Eli Lilly & Co. said on Tuesday it has agreed to acquire the biotechnology company Icos Corp. for $2.1 billion to gain full rights to the erectile dysfunction drug Cialis.

Indianapolis-based Lilly said it will acquire all the outstanding shares of Icos for $32 a share in cash, representing an 18 percent premium over Icos's closing share price on Monday of $27.12.

Lilly said it expects the acquisition to increase its earnings and earnings growth rate beginning in 2008 and, after a significant addition to sales in 2007, to modestly accelerate the company's sales growth rate after that.

"With full ownership of Cialis we will be able to realize operational efficiencies in the further development, marketing and selling of this important product," said Sidney Taurel, Lilly's chief executive officer, in a statement.

Cialis was launched in 2003 and generated worldwide sales of $456 million in the first six months of 2006.

Lilly, which currently markets Cialis with Icos through a joint venture, said it has captured more than 25 percent of the erectile dysfunction market in the United States.

The transaction is expected to close in late 2006 or early 2007.