51512016
`
`wwmmngammtfiwmmamk&WQ$£ZUnw£Um3&mDflut
`
`—————BEGIN PRIVACY-ENHANCED MESSAGE--—--
`
`Proc-Type: 2001,MIC-CLEAR
`0riginator—Name: webmaster@www.sec.gov
`Originator-Key-Asymmetric:
`MFgwCgYEVQgBAQICAF8D5gAwRw]Aw25NKK9AVtBzYZmr6aGjlwyK3XmZv3dTINen
`TwSM7vPzLADbmYQaionwg5sDw3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
`MIC-Info: RSA-MD5,RSA,
`GGLeiRkPiq0m+e0tnKxZ7T40u1YKSmLMdPjsV4g+PXPBn9dneRA6pMaa/wwt3jwp
`w7F8avzKfm7r4udOGEATc ==
`
`<SEC-DOCUMENT>0000950123-98-010826.txt
`
`: 19981228
`19981228
`(SEC-HEADER>0000950123-98-010826.hdr.sgm1 :
`ACCESSION NUMBER:
`00009501
`23-98-010326
`CONFORMED SUBMISSION TYPE:
`10-K
`PUBLIC DOCUMENT COUNT:
`CONFORMED PERIOD OF REPORT:
`FILED AS OF DATE:
`
`4 1
`
`9980930
`19981223
`
`FILER:
`
`COMPANY DATA:
`COMPANY CONFORMED NAME:
`CENTRAL INDEX KEY:
`STANDARD INDUSTRIAL CLASSIFICATION:
`
`OSI PHARMACEUTICALS INC
`0000729922
`IN VITRO & IN VIVO DIAGNOSTIC
`
`SUBSTANCES [2835]
`IRS NUMBER:
`STATE OF INCORPORATION:
`FISCAL YEAR END:
`
`133159796
`DE
`0930
`
`FILING VALUES:
`FORM TYPE:
`SEC ACT:
`SEC FILE NUMBER:
`FILM NUMBER:
`
`BUSINESS ADDRESS:
`STREET 1:
`CITY:
`STATE:
`ZIP:
`BUSINESS PHONE:
`
`MAIL ADDRESS:
`STREET 1:
`CITY:
`STATE:
`ZIP:
`
`10-K
`
`000-15190
`98774136
`
`106 CHARLES LINDBERGH BLVD
`UNIONDALE
`NY
`11553
`5162220023
`
`106 CHARLES LINDBERGH BLVD
`UNIONDALE
`NY
`11553-3649
`
`FORMER COMPANY:
`FORMER CONFORMED NAME:
`DATE OF NAME CHANGE:
`
`ONCOGENE SCIENCE INC
`19920703
`
`(/SEC-HEADER)
`<DOCUMENT>
`<TYPE>10-K
`
`<SEQUENCE>1
`<DESCRIPTION>OSI PHARMACEUTICALS,
`<TEXT>
`
`INC.
`
`<PAGE>
`
`1
`
`h1:tp:Ilwww.sac.gDvIArchivasIsdgarldataI729922ICD009501 23-98-010826.txt
`
`1lT9
`
`APOTEX EX. 1011-001
`
`

`
`SEEOM
`
`www5auwwNtHwfihamhmflZ¥EZUDG§UE3&mOflkt
`
`FORM 18-K
`SECURITIES AND EXCHANGE COMMISSION
`
`WASHINGTON, D.C. 29549
`
`(MARK ONE)
`[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
`OF 1934
`
`FOR THE FISCAL YEAR ENDED SEPTEMBER 36, 1998
`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 O-15190
`
`INC.
`OSI PHARMACEUTICALS,
`(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
`
`<TABLE>
`<5)
`
`(C)
`
`DELAWARE
`
`(STATE OR OTHER JURISDICTION OF
`INCORPORATION OR ORGANIZATION)
`
`106 CHARLES LINDBERGH BLVD., UNIONDALE, N.Y.
`(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
`</TABLE>
`
`13-3159796
`
`(I.R.5. EMPLOYER
`IDENTIFICATION NO.)
