The $900 million-dollar merger between OSI Pharmaceuticals and Eyetech Pharmaceuticals could be called off because the prospects for Eyetech’s only commercialised product have been diminished by competition.
In a statement, OSI said it wanted more time to look at the impact on Eyetech’s Macugen (pegaptanib) drug for wet age-related macular degeneration (AMD) of the strong clinical data reported earlier this week for Novartis’ rival product Lucentis (ranibizumab) [[08/11/05c]].
Lucentis has the same mechanism of action as Macugen – which is sold by Pfizer in the USA – and is due to be submitted for approval next year.
Macugen is the most prescribed treatment for wet AMD, with more than 50,000 patients treated since the product was launched in January 2005, and is also being developed for diabetic eye diseases. AMD is the leading cause of blindness in people over 60.
The drug has quickly emerged as a strong alternative to the only other approved drug for AMD, Novartis’ photodynamic treatment Visudyne (verteporfin), and was being used in twice as many patients in July, according to Verispan data. Eyetech has predicted that revenues for the drug will approach $190 million in 2005 [[22/08/05c]].
However, analysts have suggested that Lucentis’ commercialisation would quickly eat into Macugen’s market share. Meanwhile, there is a raft of other AMD treatments coming through Phase II and III clinical trials, and near-term competition is also possible from of-label use of Genentech’s cancer drug Avastin (bevacizumab), which like Macugen and Lucentis also blocks vascular endothelial growth factor (VEGF).
OSI said it ‘has made no decision at this time not to proceed with the closing’, but wanted more time to allow its ‘board of directors to fulfill its fiduciary obligation to assess the implications of the Lucentis data’.
But Eyetech quickly put out its own statement, indicating that it fears OSI may now back away from the marriage on the grounds that the Lucentis data represents a ‘material adverse effect’ that makes the terms of the link-up void. This is the same reason that Johnson & Johnson is trying to use to break or re-negotiate its proposed merger with Guidant [[08/11/05a]].
Eyetech said: “it is clear under the merger agreement that OSI has no basis to claim either that a ‘material adverse effect’ has occurred or that OSI has any other grounds not to close the merger.”
The announcements came on the heels of news that Eyetech shareholders had voted overwhelmingly to approve the sale to OSI, which co-markets its lung and pancreatic cancer drug Tarceva (erlotinib) with Genentech.
