##### Table of Contents



FORM 10-Q
 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to .
 Commission file number 0-15190
 OSI Pharmaceuticals, Inc.
  Delaware
    
    13-3159796(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 41 Pinelawn Road, Melville, New York
    
    11747(Address of principal executive offices)
    
    (Zip Code)
  
 
  þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
 Page No.PART I. FINANCIAL INFORMATION
    
    
    1Item 1. Financial Statements
    
    
    1Consolidated Balance Sheets
-June 30, 2009 and December 31, 2008 (Unaudited)
    
    
    1Consolidated Statements of Operations
-Three Months Ended June 30, 2009 and 2008 (Unaudited)
    
    
    2Consolidated Statements of Operations
-Six Months Ended June 30, 2009 and 2008 (Unaudited)
    
    
    2Consolidated Statements of Cash Flows
-Six Months Ended June 30, 2009 and 2008 (Unaudited)
    
    
    3Notes to Consolidated Financial Statements (Unaudited)
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    30Item 3. Quantitative and Qualitative Disclosures About Market Risks
    
    
    42Item 4. Controls and Procedures
    
    
    43PART II. OTHER INFORMATION
    
    
    44Item 1. Legal Proceedings
    
    
    44Item 1A. Risk Factors
    
    
    44Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    45Item 3. Defaults Upon Senior Securities
    
    
    45Item 4. Submission of Matters to a Vote of Security Holders
    
    
    45Item 5. Other Information
    
    
    45Item 6. Exhibits
    
    
    45SIGNATURES
    
    
    47INDEX TO EXHIBITS
    
    
    48EX-10.1EX-10.2EX-10.3EX-31.1EX-31.2EX-32.1EX-32.2
  i




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands except per share data)
 June 30,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    154,615
    
    
    $
    272,936Investment securities
    
    
    399,179
    
    
    
    240,328Restricted investment securities
    
    
    2,297
    
    
    
    2,247Accounts receivable
    
    
    104,827
    
    
    
    100,242Inventory
    
    
    18,518
    
    
    
    20,139Interest receivable
    
    
    1,870
    
    
    
    1,428Prepaid expenses and other current assets
    
    
    9,894
    
    
    
    6,719Assets related to discontinued operations
    
    
    
    
    
    
    917Deferred tax assets  net
    
    
    24,730
    
    
    
    45,425Total current assets
    
    
    715,930
    
    
    
    690,381Property, equipment and leasehold improvements  net
    
    
    66,852
    
    
    
    43,443Debt issuance costs  net
    
    
    4,788
    
    
    
    5,632Goodwill
    
    
    38,919
    
    
    
    38,648Other intangible assets  net
    
    
    8,241
    
    
    
    7,711Other assets
    
    
    15,125
    
    
    
    14,591Deferred tax assets  net
    
    
    273,797
    
    
    
    273,797$
    1,123,652
    
    
    $
    1,074,203LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    40,759
    
    
    $
    49,052Unearned revenue  current
    
    
    10,027
    
    
    
    10,547Liabilities related to discontinued operations
    
    
    2,428
    
    
    
    1,522Total current liabilities
    
    
    53,214
    
    
    
    61,121Other liabilities:Rent obligations and deferred rent expenses
    
    
    4,867
    
    
    
    8,154Unearned revenue  long-term
    
    
    31,316
    
    
    
    33,398Convertible senior subordinated notes  net
    
    
    375,991
    
    
    
    369,095Accrued post-retirement benefit cost and other
    
    
    4,406
    
    
    
    3,890Total liabilities
    
    
    469,794
    
    
    
    475,658Commitments and contingenciesStockholders equity:Preferred stock, $.01 par value; 5,000 shares authorized; no shares issued at
June 30, 2009 and December 31, 2008
    
    
    
    
    
    
    Common stock, $.01 par value; 200,000 shares authorized, 61,330 and 61,124
shares issued at June 30, 2009 and December 31, 2008, respectively
    
    
    613
    
    
    
    611Additional paid-in capital
    
    
    1,777,988
    
    
    
