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OSI, Eyetech Pharmaceuticals enter merger agreement

OSI Pharmaceuticals entered a merger agreement to acquire Eyetech Pharmaceuticals. The acquisition is subject to a number of closing conditions, yet parties expect the transaction to close by the end of 2005.

OSI Pharmaceuticals entered a merger agreement to acquire Eyetech Pharmaceuticals. The acquisition is subject to a number of closing conditions, yet parties expect the transaction to close by the end of 2005.

Under the agreement, OSI will acquire all outstanding shares of Eyetech Pharmaceuticals’ common stock at a price of $20 per share in a combination of cash and OSI common stock, for an aggregate purchase price of about $935 million. This represents a 43% premium over Eyetech Pharmaceutical’s $13.99 closing share price on Aug. 19. The merger agreement calls for 75% of the purchase price, or $15 per share, to be paid in cash and the remaining 25% to be paid in OSI common stock.

“OSI is the ideal partner for Eyetech,” said David R. Guyer, MD, chief executive officer of Eyetech Pharmaceuticals, in a prepared statement. “With OSI, we create a powerful new biopharmaceutical franchise, one with scale, depth of resources, as well as strength and security of a diversified and growing revenue base.”

OSI’s CEO Colin Goddard, PhD, added, “The combination of OSI and Eyetech will create a substantial biopharmaceutical company with over $600 million of projected revenues in 2006 and strong growth prospects in the future. We believe the proposed transaction will deliver scale to OSI’s current business, bring forward profitability, and provide for double-digit revenue growth over the next 5 years.”

He added that the company would have three business units in the “attractive commercial arenas” of oncology, eye diseases, and diabetes.

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