At their quarterly conference call OSI Pharmaceuticals, Inc. (NASDAQ: OSIP) announced a planned exit of their recent $650M Eyetech acquisition. OSI bought Eyetech primarily for the age related macular degeneration (AMD) drug Macugen. Macugen sales for the quarter rapidly and dramatically declined, reaching only $9M in sales relative to $87M for the previous two quarters. OSI seeks to maximize the value for Macugen and its research assets in the area via out-licensing, partnering or a sale of the 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, Ph.D., Chief Executive Officer
The AMD market is crowded and is becoming ever more competitive. Visudyne, an AMD treatment from QLT, Inc. (NASDAQ: QLTI) and Novartis AG (NYSE: NVS), like OSI, has reported rapid sales erosion in 2006 of ~ $350M down from ~$380M. Genentech (NYSE: DNA) is on the AMD offensive with their off label sales of Avastin however, with planned royalties to Xoma (NASDAQ: XOMA), Lucentis appears to be accelerating as the choice for treatment. Lucentis is priced at $1,950 per dose and it is estimated that the average dosage will be five to seven treatments per year, yielding an annual cost of the treatment from $9,750 to $13,650. With as many as 15 million Americans affected by wet and dry forms of AMD Lucentis may easily achieve billion dollar sales and blockbuster status.
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