OSI EX. 2014 - 0001
`
`ANNUAL REPORT 20 08
`
`To Our Shareholders
`
`OSI EXHIBIT 2014
`APOTEX V. OSI
`IPR2016-01284
`
`

`

` OSI EX. 2014 - 0002
`In 2008, OSI Achieved Sustained Profitability
`
`Tarceva Worldwide Sales
`Total Revenues
`Pre-Tax Income from Continuing Operations
`Net Income from Continuing Operations
`Ending 2008 Cash
`
`$1.12 billion
`$379 million
`$133 million
`$467 million
`$516 million
`
`In order to provide additional, meaningful comparisons for our 2008 results,
`we provided the following adjusted, or non-GAAP, financial measures during
`our 2008 year-end earnings call:
`
`In millions, except per share amounts
`
`2008 GAAP Results
`
`2008 Non-GAAP Adjustments
`Valuation Allowance Gain
`
`2008 Non-GAAP Results
`
`2008 Non-GAAP Pro Forma Adjustments
`Retrospective Impact of APB 14-1
`Imposition of 2009 Statutory Tax Rate
`
`2008 Non-GAAP Pro Forma
`
`Weighted Average Diluted Shares Outstanding
`
`2008 GAAP Results
`
`2008 Non-GAAP1
`
`2008 Pro Forma1
`
`Net Income
`from
`continuing
`operations
`$467
`
`($337)
`$130
`
`($13)
`($44)
`$73
`
`66.9
`64.3
`60.4
`
`Fully
`Diluted
`EPS
`$7.34
`
`($5.20)
`$2.14
`
`($0.12)
`($0.78)
`$1.24
`
`1 The decrease in weighted shares outstanding is due to lower adjusted net income.
`
`Use of Non-GAAP Financial Measures
`
`The table above presents both generally accepted accounting principles (GAAP) and non-GAAP financial measures
`for the year ended December 31, 2008. The non-GAAP financial measures include adjusted net income from
`continuing operations and adjusted earnings per share from continuing operations, each of which has a GAAP
`equivalent. We have provided these non-GAAP financial measures to adjust for the impact of a $337 million non-
`cash gain in the fourth quarter of 2008 related primarily to our expected utilization of net operating loss
`carryforwards. These non-GAAP financial measures also include certain proforma adjustments, which assume
`that the following items were in effect for the fiscal year ended December 31, 2008: (i) the adoption of FASB
`Staff Position APB 14-1 which required us to recognize additional non-cash interest expense related to our con-
`vertible debt instruments beginning in 2009; and (ii) the increase in our income tax expense to a 40% effective
`rate, even though we expect to continue to pay cash taxes at 2% to 4% alternative minimum tax rates. We be-
`lieve that the non-GAAP financial measures included above provide investors with (i) financial measures that we
`use in the management of our business and (ii) additional, meaningful comparisons of current results to prior pe-
`riods’ results by excluding the impact of significant non-cash items that we do not believe reflect our fundamen-
`tal business performance. These non-GAAP measures should not be considered in isolation of, or
`as an alternative to, measurements required by GAAP.
`
`