`
`11553
`(ZIP CODE)
`
`REGISTRANT'S TELEPHONE NUMBER,
`
`INCLUDING AREA CODE:
`
`(516) 222-9023
`
`SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
`
`<TABLE>
`(S)
`
`</TABLE>
`
`TITLE OF EACH CLASS
`
`NAME OF EACH EXCHANGE ON WHICH REGISTERED
`
`(C)
`
`NONE
`
`NONE
`
`SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
`
`common srocx, PAR VALUE $.91 PER SHARE
`(TITLE OF cLAss)
`
`Indicate by check mark whether the Registrant (1) has filed all reports
`required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
`1934 during the preceding 12 months (or for such shorter period that the
`Registrant was required to file such reports), and (2) has been subject to such
`filing requirements For the past 98 days. Yes [X]
`No [
`]
`
`Indicate by check mark if disclosure of delinquent filers pursuant to Item
`465 of Regulation S-K is not contained herein, and will not be contained,
`to the
`best of Registrant's knowledge,
`in definitive proxy or information statements
`
`MmflwwwsflwpwktmwmqfimhhflflflfiflGHMZ$§&mDEfibd
`
`2H9
`
`APOTEX EX. 1011-002
`
`

`
`5l5f2016
`
`www.sec.govlArcHvesledgarldataiT299ZJ000095D123-93-01D826.bd
`
`incorporated by reference in Part III of this Form 16-K or any amendment to this
`Form 19-K.
`[
`]
`
`the aggregate market value of the Registrant's
`As of November 38, 1998,
`voting stock held by non-affiliates was $58,502,216. 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 November
`30, 1998 were excluded. Exclusion of shares held by any person should not be
`construed to indicate that such person possesses the power, direct or indirect,
`to direct or cause the direction of the management or policies of the
`Registrant, or that such person is controlled by or under common control with
`the Registrant.
`
`there were 22,368,833 shares of the Registrant's
`As of November 39, 1998,
`Common Stock, par value $.01 per share, outstanding.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`
`Portions of the Registrant's definitive proxy statement for its 1999 annual
`meeting of stockholders are incorporated by reference into Part III of this Form
`16-K.
`
`ITEM 1.
`
`BUSINESS
`
`PART I
`
`("0SI" or the “Company“) discovers and develops
`OSI Pharmaceuticals, Inc.
`novel, small—molecule pharmaceutical products for commercialization by the
`pharmaceutical industry. The Company has innovated, assembled, and reduced to
`practice a constellation of drug discovery and development technologies and
`other assets that enable it to conduct the full range of drug discovery and
`early development activities,
`from the identification of an attractive
`biological target for drug discovery to the development of a drug candidate in
`human clinical efficacy studies. These capabilities provide OSI with a sound
`base from which to grow and a variety of commercialization opportunities that
`can be used to fuel growth.
`
`The Company conducts its drug discovery and development programs
`independently and through funded collaborations with major pharmaceutical
`companies. The Company's major corporate partners include Pfizer Inc.
`("Pfizer"), The Bayer Corporation ("Bayer"), Sankyo Company, Ltd.
`("Sankyo") and
`Hoechst Marion Roussel, Inc.
`("HMRI"). Independently and in collaboration with
`its various partners,
`the Company is involved in the discovery and development
`of drugs for 38 targets. These drug discovery efforts are primarily focused in
`the areas of cancer, cosmeceuticals, anti-infectives and diabetes. The Company's
`research and development capabilities together with its ongoing discovery and
`development programs have positioned it as a leader in the field of drug
`discovery and development. The Company was incorporated in 1983. Its NASDAQ
`stock symbol is OSIP.
`
`BACKGROUND
`
`Historically, drug discovery has been an expensive process of attrition.
`the pharmaceutical industry, only about 1-in-16 research and development
`programs involving compounds screened against specific targets actually results
`in a successful drug. On average, it costs more than $366 million in research
`and development (including failures) to bring a drug from initial lead
`
`In
`
`h11p:Ilwww.sac.govIArchivasI6dgarIdataI729922ICDO0950123-98-01D826.txt
`
`3'79
`
`APOTEX EX. 1011-003
`
`

`
`aazme
`
`uwnmsasgwwvcwveaamammmwnsoeaumnoamzseoo1musbd
`
`identification to market.
