OSI Pharmaceuticals and Eyetech Pharmaceuticals Announce Signing of Definitive Merger Agreement

23-Aug-2005

OSI Pharmaceuticals, Inc. and Eyetech Pharmaceuticals, Inc. announced that they have entered into a definitive merger agreement whereby OSI has agreed to acquire Eyetech, a biopharmaceutical company that focuses on the development and commercialization of novel therapeutics to treat eye diseases. Under the merger agreement, OSI will acquire all outstanding shares of Eyetech common stock at a price of $20 per share in a combination of cash and OSI common stock, for an aggregate purchase price of approximately $935 million, representing a 43 percent premium over Eyetech's $13.99 closing share price on August 19, 2005. The merger agreement calls for 75 percent of the purchase price, or $15 per share, to be paid in cash with the remaining 25 percent to be paid in OSI common stock using an Exchange ratio of 0.12275 OSI shares for each share of Eyetech. Approximately 5.7 million OSI shares will be issued in the transaction. The acquisition is subject to a number of closing conditions, including Eyetech stockholder approval and regulatory approvals, and the parties expect to close the transaction by the end of 2005. Eyetech will seek stockholder approval of the transaction at a special meeting called to consider the merger, the date of which will be announced following completion of initial regulatory filings.

The acquisition of Eyetech by OSI creates a diversified biopharmaceutical company that focuses on three therapeutic disease areas of significant market potential: oncology, eye diseases and diabetes. The combined company will have two major marketed products (for the treatment of cancer and age-related macular degeneration) and a robust product pipeline offering both new indications for the marketed products and novel therapeutics in all three disease areas.

With combined revenues of over $600 million projected for 2006, OSI will be well positioned to accelerate profitability into 2006. Moving beyond 2006, OSI believes that revenues of the combined company will grow at a compound annual growth rate in the mid-teens for the five-year period starting in 2007, and that EBITDA and adjusted EPS (which excludes the amortization of identifiable intangible assets related to this transaction) compound annual growth rates during the same period will be greater than 30 percent and 25 percent, respectively, creating a strong growth company further supported by a dynamic product portfolio and pipeline.

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