Exhibit 99.1
[OSI PHARMACEUTICALS] NEWS RELEASE
Contact: OSI Pharmaceuticals, Inc. Burns McClellan (representing OSI)
Kathy Galante Kathy Jones, Ph.D. (media)
Director Blair Clark (investors)
Investor & Public Relations (212) 213-0006
(631) 962-2000
OSI PHARMACEUTICALS ANNOUNCES THIRD QUARTER
FINANCIAL RESULTS
MELVILLE, N.Y., AUG 11, 2003 (BUSINESS WIRE) -- OSI Pharmaceuticals, Inc.
(NASDAQ: OSIP) today announced its financial results for the Company's third
quarter ended June 30, 2003. The Company reported net losses for the third
quarter and nine month period of $75.1 million ($2.03 net loss per share) and
$132.4 million ($3.62 net loss per share), respectively, compared to net losses
of $29.4 million ($0.81 net loss per share) and $196.3 million ($5.48 net loss
per share) for the prior year third quarter and nine month period, respectively.
The numbers include acquisition related in-process research and development
charges of $31.3 million (or $0.85 per share) in the current quarter relating to
the Company's acquisition of Cell Pathways, Inc. in June 2003 and $130.2 million
(or $3.63 per share) for the prior year nine month period relating to the
acquisition of the oncology business of Gilead Sciences, Inc. in December 2001.
Adjusted for these charges, the net losses for the current third quarter and
nine month periods would have been $43.8 million ($1.18 net loss per share) and
$101.1 million ($2.77 net loss per share) and the net loss for the prior year's
nine month period would have been $66.1 million ($1.85 net loss per share).
For the third quarter and nine months ended June 30, 2003, revenues were $8.0
million and $20.1 million, respectively, compared to revenues of $4.5 million
and $17.2 million for the prior year periods. The increase in the third quarter
reflects the recognition of $5.5 million of commissions on U.S. oncology sales
of Novantrone(R). These sales commissions relate to the Company's co-promotion
agreement with Serono, S.A. which became effective March 11, 2003. In June 2003,
the Company completed its acquisition of Cell Pathways and began reporting sales
of Gelclair(TM). Operating expenses for the third quarter and nine month period
ended June 30, 2003 were $82.9 million and $153.8 million, respectively,
compared to $35.1 million and $221.8 million in the prior year periods (these
operating expenses include the in-process research and development charges in
the current quarter and prior year nine month period of $31.3 million and $130.2
million, respectively).
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The increases in operating costs and net loss during the current period
primarily relate to the major steps the Company has taken in establishing a
commercial operation around its two marketed products Novantrone(R) and
Gelclair(TM). The rights to these products were acquired through a co-promotion
agreement with Serono and the Company's acquisition of Cell Pathways. In
addition, immediately following the closing of the Cell Pathways' transaction,
the Company recovered full rights to market and promote Gelclair(TM) in North
America from Cell Pathways' marketing partner Celgene Corporation. The Company
incurred increased SG&A expenses and amortization costs relating to a $10
million transition services fee agreed with Serono, a quarterly maintenance fee
due Serono under the co-promotion agreement, and costs associated with rapidly
building a core commercial operation to support the two products. The Company is
in the process of activating its sales effort for Novantrone(R) and expects to
formally launch Gelclair(TM) in the fall.
HIGHLIGHTS OF THE QUARTER
TARCEVA(TM) DATA PRESENTED AT ASCO
Glioma
At this year's Annual Meeting of the American Society of Clinical Oncology
(ASCO) in May, Dr. Michael Prados of the University of California San Francisco,
presented data from a Phase I clinical study on the safety and pharmacokinetics
of Tarceva(TM) in patients with malignant glioma (brain cancer). Patients with
stable or progressive malignant glioma were treated with Tarceva(TM), starting
at 100 mg/day and received an additional 50mg/day until a dose-limiting toxicity
occurred. Twenty-six patients were stratified based on the use of enzyme
inducing antiepileptic drugs, which are used to prevent seizures. In addition to
receiving Tarceva(TM), some patients also received temozolomide, a type of
chemotherapy.
Sixteen percent of the evaluable patients (8/49) achieved a partial response
after treatment with Tarceva(TM) and three additional minor responses were
noted. Dr. Prados reported that the number of objective responses observed in
this study was encouraging. Dose-limiting toxicities occurred in six patients,
primarily due to skin rash. To date, the maximum tolerated dose has not been
reached.
Based on the encouraging safety profile and clinical activity observed in this
Phase I study, OSI and Genentech have made a decision to move forward with a
Phase II trial of Tarceva(TM) in glioma in the U.S. and initiation of this study
was reported on August 8th.
Bronchioloalveolar Cell Carcinoma (BAC)
In the BAC Phase II study, Dr. Vincent Miller of Memorial Sloan Kettering Cancer
Center reported that of the 50 patients who were treated with Tarceva(TM), 13
patients (26 percent) achieved a partial response. Of the 13 responders, 6
patients (46 percent) never smoked. The study is on-going and has been expanded
to 100 patients. Dr. Miller reported that the activity in Tarceva(TM) in
non-smokers is particularly encouraging. Side effects have been similar to those
observed in previous Phase II studies of Tarceva(TM), with all but one patient
developing rash and one patient experiencing grade 3 diarrhea.
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Additional Key Tarceva(TM) Presentations
Additional data presented included a retrospective analysis of Phase II study
data supporting OSI's previous observations that dosing Tarceva(TM) at levels
producing rash may correlate with improved patient survival and particularly
promising early data studying the use of Tarceva(TM) in combination with
Genentech's Avastin(TM), an anti-angiogenic agent.
