UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
February 2, 2005
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Date of Report (Date of earliest event reported)
OSI PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-15190 13-3159796
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
58 SOUTH SERVICE ROAD
MELVILLE, NY 11747
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(Address of principal executive offices)
(631) 962-2000
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address,
if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a- 12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On February 2, 2005, we entered into a Supply Agreement with Schwarz
Pharma Manufacturing, Inc. whereby Schwarz will exclusively manufacture and
supply all of our clinical and commercial requirements of Tarceva(TM)
(erlotinib) tablets for use, distribution, sale and resale in the United
States, its territories and possessions, and the Commonwealth of Puerto Rico,
as well as, under certain limited circumstances, other territories. The active
pharmaceutical ingredient, erlotinib, is manufactured in a three-step process
with high yield. We have entered into a long-term agreement with Sumitomo
Chemical Co., Ltd. and are in the process of entering into a long-term
agreement with Dipharma S.p.A. for the commercial manufacture of erlotinib (as
the hydrochloride salt). Under the Supply Agreement with Schwarz, we are
obligated to deliver erlotinib hydrochloride to Schwarz, and Schwarz is
obligated to manufacture the Tarceva(TM) tablets.
Commencing in the third year of the Supply Agreement, we are entitled,
on a calendar year-to-calendar-year basis, to manufacture for ourselves or
procure from any other party a specified percentage of our tablet requirements
upon payment of a yearly fee to Schwarz. In addition, at any time after February
2, 2010, we have the right to manufacture all or a portion of our tablet
requirements during the remaining term of the Agreement upon the payment of a
one-time fee to Schwarz. Under certain circumstances, if Schwarz fails to supply
product in accordance with the Agreement, we have the right, upon written notice
to Schwarz, to manufacture ourselves or procure from any other party the amount
of such product Schwarz failed to supply.
The Agreement continues until February 2, 2015, unless the parties
mutually agree to renew. We may terminate the Agreement if product is
permanently prohibited from being manufactured, shipped, sold, or marketed by
the Food and Drug Administration (FDA) or other applicable governmental
authority. In addition, we may terminate the Agreement upon the occurrence of
certain product supply failures occurring during a specified period. Schwarz may
terminate the Agreement upon our failure to make certain invoice payments, or if
we continue activities which are in violation of FDA regulations. The Agreement
is also subject to early termination in the event of certain customary defaults.
Because we are dependent on Schwarz's performance of its tablet
manufacturing obligations, we have commenced the process of qualifying an
alternate independent tablet manufacturer with the FDA to serve as a backup to
Schwarz, a process expected to be completed in 2006. In the meantime, we
intend to build up and maintain a sufficient inventory supply to enable us to
continue to sell Tarceva(TM) in the event of any disruptions in Schwarz's
ability to supply our requirements on a timely basis.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 8, 2005 OSI PHARMACEUTICALS, INC.
By: /s/ Robert L. Van Nostrand
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Robert L. Van Nostrand
Vice President and Chief Financial
Officer (Principal Financial Officer)
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