and Mexico, Cialis captured 34.4% of aggregate market share in
May 2006, an increase of 3.5 percentage points from May 2005.[4] For the 2006
second quarter, the U.S. ED market grew 3.3%, compared to the second quarter
of 2005.[5]

Within the past three months, Lilly ICOS has submitted regulatory filings in
Europe and Canada, seeking approval for Cialis Once-A-Day to treat erectile
dysfunction. Lilly ICOS plans to file a supplemental new drug application, for
once-a-day dosing of Cialis, in the United States later this year.

"We are excited about the potential for Cialis as a once-a-day treatment for
ED," remarked Paul Clark, ICOS Chairman and CEO. "The ED medical experts that
we have consulted with are enthusiastic about the possibility that Cialis
Once-A-Day could provide a welcome alternative for the man with ED who takes a
PDE5 inhibitor more frequently than average. In market research, patients with
ED have expressed interest in the possibility of treating this chronic
condition with a once-daily tablet."

Lilly ICOS is continuing to evaluate tadalafil for potential benefits in
treating other medical indications. Later this year, Lilly ICOS is expected to
begin enrolling patients in a Phase 2b clinical study of tadalafil for the
treatment of benign prostatic hyperplasia (BPH). Results will be available
from the Phase 2 proof-of-concept study of tadalafil in hypertension this
year. And, patient enrollment is continuing in a Phase 3 clinical study of
tadalafil for the treatment of pulmonary arterial hypertension, a life
threatening condition.

Financial Results

Lilly ICOS reported net income of $75.8 million for the three months ended
June 30, 2006, compared to a net loss of $1.7 million for the three months
ended June 30, 2005, reflecting a $42.3 million (22%) increase in worldwide
sales of Cialis and a $35.9 million (28%) reduction in selling, general and
administrative expenses.

Total Lilly ICOS revenue for the second quarter of 2006 was $194.3 million,
compared to $154.9 million for the second quarter of 2005, an increase of 25%.
The increase primarily reflects the impact of market share gains, market
growth and price increases. Royalty revenue in the second quarter of 2006
includes $1.5 million related to a reconciliation of third party sales.

Cost of sales was 7.9% of net product sales in the 2006 second quarter,
compared to 8.2% in the 2005 second quarter. The percentage decrease was
primarily the result of price increases in 2005 and 2006.

The $35.9 million decrease in selling, general and administrative expenses, in
the second quarter of 2006, compared to the second quarter of 2005, was
primarily due to refinements in our U.S. sales force configuration and lower
consumer marketing expenditures in the second quarter of 2006.

Research and development expenses were $13.8 million in the second quarter of
2006, compared to $18.4 million in the second quarter of 2005. The decrease
was primarily the result of completing, in 2005, the BPH Phase 2 clinical
study and once-a-day dosing trials, as well as other regulatory studies,
partially offset by increased costs associated with the ongoing Phase 2
proof-of-concept study in hypertension and Phase 3 clinical study in PAH.

For the six months ended June 30, 2006, Lilly ICOS reported net income of
$140.7 million, compared to a net loss of $43.4 million for the six months
ended June 30, 2005. The improvement was primarily due to the $115.0 million
(34%) increase in worldwide sales of Cialis and an $86.4 million (33%)
reduction of selling, general and administrative expenses.

About Lilly ICOS LLC

Lilly ICOS LLC, a joint venture equally owned by ICOS Corporation and Eli
Lilly and Company, is marketing Cialis in North America and Europe for the
treatment of erectile dysfunction.

ICOS Corporation, a biotechnology company headquartered in Bothell,
Washington, is dedicated to bringing innovative therapeutics to patients. ICOS
is working to develop treatments for serious unmet medical conditions such as
benign prostatic hyperplasia, hypertension, pulmonary arterial hypertension,
cancer and inflammatory diseases.

