OSI Pharmaceuticals, Inc. (OSIP)

NetscribeBiotech (87.17) Submitted: 5/28/07 5:36 AM : Start Price: $37.26 OSIP Score: 36.58

OSI pharmaceutical is looking to position itself as a specialty player in the oncology market through its drug Tarceva, which has booked global sales worth $650 million in 2006 alone. The company’s partnership with Genetech and Roche to market Tarceva in the U.S markets and international markets respectively has done wonders. To add on to this Tarceva has been approved in 69 countries to treat advanced non-small cell lung cancer (NSCLC) and in 42 countries to treat pancreatic cancer as on January 2007. The drug was further approved as first line therapy for metastatic pancreatic cancer in combination with Gemcitabine in January 2007. With lung cancer becoming the most common form of cancer in Europe and the number of people diagnosed with NSCLC in the U.S rising, Tarceva could become a blockbuster compound in the future.





The collaborative agreement OSI pharmaceuticals have with its partners is beginning to yield rich dividends with the sublicensing of GKA program and clinical candidate PSN010 to Eli Lilly & Co for an upfront fee of $25 million, which has the potential to generate $360 million on successful commercialization. Further, revenue flow is also expected from its DPIV inhibitor Januvia, for which the company’s partner Merck & Co has received FDA approval in the last quarter of 2006. The year 2007 will also see the regulatory submission for Tarceva in Japan by Chugai pharmaceuticals, a subsidiary of Roche.





Meanwhile the product pipeline is also buzzing with OSI930, OSI817 – both of which are intended for oncology market and PSN602 and GPR119 addressing the diabetes market where the company has a presence.





The decision of the company to consolidate its presence in the oncology segment by exiting the eye care segment, where the intended acquisition went wrong will strengthen the market position of the firm. Thus the company looks all set to inch forward in the path that it has been pursuing for the last six months.

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