`
`the rising cost of health care and changes in health care
`During the 19995,
`management policies have fundamentally altered the pharmaceutical landscape,
`putting increasing competitive pressure on the pharmaceutical industry. This has
`resulted in a series of major pharmaceutical company mergers, as organizations
`strive to enhance market share and improve profit margins.
`
`these new pressures have led to a growing emphasis on
`At the same time,
`product pipeline enhancement through the cost-effective discovery and
`development of novel classes of pharmaceuticals that will meet large, unmet
`medical needs, can more rapidly be brought to the marketplace, and have the
`potential to command premium prices. Advances in molecular biology, automation,
`and computing and the understanding of the human genome have revolutionized the
`ways in which drug discovery is conducted, creating the potential for
`accelerated discovery and development of new generations of drugs.
`
`Pharmaceutical companies have typically formed collaborations with
`biotechnology companies in order to access these types of technologies in
`pursuit of novel drug development. OSI believes that the competitive pressures
`described above have caused pharmaceutical companies to greatly reduce the
`royalty rates they are willing to pay to biotechnology companies for
`technological contributions to their product development efforts. on the other
`hand,
`the Company believes that such pressures are making pharmaceutical
`companies more willing to pay premiums for high quality drug candidates that
`have already undergone some degree of optimization and clinical development.
`
`STRATEGY
`
`0SI's mission is the discovery and early development of novel
`pharmaceutical products that improve the human condition. The Company's strategy
`is to build and sustain a pipeline of pharmaceutical product
`
`(PAGE)
`
`3
`
`1
`
`opportunities for commercialization by its pharmaceutical company partners. The
`Company's plan for accomplishing its mission and strategy consists of the
`following elements:
`
`Exploit Full Range of Discovery and Early Development Capabilities. OSI
`has built a fully integrated drug discovery technology platform. This platform
`includes every major aspect of drug discovery and development,
`from the
`identification of a validated drug discovery target to the emergence of a drug
`candidate. The integrated management of these technologies is designed to
`accelerate the process of identifying and optimizing high quality, small
`molecule drug candidates for clinical development and then to progress such
`candidates through Phase II clinical trials. OSI believes it will be able to
`rapidly and effectively deliver high quality drug candidates in early Phase II
`clinical trials and that this will position the Company to recognize enhanced
`payments, milestones, royalties, and success fees on OSI funded discovery
`programs. The Company seeks to achieve risk diversification as well as breadth
`and depth in its product pipeline through fully funded, royalty bearing,
`discovery alliances with major pharmaceutical company partners.
`
`In order to more rapidly
`Focus Resources on Selected Disease Areas.
`progress product development opportunities to a clinical stage,
`the Company
`intends to focus its growing resources and energies on a smaller number of
`targets in fewer disease areas to provide the critical mass and disease area
`expertise to effectively move these programs forward. The Company has begun to
`focus primarily on the areas of cancer, cosmeceuticals, anti-infectives and
`
`h11p:Ilwww.sac.govIArchivaeI6dgarIdataI729922ICDO0950123-98-01D826.txt
`
`4IT9
`
`APOTEX EX. 1011-004
`
`

`
`5l5f2016
`
`www.sec.govlArclivesledgarldatai7299ZJ000095D123-93-01D826.bct
`
`diabetes. OSI has major collaborations in cancer and cosmeceuticals. The Company
`has terminated its existing co-ventures in the area of anti-infectives and plans
`to pursue discovery and early development in this area and selected cancer
`targets as proprietary programs. Generally,
`the Company's objectives with
`respect to its proprietary programs are to identify lead compounds, advance them
`through pre-clinical development, and manage clinical development through early
`stage clinical trials. If such efforts are successful,
`the Company expects to
`partner with pharmaceutical companies for clinical and commercial development of
`these proprietary products. with respect to the diabetes program, the Company is
`currently seeking a funding partner.
`
`Commercialize Certain Technology Assets. OSI is seeking to generate a
`revenue stream by licensing pharmaceutical and biotechnology companies to
`practice under its gene transcription patent estate. For example,
`in May 1998
`OSI and Aurora Biosciences Corp.