Tarceva(TM) is being developed by a global alliance between OSI, Genentech and
Roche.
Commercial Operations
During this quarter, the Company completed the recruitment of a core commercial
operations team under the leadership of Mr. Gabriel Leung, who recently joined
the Company as Executive Vice-President and President, Oncology Business. Mr.
Leung's initial responsibilities include developing and implementing OSI's
commercial strategy including the imminent re-launch of Novantrone(R) and the
launch of Gelclair(TM) in the fall of this year. Prior to joining OSI, Mr. Leung
held executive positions at Pharmacia (where his responsibilities included
leadership of that company's global oncology business) and Bristol Myers Squibb.
OSI's core commercial operations team is comprised of approximately 60 sales and
marketing professionals including 30 sales representatives.
Cell Pathways Acquisition
In June 2003, OSI completed the acquisition of Cell Pathways, Inc. The
transaction added Cell Pathways' two leading clinical candidates, Aptosyn(R) and
OSI-461 (formerly CP461), the related technology platform and patent estate, and
the marketed product Gelclair(TM), a bioadherent oral gel that provides rapid
and durable oral pain management, to the OSI portfolio. This transaction is a
stock-for-stock merger valued at approximately $31 million based on the average
closing prices of OSI's common stock at the time of the announcement of the
acquisition. Each share of Cell Pathways' common stock was exchanged for .0567
shares of OSI's common stock. In addition, Cell Pathways' shareholders also
received consideration in the form of a five-year contingent value right by
which each share of Cell Pathways' common stock is eligible for an additional
..040 shares of OSI's common stock in the event of a filing of a new drug
application for either Aptosyn(R) or OSI-461. These additional rights are valued
at approximately $24 million, including acquisition related costs.
Conference Call
The Company will host a conference call reviewing the Company's third quarter
financial results for the period ended June 30, 2003, product portfolio and
recent business developments. The call is scheduled for tomorrow, August 12,
2003, at 10:00 A.M. Eastern Time. To access the live call or the seven-day
archive via the Internet, log on to www.osip.com. Please connect to the
Company's website at least 15 minutes prior to the conference call to ensure
adequate time for any software download that may be needed to listen to the
webcast. Alternatively, please call 1-800-915-4836 (U.S.) or 1-973-317-5319
(international) to listen to the call. Telephone replay is available
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approximately two hours after the call through August 19, 2003. To access the
replay, please call 1-800-428-6051 (U.S.) or 1-973-709-2089 (international). The
conference ID number is 303357.
OSI Pharmaceuticals is a leading biotechnology company focused on the discovery,
development and commercialization of high-quality, next-generation oncology
products that both extend and improve the quality-of-life for cancer patients
worldwide. OSI has a balanced pipeline of oncology drug candidates that includes
both next-generation cytotoxic agents and novel mechanism-based, gene-targeted
therapeutics focused in the areas of signal transduction and apoptosis. OSI's
most advanced drug candidate, Tarceva(TM) (erlotinib HCl), a small-molecule
inhibitor of the HER1 gene, is currently in Phase III clinical trials for lung
and pancreatic cancers. OSI has a commercial presence in the U.S. oncology
market where it exclusively markets Novantrone(R) (mitoxantrone concentrate for
injection) for approved oncology indications and Gelclair(TM) for the relief of
pain associated with oral mucositis.
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, the completion
of clinical trials, the FDA review process and other governmental regulation,
OSI's and its collaborators' abilities to successfully develop and commercialize
drug candidates, competition from other pharmaceutical companies, and other
factors described in OSI Pharmaceuticals' filings with the Securities and
Exchange Commission. Tarceva(TM) is an investigational compound and has not yet
been determined safe or efficacious in humans for its ultimate intended use.
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OSI Pharmaceuticals, Inc. and Subsidiaries
Selected Financial Information
Consolidated Statements Three Months Ended Nine Months Ended
of Operations (Unaudited) June 30, June 30,
-------- --------
(In thousands, except per share data) 2003 2002 2003 2002
---- ---- ---- ----
Revenues:
Sales commissions $ 5,491 $ - $ 6,378 $ -
Product sales 145 - 145 -
License and other revenues 1,519 2,537 4,478 8,042
Collaborative program revenues 867 1,974 9,085 9,131
Total revenues 8,022 4,511 20,086 17,173
Expenses:
Cost of product sales 55 - 55 -
Research and development 24,301 25,805 76,297 69,584
Acquired in-process
research and development 31,290 - 31,290 130,200
Selling, general and administrative 23,336 8,977 41,496 21,105
Amortization of intangibles 3,922 315 4,666 930
Total expenses 82,904 35,097 153,804 221,819
------ ------ ------- -------
Loss from operations $ (74,882) $ (30,586) $(133,718) $(204,646)
Other income (expense):
Investment income - net 1,567 3,475 6,469 11,514
Interest expense (1,605) (2,011) (4,817) (3,359)
Other expense - net (198) (317) (321) 155
----- ----- ----- ---
Net loss $ (75,118) $ (29,439) $(132,387) $(196,336)
========= ========= ========= =========
Basic and diluted net loss
per common share $ (2.03) $ (0.81) $ (3.62) $ (5.48)
========= ========= ========= =========
Weighted average shares of
common stock outstanding 36,992 36,292 36,618 35,855
====== ====== ====== ======
Condensed Consolidated June 30, September 30,
Balance Sheet (In thousands) 2003 2002
---- ----
(unaudited)
Cash and investments securities
(including restricted investments) $ 337,085 $ 476,277
========= =========
Total assets $ 516,937 $ 579,044
========= =========
Total stockholders'
Equity $ 282,807 $ 379,108
========= =========
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