OSI Pharmaceuticals to exit eye disease business, reports third quarter total revenues up 118%

By Jennifer Chiou

New York, Nov. 6 - OSI Pharmaceuticals, Inc. reported total revenues for the third quarter ended Sept. 30 of $74 million, an increase of $40 million or 118% from revenues of $34 million for the same period last year.

OSI also announced plans to leave the eye disease business and seek to maximize value for Macugen and its research assets in the area through either out-licensing, partnering or an outright sale of the business.

Revenues increased $205 million, or 233%, to $292 million for the nine months ended Sept. 30, compared to revenue of $88 million for the same period last year, mostly due to the growth in revenues arising from worldwide Tarceva (erlotinib) sales, and the addition of Macugen (pegaptanib sodium injection)-related revenue streams, OSI said.

According to the company, total worldwide net sales of Tarceva reported by collaborators Genentech, Inc. and Roche were $170 million and $460 million for the three and nine months ended Sept. 30, 2006, respectively.

Total U.S. Macugen sales were $9 million and $96 million for the three and nine months ended Sept. 30, 2006, respectively, OSI noted.

On an adjusted basis, the company reported a net loss of $13.4 million, or $0.23 per share, for three months ended Sept. 30, compared to a net loss of $20.0 million, or $0.39 per share, a year ago.

"We continue to believe that Macugen's product profile, our induction/maintenance strategy and promising data in the diabetic retinopathy area will ultimately result in a meaningful place for Macugen in treating retinal eye disease," chief executive officer Colin Goddard said in a news release.

"However, it is evident that a key strategic goal behind our acquisition of Eyetech - that of generating positive cash-flow from the eye business in the 2006-2008 period - will not be realized.

"This - and our reluctance to invest near-term in the eye disease business given our priorities in the oncology and diabetes areas - have led us to conclude that we can better realize value from these assets through strategic partnering strategies. In the near-term we, and our marketing partner, Pfizer, intend to continue to support the brand commercially."

OSI develops pharmaceutical products for the treatment of cancer, eye diseases and diabetes.

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