Merrill Lynch maintains buy on OSI

Merrill Lynch analyst Eric Ende maintained a buy rating on OSI Pharmaceuticals Inc. stock following recent data on Macugen. The analyst said that although positive interim phase 2 data for Macugen in patients with macular edema from central retinal vein occlusion was released, the data are early; Lucentis is likely to work in this indication as well; the market is relatively small; the drug wouldn't be approved for CRVO until at least 2009; and OSI will likely have to decide whether to keep Macugen before sales in CRVO make any contribution to revenue. Merrill Lynch said it continues to believe that Macugen will not be a major growth driver and will be divested. Merrill Lynch advises uncertainty around Macugen as an opportunity to buy the stock as Tarceva and the diabetes franchise remain undervalued assets. Shares of the Melville, N.Y.-based pharmaceutical company were up 99 cents, or 3.46%, at $29.61 on volume of 1,413,502 shares versus the three-month running average of 1,225,380 shares. (Nasdaq: OSIP)

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