8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

April 29, 2009

Date of Report (Date of earliest event reported)

OSI PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-15190	13-3159796
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation)	File Number)	Identification No.)

41 Pinelawn Road
Melville, NY 11747

(Address of principal executive offices)

(631) 962-2000

(Registrant’s telephone number, including area code)

N/A

(Former name or former address,
if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a- 12)

¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

     On April 29, 2009, OSI Pharmaceuticals, Inc. (“OSI”) issued a press release regarding its financial results for the quarter ended March 31, 2009. A copy of this release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

     As previously announced, OSI is holding a conference call, open to the public, to discuss these results at 5:00 p.m. (Eastern Time) on April 29, 2009. To access the live webcast or the archive via the Internet, log on to www.osip.com. Alternatively, please call 1-877-719-9791 (U.S.) or 1-719-325-4824 (international) to listen to the call. The conference ID number for the live call is 5668462. Telephone replay is available approximately two hours after the call through May 29, 2009. To access the replay, please call 1-888-203-1112 (U.S.) or 1-719-457-0820 (international). The conference ID number is 5668462.

     The attached press release contains, and the conference call will contain, both generally accepted accounting principals, or GAAP, and non-GAAP financial measures for the quarter ended March 31, 2009. The non-GAAP financial measures include adjusted net income from continuing operations and adjusted earnings per share from continuing operations, each of which have directly comparable GAAP financial measures. OSI has provided these non-GAAP financial measures to adjust for the impact of the following expenses:

• stock based compensation;

• imputed interest related to OSI’s 2% Convertible Senior Subordinated Notes due 2025 and 3% Convertible Senior Subordinated Notes due 2038, which results from OSI’s adoption of FASB Staff Position APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement;”

• amortization of acquired intangible assets; and

• non-cash tax expense, which results in an adjustment of OSI’s effective tax rate of approximately 39% to reflect its actual cash tax rate of approximately 3%.

     These items have been adjusted because they are non-cash, non-recurring or not otherwise considered to be core to OSI’s business. Management uses these non-GAAP financial measures internally to evaluate the performance of the business, including the allocation of resources as well as the planning and forecasting of future periods and believes that these results are useful to others in analyzing the core operating performance and trends of OSI for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP and therefore are not necessarily comparable to the financial results of other companies. These non-GAAP measures should be considered as a supplement to, not a substitute for or superior to, the corresponding financial measures calculated in accordance with GAAP.

     The non-GAAP financial measures included in the press release attached hereto as Exhibit 99.1, and in the conference call, have been reconciled to the comparable GAAP financial measures as required under the rules and regulations of the Securities Exchange Commission.

These non-GAAP measures have limitations, however, because they do not include all items of income and expense that affect OSI, and therefore should not be considered in isolation of, or as an alternative to, measurements required by GAAP.

     The information in this Item 2.02 (including Exhibit 99.1) is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this report, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.		Description
	99.1	Press Release dated April 29, 2009.

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 29, 2009	OSI PHARMACEUTICALS, INC.
	By:	/s/ Barbara A. Wood
		Barbara A. Wood
		Senior Vice President, General Counsel and Secretary

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EXHIBIT INDEX

Exhibit No.		Description
	99.1	Press Release dated April 29, 2009.

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EX-99.1

Exhibit 99.1

NEWS RELEASE

Contact:
OSI Pharmaceuticals, Inc. Kathy Galante (Investors/Media) Senior Director Kim Wittig (Media) Director 631-962-2000	Burns McClellan (Representing OSI) Justin Jackson/Kathy Nugent (Media) 212-213-0006

OSI Pharmaceuticals, Inc. Announces First Quarter 2009 Financial Results

     MELVILLE, NEW YORK — April 29, 2009 — OSI Pharmaceuticals, Inc. (NASDAQ: OSIP) announced today its financial results for the Company’s first quarter ended March 31, 2009. The Company reported net income from continuing operations of $16.5 million (or $0.28 per share) for the three months ended March 31, 2009, compared to $28.6 million (or $0.49 per share) for the three months ended March 31, 2008.

     Adjusting for non-cash tax expense (to reflect OSI’s actual cash tax rate of approximately 3%), expense related to stock-based compensation, interest expense related to the adoption of FSP APB 14-1 and certain other items detailed in the attached reconciliation of GAAP to non-GAAP financial measures, the Company reported non-GAAP earnings per share from continuing operations of $0.58 and $0.61 for the three months ended March 31, 2009 and 2008, respectively.