    1,761,179Accumulated deficit
    
    
    (1,024,187
    )
    
    
    (1,057,118
    )Accumulated other comprehensive income (loss)
    
    
    1,663
    
    
    
    (3,908
    )756,077
    
    
    
    700,764Less: treasury stock, at cost; 3,396 shares at June 30, 2009 and December
31, 2008
    
    
    (102,219
    )
    
    
    (102,219
    )Total stockholders equity
    
    
    653,858
    
    
    
    598,545$
    1,123,652
    
    
    $
    1,074,203
  1




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands except per share data)
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Revenues:Tarceva-related revenues
    
    $
    85,323
    
    
    $
    87,940
    
    
    $
    169,179
    
    
    $
    170,298Other revenues
    
    
    13,743
    
    
    
    7,714
    
    
    
    23,564
    
    
    
    16,091Total revenues
    
    
    99,066
    
    
    
    95,654
    
    
    
    192,743
    
    
    
    186,389Operating expenses:Cost of goods sold
    
    
    2,659
    
    
    
    2,061
    
    
    
    4,853
    
    
    
    4,231Research and development
    
    
    37,147
    
    
    
    30,406
    
    
    
    72,583
    
    
    
    60,955Selling, general and administrative
    
    
    25,187
    
    
    
    23,192
    
    
    
    49,388
    
    
    
    47,723Amortization of intangibles
    
    
    236
    
    
    
    636
    
    
    
    464
    
    
    
    1,238Total operating expenses
    
    
    65,229
    
    
    
    56,295
    
    
    
    127,288
    
    
    
    114,147Operating income from continuing operations
    
    
    33,837
    
    
    
    39,359
    
    
    
    65,455
    
    
    
    72,242Other income (expense):Investment income  net
    
    
    1,957
    
    
    
    2,960
    
    
    
    4,171
    
    
    
    6,694Interest expense
    
    
    (6,392
    )
    
    
    (6,189
    )
    
    
    (12,785
    )
    
    
    (12,494
    )Other (expense) income  net
    
    
    (2,338
    )
    
    
    (1,006
    )
    
    
    (2,722
    )
    
    
    (1,906
    )Income from continuing operations before income taxes
    
    
    27,064
    
    
    
    35,124
    
    
    
    54,119
    
    
    
    64,536Income tax provision
    
    
    10,556
    
    
    
    958
    
    
    
    21,107
    
    
    
    1,774Net income from continuing operations
    
    
    16,508
    
    
    
    34,166
    
    
    
    33,012
    
    
    
    62,762Income (loss) from discontinued operations  net of tax
    
    
    23
    
    
    
    (11,919
    )
    
    
    (81
    )
    
    
    (14,345
    )Net income
    
    $
    16,531
    
    
    $
    22,247
    
    
    $
    32,931
    
    
    $
    48,417Basic and diluted income (loss) per common share:Basic income (loss):Continuing operations
    
    $
    0.29
    
    
    $
    0.60
    
    
    $
    0.57
    
    
    $
    1.10Discontinued operations
    
    
    0.00
    
    
    
    (0.21
    )
    
    
    (0.00
    )
    
    
    (0.25
    )Net income
    
    $
    0.29
    
    
    $
    0.39
    
    
    $
    0.57
    
    
    $
    0.85Diluted income (loss):Continuing operations
    
    $
    0.28
    
    
    $
    0.59
    
    
    $
    0.56
    
    
    $
    1.08Discontinued operations
    
    
    0.00
    
    
    
    (0.20
    )
    
    
    (0.00
    )
    
    
    (0.24
    )Net income
    
    $
    0.28
    
    
    $
    0.39
    
    
    $
    0.56
    
    
    $
    0.85Weighted average shares of common stock outstanding:Basic shares
    
    
    57,906
    
    
    
    57,083
    
    
    
    57,862
    
    
    
    57,107Diluted shares
    
    
    60,333
    
    
    
    59,932
    
    
    
    60,481
    
    
    
    60,340
  2




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
 Six Months EndedJune 30,2009
    
