OSI reports 118% increase in revenue; announces plan to exit eye disease market

MELVILLE, N.Y. — OSI Pharmaceuticals Inc. reported total revenues of $74 million for the third quarter of 2006, a 118% increase over the third quarter 2005.

The increase was primarily due to rising net revenues from the company's cancer drug Tarceva (erlotinib), which totaled $39.38 million for the quarter, and net U.S. sales of Macugen (pegaptanib sodium injection), which totaled $9 million, according to a press release from OSI.

Despite the increase in sales, the company still reported a third quarter GAAP net loss of $21.3 million, or $0.37 per share, compared to a net loss of $20 million, or $0.39 per share, for the same period in 2005, according to the release.

OSI also announced plans to exit the eye disease market by out-licensing, partnering or selling its Macugen business.

"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. 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," Colin Goddard, PhD, chief executive officer of OSI Pharmaceuticals, said in the release.

"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," he said.