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Shares of



dropped sharply Wednesday, a delayed response to the company's second-quarter earnings report issued Tuesday after market had closed.

The stock lost 15.8%, or $6.25, to close at $33.24. The stock had dropped as low as $31.92 for the Bothell, Wash.-based company, which is betting on a new impotence treatment, Cialis, to propel its sales.

The drug was launched in the European Union during the first quarter. Icos and its joint venture partner

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are still awaiting approval from U.S. regulators. The companies expect U.S. approval by the end of this year.

Icos's shares dropped apparently due to investors' concerns that the costs of making and marketing Cialis will cause a greater-than-expected loss for the company in 2004.

Icos reported that its 50% share of the joint venture rose to $20 million for the second quarter compared with $17 million for the same period last year. Expenses for the three months ended June 30 nearly doubled -- to $65.1 million from $34 million -- compared with the same period last year.

For the second quarter, total Icos sales rose to $26.7 million from $22 million for the same period last year. The company's loss shrank to $11.5 million, or 19 cents a share, from $40.4 million, or 66 cents a share.