Estimate was for a 75 cent loss.
>>MELVILLE, N.Y.--(BW HealthWire)--May 7, 2002--OSI Pharmaceuticals, Inc. (NASDAQ: OSIP - news) today announced its financial results for the Company's period ended March 31, 2002. The net losses for the second quarter and six-month period were $24.5 million ($0.66 net loss per share), and $166.9 million ($4.56 net loss per share), respectively. The six-month numbers reflect a non-recurring in-process research and development charge of $130.2 million related to the acquisition of the oncology assets of Gilead Sciences, Inc. Excluding this one-time charge, the net loss for the six months ended March 31, 2002 would have been $36.7 million ($1.00 net loss per share) compared to a net loss before cumulative effect of accounting change of $1.7 million ($0.05 net loss per share) for the six-month period in the prior year. The increase in the year to date loss primarily reflects a planned expansion in the Company's research and development activities and particularly costs associated with the Phase III clinical program for Tarceva(TM) (erlotinib HCl, OSI-774), OSI's leading anti-cancer drug candidate. The Company has also increased investment in its proprietary cancer programs, including the oncology candidates acquired from Gilead.
The principal financial event during this quarter was OSI's issuance of $200 million aggregated principal amount of Convertible Senior Subordinated Notes. Interest on these Notes is payable at a rate of 4% per year. The Notes mature in 2009 and may be converted into OSI Common Stock at a conversion price of $50 per share.
"Maintenance of a strong balance sheet has been a key factor in our ability to rapidly build OSI over the last two years," stated Colin Goddard, Ph.D., Chairman and Chief Executive Officer of the Company. "We executed this convertible debt offering in order to replenish our strategic cash reserve in support of our continuing goal to supplement the growth of the Company through business and product acquisitions." The Company closed the quarter with approximately $564 million in cash and investments.
For the second quarter and six-months ended March 31, 2002, revenues were $6.8 million and $12.7 million, compared with $7.5 million and $13.2 million for the prior-year periods. Operating expenses for the second quarter and six-month period ended March 31, 2002, excluding the non-recurring charge of $130.2 million related to the acquisition of Gilead's oncology assets, were $33.1 million and $56.5 million, respectively, compared with $13.8 million and $27.6 million for the prior-year period. Research and development expenses are expected to continue to increase as the Company furthers its development program for Tarceva(TM) and increases its focus on proprietary programs, including the clinical development of (i) OSI-211 (liposomal lurtotecan), a liposomal formulation of the active topoisomerase I inhibitor lurtotecan, currently in Phase II clinical trials for the potential treatment of a variety of solid tumors, including relapsed ovarian and relapsed small cell lung cancer, (ii) OSI-7836, a novel nucleoside analog being developed as a next-generation competitor to gemcitabine, currently in Phase I clinical trials, which has demonstrated activity in a variety of refractory solid tumor xenograft models, (iii) OSI-7904L, a liposomal thymidylate synthase inhibitor, also in Phase I clinical trials which has demonstrated promising activity in pre-clinical testing for the potential treatment of various solid tumors, and (iv) OSI-754, an orally active farnesyl transferase inhibitor currently in Phase I clinical trials, which has demonstrated effectiveness in blocking the cell membrane association of H- and N- forms of the ras gene. We currently plan to develop OSI-754 for the treatment of bladder cancer where mutant and over-expressed forms of the H-ras oncogene are present.
Update on Collaborative Partners
The Company also updated investors on recent news concerning royalty-bearing drugs being developed by OSI's former collaborative partners:
Pfizer Inc. recently presented data at the 93rd Annual Meeting of American Association of Cancer Research on CP-547,632, a potent, selective inhibitor of vascular endothelial growth factor receptor (VEGFR), a key tyrosine kinase which was discovered as part of OSI's long standing cancer discovery program with Pfizer. VEGFR is an important target in anti-angiogenesis, a process inhibiting blood vessel growth, which is induced by solid tumors that require nutrients to enable growth. Data presented were for a Phase I clinical trial studying the pharmacokinetics of CP-547,632 in cancer patients. Results indicated that plasma levels of drug achieved at higher doses exceeded those levels estimated to be active from pre-clinical studies.