Eli Lilly and Company, a leading innovation-driven corporation, is developing
a growing portfolio of first-in-class and best-in-class pharmaceutical
products by applying the latest research from its own worldwide laboratories
and from collaborations with eminent scientific organizations. Headquartered
in Indianapolis, Indiana, Lilly provides answers - through medicines and
information - for some of the world's most urgent medical needs. F-LLY

Except for historical information contained herein, this press release
contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
based on current expectations, estimates and projections about the industry,
management beliefs and certain assumptions made by the managements of ICOS and
Lilly. Investors are cautioned that matters subject to forward-looking
statements involve risks and uncertainties, including economic, competitive,
governmental, technological, legal and other factors discussed in the two
companies' respective filings with the Securities and Exchange Commission,
which may affect the business and prospects of the two companies and Lilly
ICOS. Results and the timing and outcome of events may differ materially from
those expressed or implied by the forward-looking statements in this press
release. More specifically, there can be no assurance that Cialis will achieve
sustained commercial success or that competing products will not pre-empt
market opportunities that might exist for the product.

The forward-looking statements contained in this press release represent ICOS'
and Lilly's judgments as of the date of this release. Neither ICOS nor Lilly
undertake any obligation to update any forward-looking statements.

                     --Selected financial data follows--

                                                   Lilly ICOS LLC
                                             SUMMARIZED OPERATING RESULTS
                                                   (in thousands)
                                                    (unaudited)
 
                               2006                                                 2005
                    Q1          Q2         TOTAL          Q1            Q2           Q3          Q4         TOTAL
 
Revenue:
Product sales, 
net:
United States      $82,537      $93,779     $176,316     $42,744       $71,118      $77,438     $81,615    $272,915
Europe              67,586      71,374       138,960      56,264        60,925       61,992      65,311     244,492
Canada and Mexico   17,151      17,508       34,659       12,186        13,839       14,727      18,575      59,327
                   167,274      182,661     349,935      111,194       145,882      154,157     165,501     576,734
Royalties           11,088       11,642      22,730        7,790         9,010        8,172       8,997      33,969
Total revenue      178,362      194,303     372,665      118,984       154,892      162,329     174,498     610,703
Expenses:
Cost of sales       13,382       14,370      27,752        9,752        11,934       12,378      13,200
Selling, general 
 and administrative 86,517       90,342      176,859     137,027       126,232      112,152     84,416      459,827
Research and 
 development        13,502       13,820      27,322       13,874        18,413       18,035      15,494      65,816
Total expenses     113,401      118,532     231,933      160,653       156,579      142,565     113,110     572,907
Net income 
(loss)           $ 64,961     $ 75,771    $140,732     $(41,669)     $ (1,687)    $ 19,764    $ 61,388    $ 37,796
 
                                                            

                                                    Lilly ICOS LLC
                                   Condensed Consolidated Statements of Operations
                                                    (in thousands)
                                                     (unaudited)
 
                                         Three Months Ended                       Six Months Ended
 
                                             June 30,                                June 30,
 
                                      2006            2005                    2006                    2005
Revenue:
  Product sales, net             $ 182,661       $ 145,882               $ 349,935               $ 257,076
  Royalties                         11,642           9,010                  22,730                  16,800
  Total revenue                    194,303         154,892                 372,665                 273,876
 
Expenses:
 Cost of sales                      14,370          11,934                  27,752                  21,686
 Selling, general
 and administrative                 90,342         126,232                 176,859                 263,259
 Research and development           13,820          18,413                  27,322                  32,287
 Total expenses                    118,532         156,579                 231,933                 317,232
 
Net income (loss)                 $ 75,771       $ (1,687)               $ 140,732              $ (43,356)
 
---------------------------------

[1] Cialis® is a registered trademark of Lilly ICOS LLC.

[2] Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland,
Ireland, Italy, Luxembourg, Netherlands, Norway,

Portugal, Spain, Sweden, Switzerland and the United Kingdom.

[3] IMS Health, IMS National Prescription Audit Plus™, (based on total
prescriptions), June 2006 and 2005.

[4] Based on PDE5 inhibitor tablets from wholesalers to pharmacies, IMS Heath,
IMS MIDAS May 2006 and 2005.

[5] Based on calculations using IMS National Prescription Audit Plus™, (PDE5
prescriptions dispensed at pharmacies) June 2006 and 2005.




END