`("Aurora") entered into a license agreement
`covering 0SI‘s gene transcription patent estate. Under the terms of the
`agreement, OSI received Aurora common stock and cash for Aurora's non-exclusive
`license and certain sub-licensing rights to 0SI‘s Methods of Modulation patent,
`for which the U.S. Patent office has issued claims. OSI will also receive
`
`revenues from any sub-licenses granted by Aurora to its pharmaceutical partners
`to develop small molecule gene transcription modulators encompassed by the
`Methods of Modulation claims. The Company is currently in discussions with
`several other parties concerning licenses to its gene transcription patent
`estate. Additionally, under its collaborative agreement with Bayer for the
`development of serum—based diagnostic products,
`the Company has retained rights
`to sell certain types of these products. The Company,
`through its wholly owned
`subsidiary, Oncogene Science Diagnostics, Inc.
`("OSDI"), is actively selling
`cancer diagnostic tests to the clinical research market and has initiated plans
`to expand sales of these products in this market.
`
`PRODUCT DEVELOPMENT AND RESEARCH PROGRAMS
`
`OSI utilizes its broad—based drug discovery capability in multiple drug
`discovery programs encompassing a variety of major human diseases. The Company's
`major areas of focus in research and development
`("RED") are as follows:
`
`Cancer
`
`During the 19805, cancer researchers developed a sophisticated
`understanding of the role played by certain genes in the transformation of
`normal cells into a cancerous state, and thus were able to identify novel
`targets for drug intervention. As the decade of the 19965 comes to a close, this
`new knowledge of the molecular basis of cancer has started to move from the
`laboratory into the clinical arena, promising new hope for patients with many
`types of cancers,
`including breast, colon, head and neck, and ovarian.
`In the
`next decade, novel anticancer therapies and diagnostic tools are expected to be
`commercialized, creating a new
`
`(PAGE)
`
`4
`
`paradigm for cancer treatment, with the potential that cancer can either be
`cured or managed safely over the long term. OSI,
`through its pharmaceutical
`collaboration with Pfizer and diagnostic alliances with Bayer and Fujirebio,
`Inc. (“Fujirebio"), is positioned at the forefront of this unfolding revolution
`in the diagnosis and treatment of cancer.
`
`with its collaborative partner Pfizer, OSI has focused since 1986 on the
`discovery and development of novel classes of orally active, molecularly
`targeted, small molecule anticancer drugs based on oncogenes and tumor
`suppressor genes and the fundamental mechanisms underlying tumor growth. The
`
`h11p:Ilwww.sac.guvIArchivasI6dgarIdataI729922ICDO0950123-98-01D826.txt
`
`H79
`
`APOTEX EX. 1011-005
`
`

`
`5l5f2016
`
`www.sec.govlArcHvesledgarldataiT299ZJ000095D123-93-01D826.bd
`
`first of these programs to yield a clinical candidate, CP-358,774, which targets
`a variety of cancers including ovarian, pancreatic, non-small cell lung and head
`and neck, achieved a significant milestone with the completion of Phase I safety
`trials and the initiation of Phase II clinical trials in the United States in
`
`cancer patients. CP-358,774 is a potent, selective and orally active inhibitor
`of the epidermal growth factor receptor, a key oncogene in these cancers.
`In
`addition,
`two other compounds, CP—564,959 and CP-669,754, have been identified
`and are in advanced stages of pre-clinical development. Nine other targets are
`in active R&D at OSI. CP-564,959 is being developed as an orally available,
`potent and selective inhibitor of a key protein tyrosine kinase receptor
`involved in blood vessel growth or angiogenesis. Angiogenesis is induced by
`solid tumors which require nutrients that will enable growth. The Company
`believes that the ability to safely and effectively inhibit this process
`represents one of the most exciting areas of cancer drug development. CP—669,754
`is an orally active inhibitor of the ras oncogene, which is another important
`target involved in many major tumors including colon and bladder. The types of
`novel anticancer drugs being developed in the OSI/Pfizer collaboration are
`expected to be safer and more effective than standard chemotherapeutic agents.
`
`In addition to its cancer therapeutics programs, OSI is also a leader in
`the development of novel cancer diagnostic products based on oncogenes,
`tumor
`suppressor genes, and other gene targets whose proteins are directly involved in
`tumor growth or metastasis. These new diagnostic products are expected to help
`guide oncologists in the confirmation, monitoring, staging, screening or
`prognosis of cancer and may enable reference labs and physicians to select more
`effective types of treatment,
`to more easily monitor patients during therapy, or
`to diagnose cancer at an earlier stage.
