ICOS Corp. is looking to raise $250 million through an offering of convertible subordinated notes.

The Bothell, Wash.-based company said it would use net proceeds for the anticipated U.S. commercial launch of Cialis, its erectile dysfunction product developed in partnership with Eli Lilly and Co., as well as for research and development activities, working capital and other general corporate purposes.

ICOS has said it expects an FDA decision on Cialis (tadalafil), an oral PDE5 inhibitor, late in the second half of the year. It plans to launch the product shortly thereafter. (See BioWorld Today, May 29, 2003.)

Though already approved in the European Union and about 15 other countries, U.S. regulatory action has been under way for some time. Two years ago, Lilly ICOS LLC, a joint partnership formed by ICOS and Indianapolis-based Lilly to commercialize Cialis, submitted a new drug application. In April 2002, the FDA issued an approvable letter indicating that approval was conditional on completing additional pharmacology studies, on labeling discussions and on manufacturing inspections. (See BioWorld Today, June 29, 2001, and May 1, 2002.)

Recent research published in the June 2003 issue of Urology showed that 61 percent of men taking Cialis reported a successful intercourse attempt at 24 hours compared to 37 percent from the placebo group (p<0.001).

Earlier this month, the companies extended their relationship beyond Cialis when ICOS entered a biologics manufacturing agreement related to two clinical candidates being developed by Lilly.

ICOS, which reported a net loss of $40.5 million for the three-month period ended March 31, now appears confident to put its business into a financial position to support Cialis' launch. The company reported cash, cash equivalents, investment securities and associated interest receivable of $307.6 million through the same date.

The notes are expected to carry a 20-year term and will be convertible, at the holder's option, into ICOS common stock at an as-yet-undetermined price as negotiations continue. ICOS said the terms likely would include an option exercisable by the initial purchasers to purchase up to an additional $50 million aggregate principal amount of notes.

Beyond Cialis, ICOS' clinical pipeline includes IC747, a Phase IIa product being developed with Cambridge, Mass.-based Biogen Inc. for moderate to severe psoriasis. RTX is in a Phase II trial in interstitial cystitis, IC14 is being studied in a Phase II sepsis trial, tadalafil remains in a Phase II diabetic gastroparesis trial and IC485 is in a Phase I trial in chronic obstructive pulmonary disease. The company stopped a Phase III trial of Pafase for the treatment of severe sepsis late last year. (See BioWorld Today, Dec. 20, 2002.)

Company officials were unavailable for comment. Its stock (NASDAQ:ICOS) lost 19 cents Monday to close at $42.93.