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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AXQHZcgjullZHnHZD1MqdCx41ZWzhjci0kzGG7RQ3iGdm/+4WfoJtmtIa6bHzbp/ 0u0KbdTYQ1nf2xAfGmvr1g== 0001144204-07-000953.txt : 20070108 0001144204-07-000953.hdr.sgml : 20070108 20070108170342 ACCESSION NUMBER: 0001144204-07-000953 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20070108 DATE AS OF CHANGE: 20070108 GROUP MEMBERS: ARTHUR COHEN GROUP MEMBERS: HEALTHCOR ASSOCIATES, LLC GROUP MEMBERS: JOSEPH HEALEY SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ICOS CORP CENTRAL INDEX KEY: 0000874294 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 911463450 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-48079 FILM NUMBER: 07518166 BUSINESS ADDRESS: STREET 1: 22021-20TH AVENUE S.E., CITY: BOTHELL STATE: WA ZIP: 98021 BUSINESS PHONE: 2064851900 MAIL ADDRESS: STREET 1: 22021 20TH AVE SE CITY: BOTHELL STATE: WA ZIP: 98021 FORMER COMPANY: FORMER CONFORMED NAME: ICOS CORP / DE DATE OF NAME CHANGE: 20050927 FORMER COMPANY: FORMER CONFORMED NAME: ICOS CORP DATE OF NAME CHANGE: 20050927 FORMER COMPANY: FORMER CONFORMED NAME: ICOS CORP / DE DATE OF NAME CHANGE: 19930328 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HealthCor Management, L.P. CENTRAL INDEX KEY: 0001343781 IRS NUMBER: 202893581 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 152 WEST 57TH STREET, 47TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-622-7888 MAIL ADDRESS: STREET 1: 152 WEST 57TH STREET, 47TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D/A 1 v062092_sc13d-a.htm Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

(Amendment No. 4)

Under the Securities Exchange Act of 1934

ICOS Corporation

(Name of Issuer)

Common Stock, $.01 par value

(Title of Class of Securities)

449295104

(CUSIP Number)

HealthCor Management, L.P.

Carnegie Hall Tower

152 West 57th Street, 47^th Floor

New York, New York 10019

Attention: Mr. Steven J. Musumeci

212-622-7884

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

January 8, 2007

(Date of Event which requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. /__/.

CUSIP No. 449295104

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) HealthCor Management, L.P. 20-2893681
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ࿇ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) WC
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) ࿇
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 3,450,000
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 3,450,000
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,450,000
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) ࿇
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.24%
14	TYPE OF REPORTING PERSON (See Instructions) PN

CUSIP No. 449295104

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) HealthCor Associates, LLC 20-2891849
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ࿇ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) AF
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) ࿇
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 3,450,000
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 3,450,000
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,450,000
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) ࿇
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.24%
14	TYPE OF REPORTING PERSON (See Instructions) OO - limited liability company

CUSIP No. 449295104

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Arthur Cohen
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ࿇ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) AF
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) ࿇
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 3,450,000
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 3,450,000
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,450,000
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) ࿇
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.24%
14	TYPE OF REPORTING PERSON (See Instructions) IN

CUSIP No. 449295104

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Joseph Healey
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ࿇ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) AF
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) ࿇
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 3,450,000
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 3,450,000
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,450,000
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) ࿇
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.24%
14	TYPE OF REPORTING PERSON (See Instructions) IN

This Amendment No. 4 amends the Statement of Beneficial Ownership on Schedule 13D, originally filed with the Securities and Exchange Commission on November 2, 2006 and amended by amendment No. 1 on November 13, 2006, amendment No. 2 on December 4, 2006 and amendment No. 3 on December 14, 2006 (the “Schedule 13D”), by HealthCor Management, L.P., HealthCor Associates, LLC, Joseph Healey, and Arthur Cohen (collectively, the “HealthCor Group”). Unless specifically amended hereby, the disclosures set forth in the Schedule 13D shall remain unchanged.

Information contained in this Statement is as of the date hereof, unless otherwise expressly provided herein.

Item 5. Interest in Securities of the Issuer.

The response to Item 5 is hereby amended and supplemented in the following respects:

(a) - (b) As of January 8, 2007, the HealthCor Group beneficially owned in the aggregate 3,450,000 shares of Common Stock which represents approximately 5.24% of the Company's Common Stock based upon 65,891,226 shares of Common Stock of the Company issued and outstanding as of December 26, 2006 as reported in the Company's Revised Definitive Proxy Statement filed under Schedule 14A on December 27, 2006. HealthCor Management is the investment manager to certain private investment funds which hold the Common Stock reported herein and by virtue of such status may be deemed to be the beneficial owner of 3,450,000 shares of Common Stock of the Issuer. HealthCor Associates and Messrs. Cohen and Healey have voting and investment power with respect to the Common Stock reported herein, and therefore may each be deemed to be the beneficial owners of such Common Stock and, together with HealthCor Management, comprise a “group” within the meaning of Section 13(d)(3) of the Exchange Act. The HealthCor Group may not be able to vote certain shares of Common Stock on the proposed transaction if those shares were acquired after the record date for the shareholders meeting at which such transaction shall be voted upon; the HealthCor Group may attempt to obtain proxies for any such shares from their holders in order to vote them.

