ICOS: Beyond Cialis

03/10/2006 12:00 am EST

Focus:

John McCamant

Editor, Medical Technology Stock Letter

Most biotech investors know ICOS for its well-publicized Cialis. But biotechnology expert John McCamant believes the ED treatment could have additional uses in other medical areas. Here, he looks at the drug’s potential as well as the stock’s long-term outlook.

"Most biotech investors are certainly well aware of the erectile dysfunction (ED) treatment arena, and the significant inroads made by ICOS (ICOS NASDAQ), which makes Cialis. Perhaps what is less apparent, however, is that, due to the mechanism of action of tadalafil—the active ingredient in Cialis—it has large potential utility in other areas outside of ED treatment. One area, in particular, in which we believe tadalafil has significant potential, is treating BPH-related symptoms. BHP, or benign prostatic hyperplasia, is the term used to describe noncancerous enlargement of the prostate gland. 

"Alpha-blockers have been used for a long time to treat high blood pressure. However, because of their mechanism of action, which includes relaxing smooth muscle tissue, they are also used to treat the symptoms associated with BPH. However, there are side effects associated with their usage, including sexual dysfunction. There is a clear need for a drug that can produce at least comparable effectiveness in alleviating BPH-related symptoms, and at the same time, avoid producing the unwanted sexual dysfunction side effects that many of these patients are already dealing with. 

"Taking it a step further, having access to a drug that can effectively reduce BPH symptoms and also not just avoid sexual dysfunction side effects, but improve an underlying sexual dysfunction disorder, could be a major win for the BPH patient. Over 50% of men with BPH also have ED. The BPH patient is already dealing with a highly sensitive condition and having to endure further embarrassment via sexual dysfunction in order to deter BPH symptoms is not a suitable solution. 

"Enter ICOS. The BPH indication is a near perfect fit because many doctors that are treating patients for ED, are also treating BPH patients. Since the sales force is already selling the drug to doctors treating ED patients, they'd be one step ahead in the market. And because tadalafil is an already approved drug for ED, there is already a massive amount of safety data that has been accrued. At the end of the day, we believe that tadalafil will become a major player in the treatment of BPH symptoms, increasing this future blockbuster drug’s sales even further in the process. 

"ICOS has come under criticism for the company’s lack of a follow-on pipeline behind Cialis. And, to be certain, they have had their share of failures. However, we believe one could make the argument that tadalafil in and of itself could be viewed as a legitimate pipeline within just one drug. ICOS is exploring its potential usage in other disease areas as well, including pulmonary arterial hypertension, and the much broader indication hypertension. ICOS has been a frustrating investment in recent times, but if future clinical development of tadalafil goes the way we think it will, then we believe your patience will be rewarded, based on this drug alone."

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