`

`To Our Shareholders
`
` OSI EX. 2014 - 0003
`
`2008 was another year of real scientific
`progress and strong financial perform-
`ance for our company. In November,
`Tarceva® crossed the $1 billion annual
`sales mark – achieving this universally
`recognized metric for a “Blockbuster”
`medicine within four years of launch –
`and finished the year with annual
`global sales of $1.12 billion, up 27%
`on 2007 sales. OSI corporate revenues
`of $379 million fueled adjusted net
`income from continuing operations of
`$130 million (up 26% from the prior
`year) and adjusted earnings per share
`from continuing operations of $2.14,
`up from $1.70 in 2007 (see accompa-
`nying chart on preceding page for
`reconciliation of all adjusted measures).
`Balance sheet “cash and short-term
`investments” ended 2008 at approxi-
`mately $516 million and have been
`conservatively managed throughout
`the ongoing financial crisis in the
`global economy. We have continued
`to manage our cost base judiciously
`and the emergence of significant
`DP-IV patent estate revenues –
`which contributed over 10% of 2008
`revenues – has added important
`diversity to our revenue line. We
`expect this to be a major contributor
`to our revenue growth rate going
`forward as this class of diabetes
`drugs continues to expand in use.
`
`We strive for an effective balance
`between financial performance and
`
`the ability to re-invest in our mission
`of developing innovative and differen-
`tiated new medicines that deliver
`meaningful strides forward in the
`treatment of cancer and diabetes/
`obesity for patients around the world.
`In 2008, we invested approximately
`$139 million in a research and devel-
`opment program that:
`
`(i) Yielded a major Phase III success
`for Tarceva in the SATURN trial
`(potentially allowing the expansion
`of its use to earlier stage lung
`cancer patients – a position
`reinforced by the subsequent
`success of the ATLAS trial in early
`2009);
`(ii) Saw the continued expansion of
`our R&D efforts to explore Tarceva
`use beyond its core indications in
`second-/third-line non-small cell
`lung cancer (NSCLC) and first-line
`pancreatic cancer;
`(iii) Included the advancement of all
`four of our primary development
`candidates (OSI-906, OSI-027,
`PSN821 & PSN602) in clinical trials
`(creating a bona fideclinical
`pipeline of wholly owned assets
`arising from our internal de novo
`drug discovery research); and
`(iv) Continued to establish our
`research groups as recognized
`leaders in the areas of epithelial-
`to-mesenchymal transition (EMT)
`biology in cancer and in the
`
`neuroendocrine control of body
`weight and glycemia in the
`diabetes/obesity arena.
`
`None-the-less, all this progress has
`occurred against the back-drop of
`an unprecedented global economic
`downturn precipitated by the banking
`crisis at the end of 2008. Even within
`this bleak overall environment, the
`pharmaceutical and biotechnology
`industries are widely perceived to be
`in their own acute form of turmoil.
`The specter of uncertainty surrounding
`U.S. healthcare reform (and associated
`pricing and reimbursement pressures);
`widespread pending patent expirations
`and poor R&D productivity in the
`pharmaceutical sector; a financing
`crisis in the biotechnology sector
`(which could see widespread bank-
`ruptcies for the first time in the
`industry’s history); increasing and
`profligate generic industry challenge
`to essentially all valuable innovator
`intellectual property; and intense com-
`petition in new product development,
`has led to widespread pessimism and
`anxiety amongst industry analysts and
`commentators alike.
`
`And yet, despite the fact that many
`of these macro developments impact
`our business to varying degrees, we
`enter 2009 with a sense of growing
`confidence in an organization that
`is anchored around a proven and
`
`We strive for an effective balance between
`financial performance and the ability to re-invest
`in our mission of developing innovative and
`differentiated new medicines that deliver
`meaningful strides forward in the treatment of
`cancer and diabetes/obesity.
`
`Colin Goddard, Ph.D., Chief Executive Officer (left) and Robert A. Ingram, Chairman of the Board
`
`