OSI also announced that its former partner in its gene transcription drug discovery collaboration, Aventis Pharmaceuticals, has initiated Phase I clinical trials on AVE 0309, a compound designed to inhibit the expression of Interleukin-4 (IL-4). IL-4 is believed to be an important target in long-term management of asthma.
OSI Pharmaceuticals is a leading biopharmaceutical company primarily focused on the discovery, development and commercialization of innovative products for the treatment of cancer. OSI has built a pipeline of discovery programs and drug candidates addressing major, unmet medical needs in cancer and selected opportunities, including diabetes, arising from the Company's extensive drug discovery research programs that represent significant commercial opportunities outside of cancer. OSI's most advanced drug candidate, Tarceva(TM) (erlotinib HCl, OSI-774), a small molecule inhibitor of the EGFR gene, is currently in Phase III clinical trials for lung and pancreatic cancers.
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 on OSI Pharmaceuticals' filings with the Securities and Exchange Commission.
Additional information on OSI Pharmaceuticals is available at www.osip.com
OSI Pharmaceuticals, Inc. and Subsidiaries
Selected Financial Information
Consolidated Statements of Operations
Three Months Six Months
Ended March 31, Ended March 31,
2002 2001 2002 2001
---- ---- ---- ----
Revenues:
Collaborative program
revenues, principally
from related parties $4,041,483 $5,053,396 $7,157,105 $10,321,812
License and related
revenues............ 2,377,083 2,302,083 4,720,832 2,595,833
Other research revenues 351,613 175,946 784,431 308,734
----------- ----------- ----------- -----------
Total revenues....... 6,770,179 7,531,425 12,662,368 13,226,379
----------- ----------- ----------- -----------
Expenses:
Research and
development......... 26,525,374 10,778,075 43,779,372 21,348,649
Acquired in-process
research and
development.......... - - 130,200,000 -
Selling, general and
administrative....... 6,249,960 2,774,535 12,055,786 5,724,668
Amortization of
intangibles.......... 306,194 185,473 615,575 370,946
Production and service
costs................ 21,612 74,752 71,415 204,117
----------- ----------- ----------- -----------
Total expenses...... 33,103,140 13,812,835 186,722,148 27,648,380
----------- ----------- ----------- -----------
Loss from
operations $(26,332,961)$(6,281,410)$(174,059,780)$(14,422,001)
Other income (expense):
Net investment income. 3,465,271 7,722,426 8,039,412 12,861,950
Interest expense...... (1,345,796) (6,127) (1,347,802) (12,271)
Other expense - net... (301,434) (83,805) 471,184 (98,309)
----------- ----------- ----------- -----------
Net income (loss) before
cumulative effect of
accounting change $(24,514,920)$1,351,084 $(166,896,986) $(1,670,631)
Cumulative effect of
the change in accounting
for the recognition of
upfront fees.......... - - - (2,625,000)
----------- ----------- ----------- -----------
Net income (loss) $(24,514,920) $1,351,084 $(166,896,986) $(4,295,631)
============ ========== ============== ===========
Basic and diluted net
income (loss) per
common share:
Before cumulative effect
of accounting change... $ (0.66) $ 0.04 $ (4.56) $ (0.05)
Cumulative effect of
accounting change..... - - - (0.08)
--------- ----------- ----------- -----------
After cumulative effect
of accounting change.. $ (0.66) $ 0.04 $ (4.56) $ (0.13)
=========== =========== =========== ===========
Weighted average shares
of common stock
outstanding:
Basic................. 37,086,137 34,307,448 36,576,558 32,839,452
=========== =========== ========== ===========
Diluted............... 37,086,137 36,603,669 36,576,558 32,839,452
=========== =========== ========== ===========
Condensed Consolidated Balance Sheet March 31, September 30,
2002 2001
Cash and investments securities
(including restricted investments)..$564,375,414 $551,478,461
============= ==============
Total assets........................$663,564,268 $591,689,187
============= ==============
Total stockholders' equity.........$427,393,848 $549,832,346
============== ==============<<
Cheers, Tuck |
