OSI Pharmaceuticals's Diabetes and Obesity Subsidiary, Prosidion, Ini

    Business Editors/Health Editors

    MELVILLE, N.Y.--(BUSINESS WIRE)--Jan. 19, 2005--OSI Pharmaceuticals, Inc. (NASDAQ: OSIP) announced today that Prosidion Limited, its UK subsidiary focused on the discovery and development of diabetes and obesity therapeutics, has initiated a Phase II proof-of-concept and dose range finding study with the Dipeptidyl Peptidase-IV (DP-IV) inhibitor PSN9301. The study will enroll approximately sixty patients into a two-week in-house dosing and monitoring protocol. The study is being conducted in Berlin, Germany.
    The development of inhibitors of DP-IV (an enzyme catalyzing the breakdown of the natural hormone Glucagon-like peptide-1 (GLP-1)) has become a very competitive area in the type 2 diabetes field. PSN9301, an oral, small molecule inhibitor of DP-IV, is designed to prevent the breakdown of GLP-1 (a glucose-dependent stimulator of insulin secretion) in the period following meals where the need to reduce blood glucose levels in type 2 diabetic patients is most critical.
    "We believe that PSN9301 provides us with a differentiated and competitive agent in the DP-IV arena," stated Anker Lundemose, M.D., Ph.D., Chief Executive Officer of Prosidion. "This study will allow us to continue the optimization of PSN9301 use in preparation for more comprehensive Phase II and Phase III studies."
    Prosidion acquired the DP-IV technology platform from Probiodrug AG in June 2004. In addition to PSN9301, the platform comprises of a portfolio of DP-IV medical use patents. These include issued and licensed patents and pending patent applications with claims covering DP-IV as a target and the use of combinations of DP-IV inhibitors with other oral anti-diabetes drugs such as Metformin. Three non-exclusive license agreements to the patent estate were also acquired and Prosidion expects to grant additional non-exclusive licenses in the future.
    Prosidion has also established a strong and diverse early-stage pipeline in type 2 diabetes and obesity behind PSN9301. Two other small molecule drug candidates targeting glucokinase activation (PSN105) and glycogen phosphorylase inhibition (PSN357) are in late preclinical development and are scheduled to enter clinical trials (Phase I) in the first half of 2005. A further glucokinase activator, PSN010, with a different profile to PSN105, is scheduled to enter Phase I before the end of 2005.
    During 2004, OSI stepped up its financing of the Prosidion subsidiary considerably. Following the investment of $10 million into Prosidion by OSI in April 2004 and $50 million invested in June 2004, OSI invested a further $25 million in September 2004 to fully fund all programs in Prosidion. As a result of these investments, OSI owns approximately 97% of issued share capital in Prosidion. Prosidion has expanded to approximately 70 full-time employees and occupies OSI's UK research facility, following OSI's decision in August 2004 to consolidate its cancer research and development activities in the US.

    About OSI Pharmaceuticals

    OSI Pharmaceuticals is a leading biotechnology company primarily focused on the discovery, development, and commercialization of high-quality oncology products that both extend life and improve the quality of life for cancer patients worldwide. OSI has a balanced pipeline of oncology drug candidates that includes signal transduction inhibitors, apoptosis inducers, and a next-generation cytotoxic chemotherapy agent. Tarceva(TM), OSI's flagship product, is the first OSI drug discovered and developed by OSI to obtain FDA approval. OSI exclusively markets Novantrone(R) (mitoxantrone concentrate for injection) for the approved oncology indications and Gelclair(R) for the relief of pain associated with oral mucositis. OSI also established Prosidion Limited, a diabetes and obesity subsidiary based in the United Kingdom. For additional information about the company, please visit http://www.osip.com.

    About Prosidion

    Prosidion Limited is a research and development stage biotechnology company committed to the discovery and early development of novel high-quality, next-generation small-molecule compounds to treat type 2 diabetes and obesity. Prosidion has established a strong and diverse pipeline in diabetes and obesity with its most advanced programme being in Phase II clinical development. Prosidion is headquartered in Oxford, UK and has a research, development and management team possessing extensive experience within diabetes and obesity research, development, commercialisation and licensing. Prosidion is a majority-owned subsidiary of OSI Pharmaceuticals, Inc. Prosidion has full and continued access to OSI's small-molecule discovery platform and R & D infrastructure. For additional information about the company, please visit http://www.prosidion.com.

    This news release contains forward-looking statements. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. Factors that might cause such a difference include, among others, the completion of clinical trials, the FDA review process and other governmental regulation, Prosidion's and OSI's collaborators' abilities to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, the ability to effectively market products and other factors described in OSI Pharmaceuticals' filings with the Securities and Exchange Commission. PSN9301 is an investigational compound and has not yet been approved as safe or efficacious in humans for its ultimate intended use.

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CONTACT: OSI Pharmaceuticals, Inc. Investor & Public Relations: Kathy Galante, 631-962-2000 or Burns McClellan (representing OSI) Media: Kathy Nugent, 212-213-0006 or Investors: Jonathan M. Nugent, 212-213-0006

KEYWORD: NEW YORK INDUSTRY KEYWORD: PHARMACEUTICAL MEDICAL BIOTECHNOLOGY SOURCE: OSI Pharmaceuticals, Inc.

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