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EXHIBIT 99.2
[OSI PHARMACEUTICALS LOGO]
OSI Pharmaceuticals Reports First Quarter Financial Results
- Company Updates Investors on OSI-774 -
UNIONDALE, N.Y., Feb. 13 /PRNewswire/ -- OSI Pharmaceuticals, Inc.
(Nasdaq: OSIP) today announced its financial results for the first quarter of
fiscal 2001, ended December 31, 2000. The key financial event for the quarter
was the closing of a major public offering of the Company's common stock at $70
per share with gross proceeds, including the exercise of an over-allotment
option, totaling $431 million. OSI increased its research and development
expenses to $10.6 million, up from $8.1 million in the prior year period.
Revenues for the quarter were $5.7 million, compared to $9.9 million for the
prior year period. The Company reported a net loss of $5.6 million (or $0.18 per
share), for the first quarter of 2001 compared to a net income of $3.5 million
in the prior year period.
The decreases in revenues and earnings are related to two one-time
events in the prior year period, a $3.7 million gain arising from the sale of
the Company's diagnostics assets to The Bayer Corporation and a $3.5 million
technology access fee paid by Tanabe Seiyaku Co., Ltd. upon the initiation of a
collaboration in diabetes. First quarter revenues and earnings were also
impacted by the recognition of the Tanabe technology access fee over the four
year term of the collaboration. Under the SEC's Staff Accounting Bulletin No.
101, effective October 1, 2000, the Company changed its accounting for
non-refundable, upfront fees received under collaborative research and
development contracts. Such fees had previously been recognized when received,
but will now be recognized over the term of the agreement. Thus a one-time
charge of $2.6 million offset by prorated revenues of $200,000, has been
recorded in the first quarter of 2001.
"Our successful financing will enable us to increase our level of
investment in our proprietary discovery and development programs and continue
our evolution away from a business model focused on partner funded research
collaborations," stated Colin Goddard, Ph.D., Chairman and Chief Executive
Officer of OSI.
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OSI completed the research funding phase of both the Aventis
Pharmaceuticals Inc. and Solvay Pharmaceuticals, B.V. collaborative programs.
These partners will continue the development of several late-stage, pre-clinical
candidates resulting from the collaborations in the cholesterol lowering, asthma
and cardiovascular areas, while OSI will receive royalties on products which may
arise from these programs. The Company will also complete the research funding
phase of its cancer alliance with Pfizer Inc. in March 2001. This program to
date has produced OSI-774, OSI's lead anti-cancer drug candidate which is
designed to inhibit the epidermal growth factor receptor (EGFR) and is currently
in Phase II clinical trials, along with an anti-cancer drug candidate targeting
the ras oncogene and an anti-angiogenesis compound which inhibits the vascular
endothelial growth factor receptor (VEGFR) both in Phase I clinical trials.
Pfizer will continue the development of these Phase I programs and other drug
candidates while OSI will receive royalties on products arising from these
programs. The successful conclusion of this collaboration will allow OSI to use
its cancer discovery resources and technology for the continued development of
its proprietary oncology franchise. OSI will continue the funded R&D
collaboration with Pfizer in the area of cosmeceuticals.
OSI-774 Program
The Company also updated investors on the progress of its OSI-774
development program. Together with its partners, Genentech Inc. (NYSE: DNA) and
Roche, OSI has been formulating a global development plan for OSI-774. The
alliance partners intend to initially pursue the development of the product in
all of the major tumor markets, including non-small cell lung cancer (NSCLC), in
which the alliance will focus on front-line combination approaches. Additional
programs directed toward unmet clinical needs in refractory solid tumor
indications will also be conducted. Moving forward, the Company intends to
update investors on this program as studies are initiated and data reported.
"Our co-development alliance with Genentech and Roche is off to a great
start," commented Dr. Goddard. "We are delighted with the quality and commitment
of the development teams on the OSI-774 program and the speed and focus with
which a comprehensive development program is coming together."
The Company also announced that OSI-774 has been accepted by the
National Cancer Institute (NCI) for development through their Cancer Therapy
Evaluation Program (CTEP). Recommendations for proposals for NCI sponsored
studies in glioma, head and neck, hepatobiliary, gastro-esophageal junction,
endometrial, cervical, ovarian, and renal carcinomas have been issued.
