OSI Pharma Tops Zacks Consensus – Analyst Blog

OSI Pharmaceuticals, Inc.’s (OSIP) first quarter 2010 earnings (excluding special items) of 63 cents per share exceeded the Zacks Consensus Estimate of 34 cents. This was also ahead of the year ago earnings (excluding special items) of 58 cents.

On a reported basis, the company earned 8 cents per share for the reported quarter compared to 28 cents earned in the year-ago quarter. The sharp decline was attributable to $11 million incurred in connection with the Astellas (a Japanese drugmaker) offer coupled with an $8 million impairment charge from its stake in AVEO Pharmaceuticals, Inc. (AVEO).

Total revenues for the quarter came in at approximately $107 million as against $94 million in the year-ago quarter. The company’s top growth driver Tarceva contributed a major portion of the revenues. Tarceva related revenues in the quarter climbed 9.5% year-over-year to $92 million.

Tarceva is promoted in the U.S. by both OSI and Genentech (now a part of the Roche group (RHHBY)). Internationally the drug is marketed by Roche Holdings and OSIP receives substantial royalty on international sales. Globally, the total net sales of Tarceva stood at approximately $308 million, as reported by Roche, up 10% year-over-year. Of this, U.S. Tarceva sales in the quarter climbed 2.7% year-over-year to $114 million.

Other revenues in the reported quarter climbed 40% year-over-year to $14 million, including royalties of $13 million compared with $9 million last year.

Operating expenses in the first quarter of 2010 climbed approximately 41.2% year-over-year to $87.6 million. The rise was primarily driven by tender offer related costs, a rise in research and development expenses and an increase in Ardsley-related restructuring and consolidation project expenses.

The expenditure on research and development for the reported quarter stood at $42 million compared to $35 million last year. Selling, general and administrative expenses for the quarter climbed approximately 20.2% year-over-year to $29.1 million.

Astellas tried for more than a year to acquire OSI Pharma and offered a price of $52 per share. However, OSI rejected that offer, which prompted Astellas to make a hostile bid for OSI’s shares.

OSI Pharmaceuticals, founded in 1983 and based in Melville, New York , is one of the leading pharmaceutical research and development organizations. The company focuses on drug discovery, preclinical research and drug development.