BioCentury
ARTICLE | Finance

Ebb & Flow

November 13, 2006 8:00 AM UTC

In August 2005, when OSI (OSIP) announced plans to buy Eyetech for $935 million in cash and stock, the Street instantly concluded that OSIP had abandoned prospects for at least 20% revenue growth in order to buy a distressed asset - Macugen pegaptanib for age-related macular degeneration. OSIP's valuation fell 22% the day the deal was announced, to $1.6 billion from $2.1 billion.

Last week, OSIP said it would exit the eye business and out-license, partner or sell Macugen. The company originally had argued the eye business would generate positive cash flow in 2006-08. But Genentech (DNA) snatched that opportunity away with its Lucentis ranibizumab and Avastin bevacizumab...