The Company informed investors that it anticipates presenting data on
its current Phase II program at this year's American Society of Clinical
Oncologists (ASCO) meeting in San Francisco from May 12-15, 2001. Studies were
conducted in NSCLC, head and neck and ovarian cancers, that examined the use of
OSI-774 as a single agent in advanced, refractory patients. Intermediate data on
the two main studies, a 56 patient study in NSCLC and a 113 patient study in
head and neck cancer was presented at the European Organization for the Research
and Treatment of Cancer (EORTC) meeting in November 2000. The drug has been
generally well tolerated in all indications with an acneiform rash being the
most prevalent of reported side effects. Forty-eight percent of the lung cancer
patients had either stabilization of their disease or a partial response (6 with
partial responses) and 42% of the 78 evaluable patients in the head and neck
cancer study had either disease stabilization or partial response (10 with
partial responses). The Company also stated that initial summary data of the
smaller 34 patient ovarian study showed encouraging indications of activity.
Scans taken at eight weeks indicated 3 of 30 evaluable patients with partial
responses and 15 of 30 patients with stable disease. Data documenting the
duration of responses was only available for 2 of the patients with partial
responses and 3 with stable disease. Detailed updates on all three trials will
be presented at the ASCO session.
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OSI Pharmaceuticals is a leading biopharmaceutical company with a
substantial portfolio of product opportunities for commercialization with the
pharmaceutical industry. OSI's research programs are focused in the areas of
cancer therapeutics, respiratory diseases, diabetes, and cosmeceuticals. OSI
utilizes a comprehensive drug discovery and development capability to facilitate
the rapid and cost-effective discovery and development of novel, small molecule
compounds against more than 40 gene targets.
Additional information on OSI Pharmaceuticals is available on the World
Wide Web at http://www.osip.com.
This news release contains forward-looking statements. These statements
are subject to known and unknown risks and uncertainties that may cause actual
future experience and results to differ materially from the statements made.
Factors that might cause such a difference include, among others, uncertainties
related to the identification of lead compounds, the successful pre-clinical
development thereof, the completion of clinical trials, the FDA review process
and other governmental regulation, pharmaceutical collaborators' ability to
successfully develop and commercialize drug candidates, competition from other
pharmaceutical companies, product pricing and third party reimbursement, and
other factors described in OSI Pharmaceuticals' filings with the Securities and
Exchange Commission.
OSI Pharmaceuticals, Inc. and Subsidiaries
Selected Financial Information
Condensed Consolidated Income Statements
Quarter Ended December 31,
2000 1999
Revenues
Collaborative program revenues,
principally from related parties $ 5,268,416 $ 5,999,084
Technology access fee 218,750 3,500,000
Sales of products and services 84,193 254,163
Other research revenues 48,595 90,458
License revenues 75,000 25,000
Total revenues 5,694,954 9,868,705
Expenses
Research and development 10,570,574 8,111,482
Production and service costs 129,365 221,739
Selling, general and administrative 2,950,133 2,136,650
Amortization of intangibles 185,473 313,341
Total expenses 13,835,545 10,783,212
Loss from operations $ (8,140,591) $ (914,507)
Other income (expense):
Net investment income 5,139,524 723,722
Other expense - net (20,648) (39,333)
Gain on the sale of diagnostics business -- 3,745,844
Net (loss) income before cumulative
effect of accounting change $ (3,021,715) $ 3,515,726
Cumulative effect of the change in
accounting for the
recognition of upfront fees (2,625,000) --
Net (loss) income $ (5,646,715) $ 3,515,726
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Net (loss) income per share:
Basic:
Before cumulative effect of
accounting change $ (0.10) $ 0.16
Cumulative effect of accounting change $ (0.08) $--
After cumulative effect of
accounting change $ (0.18) $ 0.16
Diluted:
Before cumulative effect of
accounting change $ (0.10) $ 0.16
Cumulative effect of accounting change $ (0.08) $--
After cumulative effect of
accounting change $ (0.18) $ 0.16
Weighted average number of shares
of common stock outstanding:
Basic 31,403,369 21,559,280
Diluted 31,403,369 22,158,035
Pro forma information:
Net (loss) income, assuming cumulative
effect of accounting change is applied
retroactively $ (3,021,715) $ 234,476
Basic (loss) income per share $ (0.10) $ 0.01
Diluted (loss) income per share $ (0.10) $ 0.01
Condensed Consolidated Balance Sheet December 31, September 30,
2000 2000
Cash and short-term investments $ 486,799,551 $ 85,064,671
Total assets $ 501,331,160 $ 99,776,008
Total stockholders' equity $ 491,470,785 $ 89,881,629
SOURCE OSI Pharmaceuticals, Inc.
-0- 02/13/2001
/CONTACT: Kathy Galante, Corporate Communications of OSI Pharmaceuticals,
Inc., 516-222-0023, kgalante@osip.com; Investors - Ethan Denkensohn, Media -
Justin Jackson or Kathy Jones, Ph.D., all of Burns McClellan, 212-213-0006,
for OSI Pharmaceuticals, Inc./
/Web site: http://www.osip.com/
(OSIP)