    
    2008Cash flow from operating activities:Net income
    
    $
    32,931
    
    
    $
    48,417Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    3,875
    
    
    
    5,612Impairment of assets
    
    
    559
    
    
    
    6,078Impact of inventory step-up related to inventory sold
    
    
    
    
    
    
    47Amortization of FSP APB 14-1 discount and debt issuance costs
    
    
    7,739
    
    
    
    7,600Amortization of premiums and discounts on investments
    
    
    (370
    )
    
    
    (174
    )Non-cash compensation charge
    
    
    12,480
    
    
    
    9,916Deferred tax provision
    
    
    20,695
    
    
    
    Changes in assets and liabilities:Accounts receivable
    
    
    (3,432
    )
    
    
    (142
    )Inventory
    
    
    1,621
    
    
    
    (426
    )Prepaid expenses and other current assets
    
    
    (2,993
    )
    
    
    2,666Other assets
    
    
    (1,013
    )
    
    
    (1,093
    )Accounts payable and accrued expenses
    
    
    (7,071
    )
    
    
    (14,546
    )Unearned revenue
    
    
    (2,602
    )
    
    
    (4,391
    )Accrued post-retirement benefit cost and other
    
    
    (5
    )
    
    
    10Net cash provided by operating activities
    
    
    62,414
    
    
    
    59,574Cash flows from investing activities:Purchases of investments (restricted and unrestricted)
    
    
    (336,486
    )
    
    
    (80,664
    )Maturities and sales of investments (restricted and unrestricted)
    
    
    179,582
    
    
    
    135,379Additions to property, equipment and leasehold improvements
    
    
    (27,621
    )
    
    
    (2,573
    )Purchase of intangible assets
    
    
    
    
    
    
    (8,000
    )Other
    
    
    (123
    )
    
    
    (68
    )Net cash (used in) provided by investing activities
    
    
    (184,648
    )
    
    
    44,074Cash flows from financing activities:Proceeds from the exercise of stock options,
employee purchase plan, and other
    
    
    4,362
    
    
    
    3,711Employee taxes paid related to equity awards
    
    
    (31
    )
    
    
    (693
    )Proceeds from the issuance of convertible senior subordinated notes
    
    
    
    
    
    
    200,000Debt issuance costs
    
    
    
    
    
    
    (6,704
    )Purchase of treasury stock
    
    
    
    
    
    
    (64,998
    )Repurchase of a portion of the 2023 Notes
    
    
    
    
    
    
    (50,000
    )Net cash provided by financing activities
    
    
    4,331
    
    
    
    81,316Net (decrease) increase in cash and cash equivalents
    
    
    (117,903
    )
    
    
    184,964Effect of exchange rate changes on cash and cash equivalents
    
    
    (418
    )
    
    
    (1
    )Cash and cash equivalents at beginning of period
    
    
    272,936
    
    
    
    162,737Cash and cash equivalents at end of period
    
    $
    154,615
    
    
    $
    347,700Cash paid for taxes
    
    $
    1,032
    
    
    $
    1,488Cash paid for interest
    
    $
    5,774
    
    
    $
    3,795
  3




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 ® ®
 Basis of Presentation
     4




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  Revenue Recognition
  Net Revenue from Unconsolidated Joint Business
    5




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  Royalties
   License and Milestones
   6




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
   Product Development and Commercialization Agreements
   7




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
   Genentech and Roche
     8




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
      9




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  AVEO
   10




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 Income Per Share
    11




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Net income from continuing operations  basic
    
    $
    16,508
    
    
    $
    34,166
    
    
    $
    33,012
    
    
    $
    62,762Add: Interest and issuance costs related to convertible notes 
net of tax
    
    
    495
    
    
    
    1,186
    
    
    
    991
    
    
    
    2,647Net income from continuing operations  diluted
    
    $
    17,003
    
    
    $
    35,352
    
    
    $
    34,003
    
    
    $
    65,409Weighted average common shares outstanding  basic
    
    
    57,906
    
    
    
    57,083
    
    
    
    57,862
    
    
    
