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OSI to leave eye-drug business

From Bloomberg News

OSI Pharmaceuticals Inc., which competes with Genentech Inc. to treat the leading cause of blindness in the elderly, said Monday that it planned to exit the eye-disease business.

OSI is considering licensing or selling Macugen, which treats age-related macular degeneration, and its research assets, the Melville, N.Y.-based company said.

Macugen -- developed by Pfizer Inc. and Eyetech Pharmaceuticals Inc. and acquired by OSI last year -- is losing sales to Genentech’s Lucentis. U.S. regulators approved Lucentis on June 30 to fight age-related macular degeneration, and the drug is taking sales from Macugen and Novartis’ Visudyne, an older therapy.

“My sense is that the competition from Lucentis and off-label use of Avastin was overwhelming,” said Gene Mack, an analyst at HSBC Securities USA Inc. He said investors would be pleased with the news since OSI’s purchase of Eyetech was met with disapproval from many analysts.

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“Wall Street saw Lucentis coming at full speed,” Mack said. “No one could really understand why this acquisition was made at a premium.”

Mack said OSI would now be able to focus on products in its pipeline, including a promising diabetes candidate.

The National Eye Institute estimates that about 1.6 million people in the U.S. have age-related macular degeneration.

OSI shares rose 3 cents to $38.79.

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