`
`Through OSDI, the Company is launching its HER-2/neu serum based diagnostic
`product. The OSDI tests are currently being sold directly by OSDI into the
`clinical research market. Through the partnership with Bayer, the HER-2/neu
`immunoassay is being formatted on the Bayer Immuno-1 automated clinical
`analyzer. The Company expects that in 1999 Bayer and OSDI will seek Food and
`Drug Administration ("FDA") approval for both the automated and manual HER-2/neu
`serum test.
`
`In addition to its HER-2/neu diagnostic product, OSDI is in advanced
`development of a test to quantitate complexed Prostate Specific Antigen
`("c-PSA") in serum. The Company believes the measurement of c-PSA represents a
`significant advancement over current PSA tests. Current clinical tests measure
`total PSA, free PSA or the free-to-total PSA ratio. The Company's collaborative
`studies with Bayer have demonstrated the improved specificity of the c-PSA
`assay. The c-PSA assay is a direct measure of the amount of c—PSA present in the
`serum. c-PSA is the component of serum PSA that increases with the progression
`of prostate cancer. These new assays will provide oncologists with essential
`information necessary to determine which patients will respond best to the newly
`developed therapies directed at oncogenes and tumor suppressor genes.
`
`Cosmeceuticals
`
`Every year, consumers in the United States, Europe, and Asia spend billions
`of dollars on cosmetic products and services that promise to provide a youthful,
`healthy, or culturally desirable appearance. some of these products are marketed
`on the basis of ostensible pharmaceutical effects, such as the reduction of skin
`wrinkles and pigmentation or the promotion of hair growth. The Company believes
`that most of these products are not optimally effective and may have undesirable
`side effects.
`
`In 1996, OSI entered into a joint venture with Pfizer (the majority owner)
`and New York University (“NYU")
`in Anaderm Research Corp.
`("Anaderm"), a virtual
`company dedicated to the application of modern tools to the discovery and
`
`h11p:Ilwww.sac.govIArchivasI6dgarIdataI729922ICDO0950123-98-01D826.txt
`
`6'79
`
`APOTEX EX. 1011-006
`
`

`
`5l5f2016
`
`www.sec.govIArclivesledgarldatai7299ZJ000095D123-93-01D826.bct
`
`development of safe, effective, pharmacologically active agents for certain
`3
`
`<PAGE>
`
`5
`
`cosmetic and quality-of-life indications, such as skin pigmentation, hair loss
`and wrinkling. This program has made significant progress, with certain
`compounds in the skin pigmentation program already in advanced pre-clinical
`development.
`
`To date, all of the targets encompassed in the Anaderm program are in
`active R&D, and the program is undergoing expansion in R&D activities. OSI,
`which owns a minority equity stake in Anaderm, provides most of the discovery
`and early development capabilities for the programs, which are fully funded by
`Anaderm. The Company believes that its participation in Anaderm represents a
`major validation of its drug discovery and development capabilities.
`
`Anti—infectives
`
`the overuse and misuse of antibiotics has resulted in the
`During the 19995,
`emergence of antibiotic-resistant microorganisms that represent a growing health
`care threat. Already, many of the most effective and widely prescribed
`antibiotic drugs used to treat common infections have been rendered useless for
`certain drug resistant infections. within the health care and pharmaceutical
`industries,
`there is a renewed sense of urgency to develop and commercialize
`novel drugs for the effective treatment of many viral and fungal diseases,
`markets which represent billions of dollars in annual sales.
`
`During 1996 and 1997, OSI entered into co-venture arrangements with Biochem
`Pharma (International) Inc.
`("Biochem Pharma") in anti-virals and Sepracor, Inc.
`("Sepracor") in anti—bacterials. Both ventures were successful in seeding core
`drug discovery capabilities in anti—infectives that were of mutual benefit to
`both OSI and its co-venture partners. Both programs were also successful in
`discovering early leads. During 1998, the Company made the decision that it
`could most effectively capitalize on its integrated drug discovery platform by
`seeking sole management of its proprietary (OSI funded) discovery programs as
`opposed to co-venture agreements. In March 1998, an agreement was reached with
`Sepracor to terminate the OSI/Sepracor co-venture. OSI will receive royalties on
`the successful development of products arising from the co-venture. The Company
`expects the OSI/Biochem Pharma co-venture to be terminated in the near future.