`

`entrenched principal asset in Tarceva;
`possesses a high quality emerging
`clinical and pre-clinical pipeline; and
`has a solid financial strength that
`remains a rarity in the biotechnology
`sector – providing the company with
`appreciable strategic flexibility at a
`time when many biotech companies
`are in survival mode. The following
`commentary summarizes our
`progress as a business in 2008 and
`into the early part of 2009:
`
`TARCEVA
`
`Tarceva is commercialized in collabo-
`ration with Roche. We receive a 50%
`profit share on U.S. sales of Tarceva
`and a 21% royalty on sales in the
`rest of the world. Tarceva’s significant
`global growth in 2008 was driven
`primarily by ex-U.S. sales which
`increased by nearly $200 million from
`$470 million in 2007 to $665 million
`in 2008. The first full year of sales in
`the Japanese market was an important
`part of this growth. In addition,
`Tarceva was endorsed in November
`by the UK’s National Institute for
`Health and Clinical Excellence (NICE)
`as an alternative treatment to the
`intravenous chemotherapy agent
`docetaxel for the second-line treatment
`of advanced NSCLC. Lung cancer
`patients in England, Wales and
`Northern Ireland will now have
`access to an oral targeted therapy
`
` OSI EX. 2014 - 0004
`
`that has been approved throughout
`Europe for advanced NSCLC. Tarceva
`has received regulatory approval in a
`total of 94 countries for NSCLC and
`70 countries for pancreatic cancer.
`
`The more modest growth seen in the
`U.S. market (2008 sales of $457 million
`versus 2007 sales of $417 million)
`represents a credible achievement
`in the face of the continuing reim-
`bursement imbalance between older
`cytotoxic (and newer biological) anti-
`cancer drugs reimbursed under the
`Medicare Part B regulations and the
`new generation of oral anti-cancer
`medicines like Tarceva, Gleevec®,
`Sutent® and Nexavar® which are
`reimbursed under the newer Part D
`regulations. Patients receiving oral
`medicines have higher effective
`co-payments and co-insurance obliga-
`tions to meet – despite the fact that
`these oral drugs are more convenient
`to the patient and are often substan-
`tially cheaper than the competing
`cytotoxic and biological agents that
`are administered at the doctor’s
`office by intravenous injection or infu-
`sion. This co-payment and co-insurance
`imbalance presents an even greater
`challenge in tough economic times
`when patients and their families
`struggle to make ends meet. We are
`proud of our U.S. partner Genentech’s
`‘Access Solutions’ and ‘Access to
`Care Foundation’ programs. They are
`
`among the best in the industry and
`seek to provide access to Tarceva
`patients who can’t afford their medi-
`cine. However, despite the fact that
`market analysis throughout 2008 and
`into early 2009 has shown that
`Tarceva has held its own in market
`share (and even grown share in certain
`settings), sales have inevitably been
`impacted by the downturn as a greater
`number of patients who have been
`prescribed Tarceva are failing to have
`their prescriptions filled – most likely
`due to the patients’ inability to afford
`the co-payments and co-insurance.
`
`We were pleased to announce in
`November 2008 that the large, ran-
`domized, placebo-controlled Phase III
`study, SATURN, met its primary end-
`points and showed Tarceva extended
`the time patients with advanced
`NSCLC lived without their cancer
`getting worse when Tarceva is given
`immediately following initial treatment
`with platinum-based chemotherapy
`(as defined by progression-free
`survival). We believe that Tarceva, as
`a once-a-day oral therapy, is well suited
`for first-line maintenance treatment
`for patients with advanced NSCLC.
`The data will be formally presented
`to the medical community at the
`Annual Meeting of the American
`Society of Clinical Oncology (ASCO)
`in Orlando, May 29 – June 2, 2009.
`Overall survival was one of the sec-
`
`In 2008 Tarceva global sales exceeded $1 billion,
`achieving “Blockbuster” status within 4 years of
`launch.
`
`Tarceva is approved in 94 countries for NSCLC
`and in 70 countries for pancreatic cancer.
`
`2
`
`