    57,107Dilutive effect of options and restricted stock
    
    
    429
    
    
    
    554
    
    
    
    621
    
    
    
    618Dilutive effect of 2023 Notes
    
    
    1,998
    
    
    
    2,295
    
    
    
    1,998
    
    
    
    2,615Dilutive effect of 2025 Notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dilutive effect of 2038 Notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares and dilutive potential
common shares  diluted
    
    
    60,333
    
    
    
    59,932
    
    
    
    60,481
    
    
    
    60,340Net income per share from continuing operations:Basic
    
    $
    0.29
    
    
    $
    0.60
    
    
    $
    0.57
    
    
    $
    1.10Diluted
    
    $
    0.28
    
    
    $
    0.59
    
    
    $
    0.56
    
    
    $
    1.08Under the if-converted method, 3,908,241 common share equivalents related to our 2025
Notes, and 2,709,260 common share equivalents related to our 2038 Notes, were not included in
diluted earnings per share for the three and six months ended June 30, 2009 because their effect
would be anti-dilutive. For the three and six months ended June 30, 2008, the 2025 Notes and the
2038 Notes were not included in diluted earnings per share because their effect
would be anti-dilutive. The table below sets forth (in thousands) the common share
equivalents related to convertible notes and equity plans and the interest expense related to the
convertible notes not included in dilutive shares because their effect would be anti-dilutive.
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Common share
equivalents  convertible notes
    
    
    6,617
    
    
    
    6,617
    
    
    
    6,617
    
    
    
    6,509Common share
equivalents  equity plans
    
    
    3,032
    
    
    
    3,520
    
    
    
    2,632
    
    
    
    3,327Convertible note interest and issuance expense not
added back under the if-converted method
    
    $
    3,627
    
    
    $
    5,602
    
    
    $
    7,252
    
    
    $
    11,013
 12




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 Comprehensive Income
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Net income
    
    $
    16,531
    
    
    $
    22,247
    
    
    $
    32,931
    
    
    $
    48,417Other comprehensive income:Foreign currency translation adjustments
    
    
    4,917
    
    
    
    77
    
    
    
    4,391
    
    
    
    110Post-retirement plan
    
    
    (8
    )
    
    
    
    
    
    
    (16
    )
    
    
    Unrealized holding gains (losses) arising during period
    
    
    720
    
    
    
    (597
    )
    
    
    1,205
    
    
    
    (196
    )Unrealized losses on derivative instruments
    
    
    (9
    )
    
    
    
    
    
    
    (9
    )
    
    
    Total comprehensive income
    
    $
    22,151
    
    
    $
    21,727
    
    
    $
    38,502
    
    
    $
    48,331
  June 30,
    
    December 31,2009
    
    2008Cumulative foreign currency translation adjustment
    
    $
    652
    
    
    $
    (3,739
    )Post-retirement plan
    
    
    362
    
    
    
    378Unrealized gain (losses) on available-for-sale securities
    
    
    658
    
    
    
    (547
    )Unrealized losses on derivative instruments
    
    
    (9
    )
    
    
    Accumulated other comprehensive income (losses)
    
    $
    1,663
    
    
    $
    (3,908
    )
 Fair Value Measurements
    (i)
    
    Level 1 quoted prices in active markets for identical assets and liabilities;
 13




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 (ii)     Level 2 observable inputs other than quoted prices in non-active markets for identical
assets and liabilities or quoted prices for similar assets or liabilities in active markets; and(iii)
    
    Level 3 unobservable inputs for which little or no market data exists, requiring
management to develop its own assumptions.
   QuotedPrices inAs
    
    Active
    
    SignificantReflected
    
    Market for
    
    Other
    
    Significanton the
    
    Identical
    
    Observable
    
    UnobservableBalance
    
    Assets
    
    Inputs
    
    InputsSheet
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    TotalAssets:Cash equivalents
    
    $
    145,131
    
    
    $
    145,131
    
    
    $
    
    
    
    $
    
    
    
    $
    145,131Investment securities
    
    
    399,179
    
    
    
    
    
    
    