(c) In addition to the transactions disclosed in our Schedule 13D filed on November 2, 2006, amendment No. 2 on December 4 and amendment No. 3 on December 14, 2006, the HealthCor Group has made the following open-market purchases and sales of shares of Common Stock during the last 60 days as follows:

Date	Purchase/Sale	Number of Shares	Price Per Share
12/15/2006	Purchase	150,000	33.4
12/18/2006	Purchase	60,000	33.9
12/18/2006	Sale	710,000	33.9

Item 7. Material to be Filed as Exhibits.

Exhibit 1. Letter sent by HealthCor Management, L.P. to the Board of Directors of ICOS Corporation dated January 8, 2007.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: January 8, 2007

HealthCor Management, L.P.

By:

HealthCor Associates, LLC, general partner of HealthCor Management, L.P.

By: /s/ Arthur Cohen

Name: Arthur Cohen

Title: Manager

By: /s/ Joseph Healey

Name: Joseph Healey

Title: Manager

HealthCor Associates, LLC

By: /s/ Arthur Cohen

Name: Arthur Cohen

Title: Manager

By: /s/ Joseph Healey

Name: Joseph Healey

Title: Manager

/s/ Joseph Healey

Joseph Healey, Individually

/s/ Arthur Cohen

Arthur Cohen, Individually

EXHIBIT INDEX

Exhibit 1. Letter sent by HealthCor Management, L.P. to the Board of Directors of ICOS Corporation dated January 8, 2007.

EX-1 2 v062092_ex1.htm Unassociated Document

[HealthCor Logo - omitted]

January 8, 2007

ICOS Corporation

22021 20^th Avenue Southeast

Bothell, WA 98021

Attn:

Board of Directors

Paul N. Clark

James L. Ferguson

Robert J. Herbold

Jack W. Schuler

Vaughn D. Bryson

Gary L. Wilcox

Teresa Beck

Robert W. Pangia

David V. Milligan

Dear Gentlemen:

HealthCor Management, L.P. (“HealthCor”) is the investment advisor to private investment funds that currently own 3,450,000 shares of ICOS Corporation (“ICOS” or the “Company”). This represents more than 5% of all ICOS common shares outstanding.

We intend to vote against the proposed acquisition of ICOS by Eli Lilly & Company (“Eli Lilly”) at the upcoming shareholder meeting that was announced in the Definitive Revised Schedule 14A Proxy Statement filed with the Securities and Exchange Commission (“SEC”) on December 27, 2006 (the “Revised Proxy Statement”). We are also considering exercising our Dissenters’ Rights pursuant to the Washington Business Corporation Act.

We have reviewed the increased financial guidance put forth by ICOS’ management on December 14, 2006.¹ Additionally, we have reviewed the updated financial projections for ICOS that were presented in the Revised Proxy Statement. The increased financial guidance provided by ICOS’ management confirms HealthCor’s position (as detailed in our previous 13D filings) that the earnings power of ICOS is substantially higher than the market had expected when Eli Lilly and ICOS announced the proposed transaction on October 17, 2006. More importantly, our valuation analysis clearly showed that when using consensus Wall Street expectations and comparing to similar transactions, ICOS was worth significantly more than the initial $32 per share proposal from Eli Lilly.

¹ DEFA14A filed by ICOS Corporation with the SEC on December 14, 2006.

We believe the 6.25% increase of the proposed acquisition price to $34 per share still does not represent adequate compensation for ICOS shareholders. The better than expected earnings results released just days after the announcement of the initial $32 per share bid, combined with significantly higher financial projections for ICOS put forth by ICOS’ management in December 2006 and the more complete financial projections contained in the Revised Proxy Statement, each constitute a material event requiring an increase in the proposed acquisition price above $34 per share.

Shareholders now have a near complete understanding of the earnings power of ICOS. However, as with the better than expected earnings results released just after the initial bid was announced, ICOS’ management again chose to disclose additional material increases in financial projections AFTER negotiating a small increase in the proposed acquisition price. There have been three positive material changes in the financial outlook of ICOS AFTER the initial acquisition was announced. The market has not been able to adequately reflect any of the material changes in the financial position of ICOS since the initial bid. We question ICOS’ management’s apparent strategy of first announcing a proposed merger consideration followed by a subsequent release of improved financial projections. In our view, this sequence should have been REVERSED in order to ensure ICOS shareholders receive a fair price. The strategy followed by ICOS’ management has only served to work against the interests of the ICOS shareholders. Given the improved financial outlook of ICOS, we cannot understand how ICOS’ management and the Board of Directors can objectively rely upon the conclusions of the latest Fairness Opinion contained in the Revised Proxy Statement.

The small increase in the purchase price offered by Eli Lilly does not keep pace with the repeated and substantial increases in the financial projections put forth by ICOS’ management since the time of the initial bid. Using the new financial projections provided by ICOS’ management would imply that ICOS is selling for an even lower relative valuation than was initially proposed.

We remain committed in our view that the near term and long term earnings potential of ICOS is substantial. We are also firm in our belief that ICOS’ shareholders will not receive a fair value in this transaction with Eli Lilly as currently proposed.

We hope to hear from you so that we can have a productive discussion with you regarding the issues we have raised.

Sincerely,

HealthCor Management, L.P.

/s/ Joseph P. Healey			/s/ Arthur B. Cohen
Joseph P. Healey			Arthur B. Cohen
Portfolio Manager (212) 622-7880			Portfolio Manager (212) 622-7881

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