`

`ondary endpoints and we anticipate
`mature survival data in the second
`half of 2009.
`
`In March 2009, our regulatory team
`submitted a supplemental New Drug
`Application (sNDA) for the use of
`Tarceva as a first-line maintenance
`therapy in the treatment of NSCLC
`patients. Simultaneously, Roche filed
`an application in Europe with the
`European Medicines Agency (EMEA).
`Assuming acceptance of the U.S. filing,
`we would expect a PDUFA date in or
`about mid-January 2010 and, if Tarceva
`is successfully registered, we would
`anticipate approval and launch in the
`first quarter of 2010.
`
`Clinical data supporting the use of
`Tarceva in the NSCLC maintenance
`setting was enhanced in early 2009
`when our partner Roche announced
`that a Phase III study, ATLAS, con-
`ducted by their U.S. Genentech
`organization was stopped early on
`the recommendation of an independ-
`ent data safety monitoring board. A
`pre-planned interim analysis showed
`that combining Tarceva and Avastin®
`significantly extended the time
`NSCLC patients lived without their
`cancer getting worse, as defined by
`progression-free survival, compared
`with Avastin plus placebo following
`initial treatment with platinum-based
`chemotherapy and Avastin. In both
`
` OSI EX. 2014 - 0005
`
`these key SATURN and ATLAS studies
`preliminary safety analyses showed
`adverse events were consistent with
`previous Tarceva studies as well as
`trials evaluating Tarceva and Avastin
`together, and no new safety signals
`were observed.
`
`Unfortunately, a third major Phase III
`trial, The BeTa-Lung study, in which
`Tarceva and Avastin were compared
`to Tarceva and placebo in second-line
`NSCLC patients failed to meet its
`primary endpoint of overall survival.
`The BeTa study was noteworthy in
`that this was the first prospective,
`randomized study in which Tarceva
`was dosed to only a second-line
`NSCLC patient population, and the
`data in the Tarceva-only arm (which
`had a median survival of 9.2 months)
`were consistent with the earlier
`second-line subset findings from the
`pivotal second-/third-line NSCLC study,
`BR.21.
`
`On a more positive note, our clinical
`and regulatory teams were successful
`in executing a clinical program and
`regulatory process that resulted in
`an important label update on Tarceva
`dose modification in those NSCLC
`patients who continue to smoke.
`The Tarceva label now states that
`“Cigarette smoking has been shown
`to reduce erlotinib exposure” and
`that a “cautious increase in the dose
`
`of Tarceva, not exceeding 300mg”
`can be considered by physicians
`treating lung cancer patients who
`continue to smoke. Although the effi-
`cacy and long-term safety of a higher
`dose has not been established in a
`prospective trial for patients who con-
`tinue to smoke, the update provides
`physicians with important information
`as they consider treatment options
`for this group of patients.
`
`We continue to invest in a substantial
`ongoing life cycle plan for Tarceva
`which seeks to expand Tarceva use
`to the adjuvant setting in NSCLC
`(through an OSI conducted Phase III
`study known as RADIANT which is
`expected to complete enrollment in
`2010) and to new disease indications
`like ovarian cancer (where an EORTC
`front-line maintenance Phase III study
`is expected to read-out top-line data
`in 2010) and hepatocellular carcinoma
`(where a collaborative Phase III study
`with Bayer/Onyx investigating the use
`of Tarceva in combination with
`Nexavar is due to start imminently).
`In addition, we continue to expect
`data from the CALGB study in
`“never-smoker,” first-line NSCLC
`patients in 2009.
`
`TARCEVA INTELLECTUAL
`PROPERTY
`
`Tarceva’s success also means that it
`
`Tarceva patient, Ann Dudurich, finishes a 30-mile
`fundraiser bike ride after being diagnosed with
`Stage IV lung cancer in January 2007. Ann shared
`her inspirational story battling lung cancer with
`OSI employees in February 2009.
`
`3
`
`