    399,179
    
    
    
    
    
    
    
    399,179Restricted investments
    
    
    2,297
    
    
    
    
    
    
    
    2,297
    
    
    
    
    
    
    
    2,297Other assets
    
    
    1,362
    
    
    
    
    
    
    
    1,362
    
    
    
    
    
    
    
    1,362Liabilities:Derivatives (see Note 8)
    
    
    22
    
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    222038 Notes (Face value
$200,000)
    
    
    172,684
    
    
    
    
    
    
    
    160,500
    
    
    
    
    
    
    
    160,5002025 Notes (Face value
$115,000)
    
    
    103,357
    
    
    
    
    
    
    
    124,700
    
    
    
    
    
    
    
    124,7002023 Notes
(Face value $99,950)
    
    
    99,950
    
    
    
    
    
    
    
    81,300
    
    
    
    
    
    
    
    81,300
  14




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  QuotedPrices inAs
    
    Active
    
    SignificantReflected
    
    Market for
    
    Other
    
    Significanton the
    
    Identical
    
    Observable
    
    UnobservableBalance
    
    Assets
    
    Inputs
    
    InputsSheet
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    TotalAssets:Cash equivalents
    
    $
    250,380
    
    
    $
    248,181
    
    
    $
    2,201
    
    
    $
    
    
    
    $
    250,382Investment securities
    
    
    240,328
    
    
    
    
    
    
    
    240,328
    
    
    
    
    
    
    
    240,328Restricted investments
    
    
    2,247
    
    
    
    
    
    
    
    2,247
    
    
    
    
    
    
    
    2,247Other assets
    
    
    1,104
    
    
    
    
    
    
    
    1,104
    
    
    
    
    
    
    
    1,104Liabilities:2038 Notes
(Face value $200,000)
    
    
    169,326
    
    
    
    
    
    
    
    161,220
    
    
    
    
    
    
    
    161,2202025 Notes
(Face value $115,000)
    
    
    99,819
    
    
    
    
    
    
    
    157,010
    
    
    
    
    
    
    
    157,0102023 Notes
(Face value $99,950)
    
    
    99,950
    
    
    
    
    
    
    
    85,407
    
    
    
    
    
    
    
    85,407
    15




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  Investments
    Unrealized
    
    UnrealizedCosts
    
    Gains
    
    Losses
    
    Fair ValueJune 30, 2009U.S. government and U.S. government agency
securities
    
    $
    64,855
    
    
    $
    339
    
    
    $
    
    
    
    $
    65,194Corporate and financial institutions debt
    
    
    329,043
    
    
    
    1,157
    
    
    
    (415
    )
    
    
    329,785Municipal securities
    
    
    4,200
    
    
    
    
    
    
    
    
    
    
    
    4,200Total investment securities
    
    
    398,098
    
    
    
    1,496
    
    
    
    (415
    )
    
    
    399,179Restricted investments
    
    
    2,297
    
    
    
    
    
    
    
    
    
    
    
    2,297Total
    
    $
    400,395
    
    
    $
    1,496
    
    
    $
    (415
    )
    
    $
    401,476
 16




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 Unrealized
    
    UnrealizedCosts
    
    Gains
    
    Losses
    
    Fair ValueDecember 31, 2008U.S. government and U.S. government agency
securities
    
    $
    66,007
    
    
    $
    607
    
    
    $
    
    
    
    $
    66,614Corporate and financial institutions debt
    
    
    170,634
    
    
    
    74
    
    
    
    (1,247
    )
    
    
    169,461Municipal securities
    
    
    4,237
    
    
    
    16
    
    
    
    
    
    
    
    4,253Total investment securities
    
    
    240,878
    
    
    
    697
    
    
    
    (1,247
    )
    
    
    240,328Restricted investments
    
    
    2,244
    
    
    
    3
    
    
    
    
    
    
    
    2,247Total
    
    $
    243,122
    
    
    $
    700
    
    
    $
    (1,247
    )
    
    $
    242,575
     Cost
    
    Fair Value2009
    
    $
    107,551
    
    
    $
    107,6392010
    
    
    227,314
    
    
    
