The erectile dysfunction drug Cialis has generated a profit less than two years after its U.S. launch. Lilly Icos, the joint venture of...

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The erectile dysfunction drug Cialis has generated a profit less than two years after its U.S. launch.

Lilly Icos, the joint venture of Eli Lilly and Bothell biotech company Icos that markets Cialis, posted a third-quarter profit of $19.8 million yesterday on rising sales of the drug and declining marketing and sales costs.

“We reached the stage that we dreamed about: having a blockbuster product come to market and then driving it towards profits,” said Icos Chairman Paul Clark. “It sure does feel good to see that come to fruition.”

Profits were below some analysts’ expectations as overall growth in erectile-dysfunction prescriptions was lackluster.

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Cialis continued to increase its market share, however, with sales of $195.1 million for the three months ended Sept. 30, up 27 percent from the same period a year ago, when the joint venture lost $21.4 million.

Total expenses were down $8 million, or 5.3 percent, for the quarter, and will continue to fall in 2006, Clark said.

“There’s a tremendous expense in getting the rocket off the launching pad when it’s a new product … especially competing against a very formidable, entrenched competitor like Viagra,” he said.

Now, there’s less need for television advertising to reach consumers and detailed discussions to educate prescribing physicians, he said.

Profitability for the joint venture also moves Icos one step closer to the black. Icos splits revenues and expenses with Lilly from Cialis sales in North America and Europe. It receives a 20 percent royalty on sales in the rest of the world.

Icos shares traded as high as $28.34 yesterday morning before finishing at $27.27, a 0.6 percent dip. The company reports its third-quarter results Nov. 3. Analysts are not expecting profits until the first half of next year.

Indianapolis-based Eli Lilly posted a third-quarter profit yesterday of $794.4 million, up 5.2 percent from a year ago, on $3.6 billion in revenue.

Also yesterday, consumer-advocacy group Public Citizen petitioned the government to add a “black-box” warning to the labels of erectile-dysfunction drugs because a small fraction of users have suffered vision loss or blindness.

“That particular group files petitions on a lot of things,” Clark said, adding that the Food and Drug Administration has said it’s impossible to know if the vision problems were related to taking the pills.

In July, the FDA added a lesser warning to the drugs’ labels.

Material from The Associated Press is included in this report.