`

`generics industry that is employing
`increasingly aggressive tactics toward
`innovator intellectual property (IP)
`rights around the world. We believe
`that the trend toward the erosion of
`innovator IP protection will ultimately
`undermine our industry’s willingness
`and ability to invest in the next genera-
`tion of breakthrough therapies like
`Tarceva and we are, together with
`Roche, taking proactive steps to
`defend our global IP rights surrounding
`Tarceva. These include taking legal
`action against companies producing
`a generic version of Tarceva in India
`(in the face of our issued Indian
`patent) and seeking a reissue of one
`of three Orange Book listed patents
`in the U.S. We remain confident in
`our ability to protect the unique
`inventiveness of Tarceva through its
`composition of matter patent expiry
`in 2018 (in the U.S.) and 2020 (in the
`EU and Japan).
`
`We fully anticipated that, like virtually
`all valuable innovative small molecule
`therapies today, we would receive
`notice of the filing of one or more
`Abbreviated New Drug Applications
`(ANDAs) by generic companies at the
`earliest opportunity allowed under
`the 1984 Hatch-Waxman law. Generic
`companies can file an ANDA on the
`fourth anniversary of a NDA approval
`if they claim, among other things,
`
` OSI EX. 2014 - 0006
`
`that they do not infringe the innovator
`company’s IP (a so-called paragraph
`IV filing). Both Teva and Mylan sub-
`mitted ANDAs following the fourth
`anniversary of the U.S. Tarceva
`approval in November 2004 and –
`within the 45-day period – we filed
`suit against both organizations in early
`2009. Under the regulations, this trig-
`gers a 30-month stay at the FDA and
`no action on these ANDAs is possible
`in that period while the litigation plays
`out. We are confident in our Tarceva
`IP position and fully committed to
`prevailing in these lawsuits.
`
`LOOKING BEYOND TARCEVA:
`OSI’S PIPELINE
`
`The primary opportunity for signifi-
`cant long-term value creation in the
`business resides in the progress of
`our development pipeline and in the
`validation and credibility attached to
`the underlying discovery and transla-
`tional research platforms that support
`this pipeline. In this respect we have
`made significant progress throughout
`the year where we were able to
`achieve the milestone of getting all
`four of our key development candidates
`into clinical development. We now
`have ongoing clinical programs for
`both oncology candidates (OSI-906 –
`an insulin-like growth factor-1 receptor,
`or IGF-1R inhibitor; and OSI-027 –
`our TORC1/TORC2 inhibitor) and both
`
`diabetes/obesity candidates (PSN821
`– our GPR119 agonist; and PSN602 –
`our next generation sibutramine
`competitor compound). We have
`inculcated an acute focus on the
`need for discipline in our R&D invest-
`ments and have set a high standard
`on the differentiation and novelty of
`the molecular targeted therapies that
`we advance into clinical development.
`
`We have also made considerable
`progress in building a leadership
`position in epithelial-to-mesenchymal
`transition (EMT) biology, the key area
`of research underlying our efforts in
`oncology, and in establishing neu-
`roendocrine control of body weight
`and glycemia as an analogous area of
`focus in the diabetes/obesity arena.
`In December, we were able to take
`advantage of the current economic
`downturn in acquiring an attractive
`G-protein coupled receptor technology
`platform from the Danish company
`7TM, which has considerably enhanced
`our early discovery capabilities in the
`neuroendocrine control area.
`
`OSI-906: A recent robust partial
`response in a 35 year old woman
`with advanced adrenocorticoid carci-
`noma (ACC), along with a minor
`response in a NSCLC patient and
`multiple demonstrations of long-term
`disease stabilization from the ongoing
`Phase I program, have provided
`
`An important part of our mission is to improve
`upon the available treatment options for cancer
`patients. OSI is at the forefront of a paradigm-
`shifting movement toward molecular targeted,
`better tolerated and personalized therapies.
`
`4
`
`