     The Company reported total revenues from continuing operations of $94 million for the first quarter of 2009 compared to revenues of $91 million for the first quarter of 2008, an increase of 3%. Revenues were comprised of the following key items:

• Tarceva Related Revenues of $84 million for the first quarter of 2009 compared to $82 million in the first quarter of 2008, based primarily on the following:

• Net revenues from the unconsolidated joint business for Tarceva of $49 million for the first quarter of 2009, compared to $50 million in the first quarter of 2008, arising from the Company’s co-promotion arrangement with Genentech, Roche’s wholly-owned subsidiary. The net revenues are based on total U.S. Tarceva sales of $111 million for the first quarter of 2009, compared to $111 million in the first quarter of 2008;

• Royalties on product licenses of $34 million for the first quarter of 2009 compared to $32 million in the first quarter of 2008 from Roche for sales of

Tarceva. The royalty revenues are based on total rest of world sales of $168 million for the first quarter of 2009 which increased 8%, compared to the $156 million reported in the first quarter of 2008;

• Other Revenues of $10 million for the first quarter of 2009 compared to $8 million in the first quarter of 2008, based primarily on the following:

• Royalties of $9 million for the first quarter of 2009 compared to $6 million in the first quarter of 2008 related to worldwide non-exclusive licensing agreements under the Company’s DP-IV patent portfolio covering the use of DP-IV inhibitors for treatment of type 2 diabetes.

• License, milestone and other revenues of $400,000 for the first quarter of 2009 compared to $2 million in the first quarter of 2008.

Operating Expenses

     Operating expenses from continuing operations for the first quarter of 2009 were $62 million compared to $58 million for the same period last year, with the increase primarily driven by an increase in research and development expenses related to the advancement of our clinical pipeline. Research and development expenses for the first quarter of 2009 were $35 million compared to $31 million for the same period last year. Selling, general and administrative expenses for the first quarter of 2009 were $24 million compared to $25 million for the same period last year.

Taxes and Interest Income /Expense

     Beginning in 2009, the Company is required to report its tax provision at its full effective tax rate, which is estimated at approximately 39%. However, the Company expects to continue paying taxes at the lower alternative minimum tax rates as it continues to utilize its net operating loss carryforwards (NOLs). The results also reflect the retrospective adoption of FSP APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)”, resulting in higher interest expense reported in both 2009 and 2008. Interest income also declined by approximately $2 million reflecting a decline in interest rates year over year.

Net Income Including Discontinued Operations

     The Company’s net income including results from discontinued operations was $16.4 million (or $0.28 per share) for the first quarter of 2009 compared with a net income of $26.2 million (or $0.45 per share) for the same period last year.

Use of Non- GAAP Financial Measures

     The accompanying tables contain both GAAP and non-GAAP financial measures for the periods presented. The non-GAAP measures include adjusted net income from continuing operations and adjusted earnings per share from continuing operations, each of which has directly comparable GAAP equivalents. OSI has provided these non-GAAP financial measures to adjust for the impact of (i) stock based compensation, (ii) imputed interest expense related to the adoption of FASB Staff Position APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement),” (iii) amortization of acquired intangible assets and

(iv) non-cash tax expense, and to adjust OSI’s effective tax rate of approximately 39% to reflect its actual cash tax rate of approximately 3%. These items have been adjusted because they are either non-cash, non-recurring or not otherwise considered to be core to OSI’s business. Management uses these non-GAAP financial measures internally to evaluate the performance of the business, including the allocation of resources as well as the planning and forecasting of future periods and believes that these results are useful to others in analyzing the core operating performance and trends of OSI for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP and therefore are not necessarily comparable to the financial results of other companies. These non-GAAP measures should be considered as a supplement to, not a substitute for or superior to, the corresponding financial measures calculated in accordance with GAAP.

Conference Call

     OSI will host a conference call reviewing the Company’s financial results, product portfolio and business developments on April 29, 2009 at 5:00PM (Eastern Time). To access the live webcast or the archive via the Internet, log on to www.osip.com. Please connect to the Company’s website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be needed to access the webcast. Alternatively, please call 1-877-719-9791 (U.S.) or 1-719-325-4824 (international) to listen to the call. The conference ID number for the live call is 5668462. Telephone replay is available approximately two hours after the call until May 29, 2009. To access the replay, please call 1-888-203-1112 (U.S.) or 1-719-457-0820 (international). The conference ID number is 5668462.

About OSI Pharmaceuticals

     OSI Pharmaceuticals is committed to “shaping medicine and changing lives” by discovering, developing and commercializing high-quality, novel and differentiated personalized medicines designed to extend life and improve the quality of life for patients with cancer and diabetes/obesity.