`
`During 1998, anti—infectives became the major lead-seeking effort for 0SI's
`proprietary drug discovery program. The Company believes that anti—infectives
`are an area well suited for drug discovery at OSI. The discovery and development
`pathways involved in anti—infectives have well defined end points and relatively
`short timelines for pre-clinical and clinical development.
`In addition,
`the
`Company believes its natural products fungal library is a unique source for
`novel anti—bacterial and anti—fungal agents.
`In an effort to focus the Company's
`resources in the anti—infectives area, a number of anti—infectives targets,
`including Methicillin Resistant Staphylococcus Aureas (“MRSA“), will be pursued
`by OSI for its own account using its own R&D resources.
`
`(PAGE)
`
`6
`
`4
`
`TABLE I.
`
`CURRENT PRODUCT DEVELOPMENT AND RESEARCH PROGRAMS
`
`The following table summarizes 0SI's current product development and
`research programs as of December 1, 1998. The table is qualified in its entirety
`by reference to the more detailed descriptions elsewhere in this report.
`
`<TABLE>
`
`h11p:llwww.sac.guvIArchivasIadgarIdataI729922ICD00950123-98-01D826.txt
`
`TIT9
`
`APOTEX EX. 1011-007
`
`

`
`5l5f2016
`
`<CAPTION>
`
`CLINICAL
`
`PHASE
`
`PHASE
`
`I(D)
`
`DISEASE FIELD
`II(E)
`
`www.sec.govlArcHvesledgarldataiT299ZJ000095D123-93-01D826.bct
`
`PRE-CLINICAL
`
`DRUG
`
`NUMBER
`
`LEAD
`
`LEAD
`
`—
`
`DISCOVERY
`
`OF
`
`LEAD
`
`0PTIMI-
`
`DEVELOP-
`
`PROGRAM
`
`TARGETS
`
`sEEKING(A)
`
`zATIoN(B)
`
`MENT(c)
`
`<C>
`
`<C>
`
`<c>
`
`<C>
`
`<c>
`
`TOTAL . . . . . . . . . . . . . .
`6
`1
`
`.
`
`. . . . . . . . . . . ..
`
`</TABLE>
`
`(a) For most of the Company's programs in the “Lead Seeking" phase, the target
`proteins are either undergoing high throughput screening or lead compounds
`identified in these screens are being evaluated. Multiple lead compounds may
`exist for any target protein. These lead compounds may be at different
`stages of development, as indicated in the table above.
`
`(b) In the "Lead Optimization" phase, the Company or its collaborative partners
`optimize lead compounds and conduct laboratory pharmacology and exploratory
`toxicology testing.
`
`the Company or its collaborators conduct
`(c) In the "Lead Development“ phase,
`formal pre—clinical toxicology testing on a development candidate and
`prepare a regulatory dossier.
`
`(d) "Phase I" clinical trials consist of small scale safety trials typically in
`healthy human volunteers.
`
`(e) "Phase II“ clinical trials entail testing of compounds in humans for safety
`and efficacy in a limited patient population.
`
`0SI'S TECHNOLOGY PLATFORM
`
`OSI‘s technology platform constitutes an integrated set of drug discovery
`technologies covering every aspect of pre—clinical drug development. This
`platform includes a variety of cell-free and live-cell assays, high throughput
`
`h1:tp:Ilwww.sac.govIArchivasI6dgarIdataI729922ICDO0950123-98-01D826.b(t
`
`8'79
`
`APOTEX EX. 1011-008
`
`. . . . . . . . . . . ..
`
`PFIZER
`
`13
`
`. . . . . . . . . . . ..
`
`ANADERM
`
`. . . . . . . . . . . ..
`. . . . . . . . . . . ..
`. . . . . . . . . . . ..
`
`SANKYO
`OSI
`OSI
`
`. . . . . . . . . . . ..
`. . . . . . . . . . . ..
`. . . . . . . . . . . ..
`. . . . . . . . . . . ..
`. . . . . . . . . . . ..