`

`encouraging indications of activity for
`this agent which is potentially a first-
`in-class oral inhibitor of the extensively
`targeted IGF-1R signaling axis. We
`are pursuing multiple aspects of the
`tumor biology surrounding this target
`including the potential for “onco-
`addiction” arising from over-expression
`of the IGF2 ligand in ACC and ovarian
`cancer. Our translational research
`programs have also investigated the
`phenomenon of compensatory sig-
`naling – whereby inhibition of, for
`example, the EGFR signaling pathway
`leads a tumor cell to up-regulate
`another signaling pathway such as
`IGF-1R. We believe simultaneous inhi-
`bition of tumor cell signaling through
`the EGFR, IGF-1R and insulin receptor
`pathways may provide synergistic
`benefits in the treatment of cancer
`patients whose tumors rely on this
`biology. We are planning to immedi-
`ately follow an on-going Phase I
`OSI-906/Tarceva combination trial
`with a Phase II/III program in NSCLC
`to explore this opportunity. This regis-
`trationally oriented Phase II/III program
`could begin as soon as early 2010,
`if our Phase I data support the safe
`combination of OSI-906 and Tarceva.
`
`OSI-027: We are continuing enrollment
`in our OSI-027 program and are now
`entering our third tier of dosing for
`this agent that is designed to be a
`next-generation mTOR inhibitor.
`
` OSI EX. 2014 - 0007
`
`PSN821 and PSN602: Our GPR119
`agonist, PSN821, has the potential to
`be the first orally available molecule
`which delivers both glucose control
`and weight loss, while PSN602 is
`designed to give greater weight loss
`efficacy without causing the cardio-
`vascular side-effects seen with the
`anti-obesity agent Meridia®.
`
`We recently completed the PSN821
`single dose Phase I study in type II
`diabetes patients and are moving
`forward with the follow-on 14-day
`dosing study by mid-year (this study
`will include a first look at the impact
`of PSN821 on gastric emptying).
`Presuming continued success in this
`program, we expect to initiate the
`follow-on 28-day dosing Phase IIa study
`or possibly a 3-month dosing Phase IIb
`study, early in 2010. In keeping with
`our view that we be focused on
`establishing differentiation early in
`development programs, this study will
`include a sitagliptin active comparator.
`
`On the PSN602 program, we have
`completed dosing in the 14-day Phase I
`program and have seen encouraging
`early data from key safety, tolerability
`and pharmacokinetics assessments.
`We also saw robust effects on appetite
`in standard meal tests that were
`included in this trial as preliminary
`indications of activity. We expect to
`begin the 28-day Phase IIa part of the
`
`program by mid-year. This study will
`include a sibutramine comparator,
`again aimed at delivering key differenti-
`ation data as early in the development
`program as possible.
`
`A CONFIDENT AND
`DISCIPLINED COMPANY
`WELL POSITIONED IN
`CHALLENGING TIMES
`
`Although we are genuinely excited
`about our future prospects, we are also
`conscious of our fiscal responsibilities
`to our company and our shareholders.
`Thus, while we are confident in our
`pipeline and growth strategy, we
`have committed publicly to maintain
`a disciplined assessment of the risks
`inherent in our industry and to ensure
`that, should our aspirations fall short
`of our goals over the next 2-4 years,
`we will realize the financial value
`inherent in the Tarceva and DP-IV
`franchises for our shareholders before
`these assets begin to approach the
`end of their patent life.
`
`Our industry is going through a period
`of significant consolidation. As a
`shareholder, you may believe that
`companies like OSI should be consoli-
`dated into larger corporations through
`acquisitions, or you may believe that
`those rare OSI’s of the biotech world
`have a unique window through which
`substantial growth and shareholder
`
`OSI is dedicated to turning the promise of
`innovative, targeted, personalized therapies into
`practice in the diabetes & obesity arena, two
`diseases with major unmet medical needs.
`
`5
`
`