     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, OSI’s and its collaborators’ abilities to effectively market and sell Tarceva and to expand the approved indications for Tarceva, OSI’s ability to protect its intellectual property rights, safety concerns regarding Tarceva, competition to Tarceva and OSI’s drug candidates from other biotechnology and pharmaceutical companies, the completion of clinical trials, the effects of FDA and other governmental regulation, including pricing controls, OSI’s ability to successfully develop and commercialize drug candidates, and other factors described in OSI Pharmaceuticals’ filings with the Securities and Exchange Commission.

OSI Pharmaceuticals, Inc. and Subsidiaries
Selected Financial Information

	Three Months Ended March 31,
(Consolidated Statements of Operations	2009			2008*
In thousands, except per share data)	Unaudited			Unaudited
Revenues:
Tarceva-related revenues	$	83,856		$	82,358
Other revenues		9,821			8,377
Total revenues		93,677			90,735
Operating expenses:
Cost of goods sold		2,194			2,170
Research and development		35,436			30,549
Selling, general and administrative		24,201			24,531
Amortization of intangibles		228			602
Total operating expenses		62,059			57,852
Income from continuing operations		31,618			32,883
Other income (expense):
Investment income — net		2,214			3,734
Interest expense		(6,393	)		(6,305	)
Other income (expense) — net		(384	)		(900	)
Income from continuing operations before income taxes		27,055			29,412
Income tax provision		10,551			816
Net income from continuing operations		16,504			28,596
Loss from discontinued operations		(104	)		(2,426	)
Net income	$	16,400		$	26,170
Basic and diluted income (loss) per common share:
Basic income (loss)
Continuing operations	$	0.29		$	0.50
Discontinued operations		(0.00	)		(0.04	)
Net income	$	0.28		$	0.46
Diluted income (loss)
Continuing operations	$	0.28		$	0.49
Discontinued operations		(0.00	)		(0.04	)
Net income	$	0.28		$	0.45
Weighted average shares of common stock outstanding:
Basic shares		57,818			57,130
Diluted shares		60,630			57,813
Computation of diluted income per share from continuing operations:
Net income from continuing operations	$	16,504		$	28,596
Add: Interest and issuance costs related to dilutive convertible debt		495			—
Net income from continuing operations — diluted	$	16,999		$	28,596
Basic shares		57,818			57,130
Dilutive effect of options and restricted stock		814			683
Dilutive effect of the 2023 Notes		1,998			—
Dilutive effect of the 2025 Notes		—			—
Dilutive effect of the 2038 Notes		—			—
Diluted shares		60,630			57,813

	March 31,		December 31,
	2009		2008
	Unaudited
Cash and investments securities (including restricted investments)	$	541,238	$	515,511

* The three months ended March 31, 2008 have been restated to reflect the adoption of FSP APB 14-1.

OSI Pharmaceuticals, Inc. and Subsidiaries
Reconciliation From Reported Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations
and Reported Dilutive Income Per Share to Non GAAP Adjusted Diluted
Income Per Share
Unaudited
(In thousands, except per share data)

	Three Months Ended March 31,
	2009			2008
Reported diluted income per common share from continuing operations	$	0.28		$	0.49
Adjustments per common share		0.30			0.12
Adjusted diluted income per common share from continuing operations	$	0.58		$	0.61
Net income from continuing operations	$	16,504		$	28,596
Non-GAAP Adjustments:
Stock-based compensation		6,183			5,472
Imputed interest related to the adoption of FSP APB 14-1		3,448			3,067
Amortization of acquired intangibles		228			602
Non cash tax expense		9,848			—
Income tax effect on adjustments		(256	)		(253	)
Adjusted net income from continuing operations	$	35,955		$	37,484
Computation of adjusted diluted income per common share from continuing operations:
Adjusted net income from continuing operations	$	35,955		$	37,484
Add: Interest and issuance costs related to dilutive convertible debt		1,490			2,160
Adjusted net income from continuing operations — diluted	$	37,445		$	39,644
Computation of adjusted diluted shares:
Basic shares		57,818			57,130
Adjustment to dilutive shares:
Dilutive effect of options and restricted stock		814			683
Dilutive effect of the 2023 Notes		1,998			2,936
Dilutive effect of the 2025 Notes		3,908			3,908
Dilutive effect of the 2038 Notes (issued in January 2008)		—			—
Adjusted dilutive shares		64,538			64,657