Eye on the Street: OSI Tanks on News
OSI Pharmaceuticals stock is getting absolutely slammed over the Eyetech deal announced earlier this morning.Seemingly, investors are questioning the drug company's plan to expand beyond its core cancer market.
Analysts said OSI was paying a high premium to move into an area in which it has no expertise.
Eyetech's main product is Macugen, a drug experts feel will lose market share and show waning sales in 2007 when Genentech (let's see what Cramer says tonight on Mad Money) launches its much hyped up eye-disease drug, Lucentis.
As you know, last month Catablast! Media Group reiterated its Hold rating on DNA precisely because we feel Lucentis will add substantially to an already impressive balance sheet and robust product pipeline.
Both drugs serve AMD, or age related macular degeneration.
The most upsetting news for OSI execs has to be the Morgan Stanley price target cut for their stock from $74 to $60.
According to that analyst, the synergies "just aren't there."
Eyetech shares have slumped 69 percent so far this year, so if OSI is overpaying for EYET, lets just say that things could be worse.
<< Home