`

` OSI EX. 2014 - 0008
`
`continued support of our stockholders;
`and, most importantly, to the physi-
`cians, patients and families from
`around the world for whom we
`constantly strive to improve their
`treatment options by innovating
`breakthrough medicines.
`
`Colin Goddard, Ph.D.
`Chief Executive Officer
`
`Robert A. Ingram
`Chairman of the Board
`
`returns can be delivered as an inde-
`pendent entity. At OSI, we see the
`goal of delivering shareholder value
`via either outcome through the same
`strategic lens. Our strategy is predi-
`cated on the belief that creating a
`powerhouse innovator company that
`really moves the cause of personalized
`medicine forward by developing
`a portfolio of novel, differentiated,
`molecular targeted therapies to the
`better benefit of patients, shareholders
`and employees alike is the best
`template from which to turn the sub-
`stantial success of OSI over the last
`decade into a period of equal success
`and value creation for our shareholders
`in the coming years.
`
`Indeed, as we embark on perhaps
`the most exciting 2-4 year growth
`period in the company’s history we
`do so with a justifiable sense of con-
`fidence in our people, our science
`and our financial strength, all of
`which is appropriately tempered with
`a sense of fiscal and strategic discipline
`that we believe makes OSI one of
`the few mid-cap biotechnology com-
`panies fully equipped to emerge from
`the current downturn as a strong and
`sustainable industry leader. In closing,
`we would like to take a moment to
`acknowledge that our past achieve-
`ments and continued success are
`predicated on the talented team of
`employees that make up OSI; the
`
`In 2008 we achieved a significant milestone
`by advancing four wholly-owned, highly
`differentiated and innovative product candidates
`into clinical development.
`
`6
`
`

`

` OSI EX. 2014 - 0009
`
`UNITED STATES SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`Form 10-K
`
`(Mark One)
`¥
`
`n
`
`ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
`OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2008
`or
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
`OF THE SECURITIES EXCHANGE ACT OF 1934
`For the transition period from
`to
`Commission file number: 0-15190
`
`OSI PHARMACEUTICALS, INC.
`
`(Exact Name of Registrant as Specified in its Charter)
`
`13-3159796
`(I.R.S. Employer Identification No.)
`
`Delaware
`(State or other Jurisdiction of
`Incorporation or Organization)
`11747
`41 Pinelawn Road, Melville, N.Y.
`(Zip Code)
`(Address of Principal Executive Offices)
`Registrant’s Telephone Number, including area code
`(631) 962-2000
`Securities Registered Pursuant to Section 12(b) of the Act:
`Title of Each Class
`Name of Each Exchange on Which Registered
`The NASDAQ Stock Market LLC
`Common Stock, par value $.01 per share
`Series SRPA Junior Participating
`Preferred Stock Purchase Rights
`Securities Registered Pursuant to Section 12(g) of the Act: None
`(Title of Class)
`No n
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¥
`Indicate by check mark if the registrant
`is not required to file reports pursuant
`to Section 13 or Section 15(d) of the
`Act. Yes n
`No ¥
`Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
`Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and
`(2) has been subject to such filing requirements for the past 90 days. Yes ¥
`No n
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
`contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated
`by reference in Part III of this Form 10-K or any amendment to this Form 10-K. n
`Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
`reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
`Exchange Act. (Check one):
`Large accelerated filer ¥
`
`Accelerated filer n
`
`Non-accelerated filer n
`(Do not check if a smaller reporting
`company)
`No ¥
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes n
`As of June 30, 2008, the aggregate market value of the Registrant’s voting stock held by non-affiliates was $1,372,090,100. For purposes of this
`calculation, shares of common stock held by directors, officers and stockholders whose ownership exceeds five percent of the common stock
`outstanding at June 30, 2008 were excluded. Exclusion of shares held by any person should not be construed to indicate that the person possesses the
`power, direct or indirect, to direct or cause the direction of the management or policies of the Registrant, or that the person is controlled by or under
`common control with the Registrant.
`As of February 20, 2009, there were 57,920,762 shares of the Registrant’s common stock, par value $.01 per share, outstanding.
`
`Smaller reporting company n
`
`DOCUMENTS INCORPORATED BY REFERENCE
`Portions of the Registrant’s definitive proxy statement for its 2009 annual meeting of stockholders are incorporated by reference into
`Part III of this Form 10-K.
`On the following pages, we have reproduced the first nine items of our annual report on the Form 10-K filed with the Securities and
`Exchange Commission on February 27, 2009. The Form 10-K has not been approved by the Securities and Exchange Commission, nor has
`the Commission passed upon the accuracy or adequacy of the data included therein. A copy of the complete Form 10-K, with exhibits, as
`filed with the Securities and Exchange Commission may be obtained without charge by writing to: Kathy Galante, Senior Director,
`Investor and Public Relations, OSI Pharmaceuticals, Inc., 41 Pinelawn Road, Melville, New York 11747.
`
`