`
`NOVARTIS
`HMRI
`HELICON
`OSI
`OSI
`
`6
`
`3
`
`4
`1
`1
`
`8
`1
`
`1
`
`25
`
`4
`
`1
`
`2
`
`1
`
`8
`
`2
`
`1
`
`1
`
`4
`
`5
`
`4
`1
`1
`
`1
`16
`1
`1
`1
`
`38
`
`.
`
`.
`
`.
`.
`.
`
`.
`.
`.
`.
`.
`
`<s>
`<C>
`<c>
`CANCER . . . . . . . . . . . . .
`
`1 C
`
`OSMECEUTICALS . . . . .
`ANTI-INFECTIVES:
`INFLUENZA . . . . . . . .
`HIV . . . . . . . . . . . . . .
`MRSA . . . . . . . . . . . . .
`OTHER:
`TGF—BETA 3 . . . . . . .
`VARIOUS DISEASES .
`LONG TERM MEMORY .
`SICKLE CELL . . . . . .
`DIABETES . . . . . . . . .
`
`

`
`51512016
`
`www.sec.govlArcHvesledgarldataiT299ZJ000095D123-96-01D826.bd
`
`robotic screening, diverse compound libraries and combinatorial, medicinal and
`natural products chemistry capabilities, together with significant pre-clinical
`expertise in pharmaceutics, pharmacokinetics and molecular biology. The
`Company's technologies are designed to accelerate the process of identifying and
`optimizing high quality, small molecule drug Candidates for clinical
`development. The Company pioneered the development of (i) genetically engineered
`live—cell assays targeting gene transcription and (ii) robotic high throughput
`screening. The Company has,
`through acquisition and internal technology
`development, added extensively to these core capabilities. The addition of large
`diverse libraries of small molecules and a broadened expertise in assay biology
`and medicinal, combinatorial and pharmaceutical chemistry capabilities have
`created a comprehensive drug discovery platform enabling the Company to progress
`leads discovered against novel targets all the way through the discovery and
`pre—clinical development stages. The Company's technology platform is widely
`applicable to the identification and optimization of small molecule drug
`candidates to treat many different diseases. Utilizing its technology platform,
`the Company has been able to
`
`<PAGE>
`
`7
`
`identify and optimize lead compounds that are potent and selective, possess
`minimal or no cellular toxicity, have activity in live—cells and animal models,
`and have progressed to clinical trials in humans.
`
`Assay Biology
`
`The Company has specialized in the development of drug screens that utilize
`genetically engineered human cells to identify compounds that affect
`transcription of target genes. These assay systems, which employ reporter gene
`technology, can be utilized to discover drugs that affect the expression of
`proteins encoded by the target genes. There are multiple sites within a cell
`where a drug can act to exert a specific effect. This broadly enabling
`technology allows the Company to discover compounds that exert their effects on
`receptors, signal transduction proteins, transcription factors and other sites.
`The Company's seminal contribution to the development of this technology was
`recognized by the issuance of U.S. Patent No. 5,665,543 in September 1997, which
`claims a method of identifying compounds that specifically modulate expression
`of target genes using cells engineered to include reporter genes, and U.S.
`Patent No. 5,776,562, which covers the use of small molecules to modulate gene
`transcription in vivo. This technology is used in the biotechnology and
`pharmaceutical industry, and the Company believes that the claims covered by
`this patent estate can be licensed for certain monetary and technology
`considerations. Over the last several years the Company broadened its assay
`expertise extensively. Currently,
`the Company is able to conduct screens on a
`wide variety of different assay platforms,
`including enzyme assays,
`immunoassays, scintillation proximity assays, protein—protein interaction assays
`and receptor-ligand screens. The Company believes this breadth of expertise
`enables it to select the most appropriate assay with which to pursue drug
`discovery against a novel biological target.
`
`High Throughput Robotic Screening
`
`OSI has been a pioneer and remains a leader in high throughput screening.
`The Company has developed software and automation that enable it to manage large
`compound libraries and prepare test substances for screening. The Company has
`developed proprietary hardware and software systems to automate the entire drug
`screening process, from the addition of the test substances to assay systems to
`the analysis of the data generated from the tests.
