OSI Pharmaceuticals Says It Will Buy Eyetech

OSI Pharmaceuticals Inc., the drug maker that sells the Tarceva cancer treatment, agreed to pay about $935 million in cash and stock to buy Eyetech Pharmaceuticals Inc. to enter the eye-treatment market.

OSI’s offer is 43% higher than Eyetech’s closing share price on Friday. Melville, N.Y.-based OSI said Sunday that it would pay $20 for each Eyetech share, $15 of it in cash and the rest in stock.

The purchase would enable OSI to expand beyond cancer and diabetes to eye-disease treatments, OSI Chief Executive Colin Goddard said.

“We’ve been looking for a follow-on behind Tarceva,” he said. “This deal works for us financially. It’s the kind of deal we should be doing at this stage as we build the company to another level.”

Eyetech’s Macugen, its only product on the market, treats age-related macular degeneration, the leading cause of blindness in people over 60. Eyetech, based in New York, sells it with partner Pfizer Inc.

OSI sells Tarceva with South San Francisco-based Genentech Inc., which is also developing Lucentis, a rival treatment to Macugen.

Both drugs are designed to treat “wet” macular degeneration, the most serious form of the disease. About 200,000 Americans are diagnosed with the condition each year.

OSI shares rose $1.39 to $40.77 on Friday. They have fallen 46% this year. Eyetech shares rose 1 cent to $13.99.

Eyetech spokesman Chris Smith declined to say when the company plans to hold a shareholder meeting to vote on the transaction.

Eyetech CEO David Guyer said June 22 that the company was developing new products for eye diseases that affect diabetics and the elderly.