`

` OSI EX. 2014 - 0010
`
`In this Form 10-K, “OSI,” “the Company,” “we,” “us,” and “our” refer to OSI Pharmaceuticals, Inc. and
`subsidiaries. “(OSI) Eyetech” refers to Oldtech, Inc. (formerly, (OSI) Eyetech, Inc.), our wholly-owned subsidiary.
`
`We own or have rights to various copyrights, trademarks and trade names used in our business including
`Tarceva» (erlotinib) and Novantrone» (mitoxantrone for injection concentrate). This Form 10-K also includes other
`trademarks, service marks and trade names of other companies.
`
`ii
`
`

`

` OSI EX. 2014 - 0011
`
`PART I
`
`ITEM 1. BUSINESS
`
`We are a profitable biotechnology company committed to building a scientifically strong and financially
`successful top tier biopharmaceutical organization that discovers, develops and commercializes innovative
`molecular targeted therapies, or MTTs, addressing major unmet medical needs in oncology, diabetes and obesity.
`Our strategic focus is in the area of personalized medicine. We are building upon the knowledge and insights from
`our flagship product, Tarceva, in order to establish a leadership role in turning the promise of personalized medicine
`into practice in oncology and in pioneering the adoption of personalized medicine approaches in diabetes and
`obesity. We are leveraging our targeted therapy expertise in drug discovery, development and translational research
`to deliver innovative, differentiated new medicines to the right patients, in the right combinations and at the right
`doses. We believe this approach optimally positions us to accomplish more rapid and cost-effective drug
`development aimed at providing substantial clinical benefit to the patients who can gain the most from our
`innovations. We further believe that, with increasing healthcare cost constraints and competition, leadership in
`personalized medicine approaches will define the successful biopharmaceutical companies of the future.
`
`Our largest area of focus is oncology where our business is anchored by Tarceva, a small molecule inhibitor of
`the epidermal growth factor receptor, or EGFR, which is our primary source of revenues. In November 2004,
`Tarceva was approved by the U.S. Food and Drug Administration, or FDA, for the treatment of advanced non-small
`cell lung cancer, or NSCLC, in patients who have failed at least one prior chemotherapy regimen and, subsequently,
`in November 2005, for the treatment of patients with locally advanced and metastatic pancreatic cancer in
`combination with the chemotherapy agent, gemcitabine. Tarceva was also approved for sale in the European Union,
`or EU, for the treatment of advanced NSCLC in September 2005 and, in January 2007, as a first-line therapy for
`metastatic pancreatic cancer in combination with gemcitabine. In October 2007, Tarceva was approved in Japan for
`the treatment of patients with nonresectable, recurrent and advanced NSCLC which is aggravated following
`therapy, and launched in Japan at the end of 2007. Tarceva, which as of January 2009, was approved for sale in 94
`countries for advanced NSCLC after failure of chemotherapy and 70 countries for pancreatic cancer, achieved
`global sales of over $1.1 billion for 2008. We co-promote Tarceva in the United States with Genentech, Inc., where
`we share profits equally, and receive royalties on sales outside of the United States from our international
`collaborator, Roche.
`
`Prosidion Limited, our U.K. subsidiary which conducts our research and development programs in diabetes
`and obesity, contributes an important second source of revenues through the licensing of our patent estate relating to
`the use of dipeptidyl peptidase IV, or DPIV, inhibitors for the treatment of type II diabetes and related indications.
`As of February 15, 2009,