OSI Pharmaceuticals said it would curb its research activities related to the acute macular degeneration (AMD) drug Macugen (pegaptanib) due to disappointing sales.
“We have curtailed or eliminated the majority of research on eye disease,” said Michael Atieh, EVP, chief financial officer, during a recent earnings call.
OSI reported a net loss of $319.9 million in the second quarter, including a one-time charge of $319 million in connection with its 2005 acquisition of Eyetech Pharmaceuticals.
The company, which has a partnership with Pfizer to market Macugen, said the drug had US sales of $36.7 million in the second quarter. Sales are expected to decline further in the second half of 2006, but OSI declined to provide sales guidance until its third-quarter earnings report. Tarceva (erlotinib), the cancer drug OSI markets with Genentech and Roche, had $157 million in second quarter sales.
Macugen has come under pressure from Genentech, which received approval for its own wet AMD drug Lucentis (ranibizumab) this year, and from ophthalmologists’ off-label use of Genentech’s Avastin, which is similar to Lucentis, for treating AMD. Lucentis is approved for maintaining and improving vision in patients with wet AMD; Macugen’s label limits use to maintenance therapy.
As a result, OSI and Pfizer decided to wind down an active Phase III combination study, rethink a Phase II diabetic macular edema study, close a research facility three months earlier and suspend plans to invest in exploratory eye-disease research. OSI said it hopes these efforts cause the eye disease business to break even by next year.
“This is truly a lean and mean operation at this point,” said Colin Goddard, chief executive officer, adding that the firm will increase spending in its Tarceva R&D program.
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