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U.S.
Securities and Exchange Commission
Washington,
DC 20549
Notice
of Exempt Solicitation
1.
Name
of the Registrant:
ICOS
Corporation
2.
Name
of persons relying on exemption:
(i)
HealthCor Management, L.P., a Delaware limited partnership; (ii) HealthCor
Associates, LLC, a Delaware limited liability company; (iii) Joseph Healey;
and
(iv) Arthur Cohen (collectively, the “HealthCor
Group”).
3.
Address of persons relying on exemption:
(i)
HealthCor Management, L.P.
Carnegie
Hall Tower
152
West
57th Street, 47th Floor
New
York,
New York 10019
(ii)
HealthCor Associates, LLC
Carnegie
Hall Tower
152
West
57th Street, 47th Floor
New
York,
New York 10019
(iii)
Joseph Healey
Carnegie
Hall Tower
152
West
57th Street, 47th Floor
New
York,
New York 10019
(iv)
Arthur Cohen
12
South
Main Street, #203
Norwalk,
CT 06854
4.
Written materials. Attach written material required to be submitted pursuant
to
Rule
14a-6(g)(1).
On
October 17, 2006, ICOS Corporation (the “Company”)
announced that it had entered into a merger agreement whereby it would be
acquired by Eli Lilly and Company (“Eli
Lilly”)
and on
November 1, 2006, the Company filed a preliminary proxy statement with the
Securities and Exchange Commission (the “SEC”)
whereby the Company’s management recommended that the Company’s shareholders
vote to approve the merger with a consideration of $32 per share of common
stock
of the Company. After reviewing the terms of the merger and the financial
condition of the Company, the HealthCor Group determined that it intends to
not
vote in support of the merger as it does not believe the consideration offered
adequately compensates the Company’s shareholders for their interest in the
Company.
In
response to an unsolicited request from Institutional Shareholder
Services (“ISS”)
for
information regarding our intention to vote against the proposed acquisition
of
ICOS by Eli Lilly, we met with ISS on November 28, 2006 and explained our
position regarding the proposed merger and provided ISS with a package of
supporting written materials (the “ISS
Presentation Material”).
On
November 30, 2006 the Company filed under cover of Schedule 14A shareholder
presentation material designed to provide a rationale for the valuation being
offered to its shareholders. After reviewing the presentation material we
determined that: it did not address many of the serious concerns we have raised;
it relies in part on an undisclosed analysis; aspects of the material, in our
view, actually support some of our positions; under the compensation arrangement
entered into between the Company and Merrill Lynch, Pierce, Fenner & Smith
(“Merrill”),
the
Company’s financial advisor for the proposed merger, Merrill is not incentivized
to maximize shareholder value; and under compensation arrangements entered
into
the day before the proposed merger was announced between the Company and its
management, management has a meaningful financial incentive to close the
transaction on a basis unfavorable to the Company’s shareholders. On December 4,
2006 the HealthCor Group delivered a letter to the Company's Board of Directors
setting forth its positions (the "December
4th
Letter").
A
copy of
the December 4th
Letter
and the ISS Presentation Material are attached hereto as Exhibits 1 and 2,
respectively.
A
copy of
the December 4th
Letter
and the ISS Presentation Material were also included as Exhibits to a Schedule
13D/A (Amendment no. 2) filed by the HealthCor Group with the SEC on December
4,
2006.
Exhibit
Index
| Exhibit
1. |
Letter
sent by HealthCor Management, L.P. to the Board of Directors of ICOS
Corporation dated December 4, 2006.
|
| Exhibit
2. |
Presentation
material prepared for HealthCor Management, L.P.’s meeting with
Institutional Shareholder Services on November 28,
2006.
|