`In its proprietary robotic
`screening facility, the Company can analyze up to 366,666 different test samples
`each week, depending on the complexity of the assays. The Company's robotic
`
`h11p:Ilwww.sac.govIArchivasI6dgarIdataI729922ICDO0950123-98-01D826.txt
`
`9'79
`
`APOTEX EX. 1011-009
`
`

`
`5512016
`
`www.sac.govlArcHvesledgarldataiT299ZJ000095D123-96-01D826.bd
`
`systems are not limited to any particular assay format and can be rapidly
`reconfigured to run a wide variety of assays.
`
`Diverse Compound Libraries
`
`Access to large libraries of diverse, small molecule compounds is a key
`asset in the Company's drug discovery efforts. Leads discovered from these
`libraries become the proprietary starting materials from which drugs are
`optimized. The Company manages over 1.5 million compounds in its compound
`libraries facility from its own and several of its partners‘ compound libraries
`for high throughput screening. The Company's proprietary libraries include its
`natural products library derived from its unique collection of over 76,666
`fungal organisms, its focused libraries of small molecule compounds derived from
`its high—speed combinatorial analoging, and The Dow Chemical Company's ("Dow")
`library of approximately 146,666 small-molecule compounds.
`In March 1997,
`the
`Company acquired from Dow an exclusive worldwide license to this library for the
`purposes of discovery and development of small molecular weight pharmaceuticals
`and cosmeceuticals. The duration of this license is coextensive with the life of
`
`the last to expire of the patents related to the licensed compounds (or 26 years
`if no patents are filed).
`In exchange for these rights,
`the Company issued to
`Dow 352,162 shares of its common stock, $.61 par value (“Common Stock“). The
`Company will also pay royalties to Dow from sales of products derived from a
`small subset of Dow's compound library that is covered by existing Dow patents
`or proprietary technology.
`In addition, certain collaborative partners have made
`their compound libraries available for additional research by the Company
`outside of their existing collaborative programs. For any compound from the
`Company's collaborative partners‘ libraries that emerges as a lead in a
`proprietary program,
`the partner typically will have the right of first refusal
`to develop the compound or terminate its further development or to allow the
`Company to commercialize the compound independently or with a third party in
`exchange for royalty payments from the Company on product sales.
`
`(PAGE)
`
`8
`
`Natural Products Discovery
`
`6
`
`The Company has an extensive program to discover novel and active natural
`product compounds found in fungal fermentation extracts. Fungi are a known
`source of pharmaceuticals,
`including penicillin, cephalosporin,
`lovastatin,
`prevastatin and cyclosporin A. Through its MYCOsearch, Inc. subsidiary
`(“MYCOsearch"), the Company owns a unique and diverse collection of
`approximately 76,666 fungal organisms.
`In the MYCOsearch Natural Products
`Discovery Center in North Carolina,
`the Company has implemented automated
`microfermentation technology through which it has generated approximately
`116,666 extracts for high throughput screening. This operation is expected to
`add between 56,606 and 166,666 new extracts to the Company's natural products
`library annually. The Company has invested substantial resources in implementing
`a fully integrated fermentation biology and natural products chemistry
`capability to provide the infrastructure and expertise necessary to isolate and
`identify active natural product compounds that may be present in fungal
`abstracts.
`
`Chemistry and Lead Optimization
`
`The pharmaceutical properties of a lead compound must be optimized before
`clinical development of that compound begins.
`In 1996 the Company acquired Aston
`Molecules Ltd.
`("Aston"), a private British company with expertise in medicinal
`and combinatorial chemistry and pharmaceutical development, which are critical
`elements in the lead optimization and development process. The Company's Aston
`subsidiary has expertise in pharmacokinetics and pharmaceutical chemistry and
`
`h11p:Ilwww.sac.guvlArchivasIsdgarIdataI729922ICDO0950123-98-01D826.txt
`
`1039
`
`APOTEX EX. 1011-010
`
`

`
`5l5f2016
`
`www.sec.govlArcHvesledgarldataiT299ZJ000095D123-93-01D826.bct
`
`the management and generation of Good Manufacturing Practices ("GMP“) accredited
`data required for regulatory dossier submissions to agencies such as the FDA.
`Thus,
`the Company is able to support the development of a drug candidate for
`clinical testing. The Company has invested significant resources in expanding
`this capability and in technologi