    227,9172011
    
    
    56,177
    
    
    
    56,5262012
    
    
    7,056
    
    
    
    7,097$
    398,098
    
    
    $
    399,179
 Derivatives
   17




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
     Asset Derivatives
    
    Liability DerivativesBalance Sheet Location
    
    Fair Value
    
    Balance Sheet Location
    
    Fair ValueForeign currency contracts
    
    Other current assets
    
    $
    
    
    Other current liabilities
    
    $
    22
  Location of Gain or(Loss) ReclassifiedAmount of Gain or (Loss)
    
    
    from Accumulated
    
    
    Amount of Gain or (Loss) Reclassified fromRecognized in OCI on Derivatives
    
    
    OCI into Earnings
    
    
    Accumulated OCI into Earnings (Effective(Effective Portion)
    
    
    (Effective Portion)
    
    
    Portion(a)Three months ended
    
    Six months ended
    
    
    
    
    
    Three months ended
    
    
    Six months endedJune 30, 2009
    
    June 30, 2009
    
    
    
    
    
    June 30, 2009
    
    
    June 30, 2009$
    (9
    )
    $
    (9
    )
    
    Royalty revenue
    
    $
    
    
    
    $
    
 
 (a)
    
    There were $6,000 of losses recognized in earnings related to the ineffective portion of
the hedging relationship for the three and six months ended June 30, 2009. There were no
amounts excluded from the assessment of hedge effectiveness for both the three and six months
ended June 30, 2009. 18




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  Accounting for Equity  Based Compensation
  Stock Options
   19




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected volatility
    
    
    50.58
    %
    
    
    49.62
    %
    
    
    50.17
    %
    
    
    48.53
    %Risk-free interest rate
    
    
    1.70
    %
    
    
    3.73
    %
    
    
    1.95
    %
    
    
    3.66
    %Expected term (years)
    
    
    4.97
    
    
    
    4.67
    
    
    
    5.45
    
    
    
    4.67
 Inventory
   June 30,
    
    December 31,2009
    
    2008Raw materials
    
    $
    533
    
    
    $
    676Work-in-process
    
    
    9,385
    
    
    
    8,532Finished goods on hand
    
    
    3,265
    
    
    
    4,897Inventory subject to return
    
    
    5,335
    
    
    
    6,034Total inventory
    
    $
    18,518
    
    
    $
    20,139
  Other Intangible Assets  Net
  June 30, 2009
    
    December 31, 2008Carrying
    
    Accumulated
    
    Net Book
    
    Carrying
    
    Accumulated
    
    Net BookAmount
    
    Amortization
    
    Value
    
    Amount
    
    Amortization
    
    ValueAcquired intangibles
    
    $
    10,586
    
    
    $
    (2,345
    )
    
    $
    8,241
    
    
    $
    9,386
    
    
    $
    (1,675
    )
    
    $
    7,711
  20




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
   Consolidation of Facilities
 Oxford, England
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Opening liability
    
    $
    
    
    
    $
    2,510
    
    
    $
    1,899
    
    
    $
    2,882Cash paid for rent
    
    
    
    
    
    
    (153
    )
    
    
    
    
    
    
    (626
    )Refurbishment adjustment
    
    
    
    
    
    
    
    
    
    
    (1,674
    )
    
    
    Other
    
    
    
    
    
    
    9
    
    
    
    (225
    )
    
    
    110Ending liability
    
    $
    
    
    
    $
    2,366
    
    
    $
    
    
    
    $
    2,366
 Eyetech Acquired Facilities
  21




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Opening liability
    
    $
    2,310
    
    
    $
    3,506
    
    
    $
    2,295
    
    
    $
    3,282Accretion expense
    
    
    38
    
    
    
    40
    
    
    
    77
    
    
    
    80Cash paid for rent
    
    
    (1,295
    )
    
    
    (2,115
    )
    
    
    (2,593
    )
    
    
    (3,305
    )Sublease income
    
    
    1,180
    
    
    
    1,138
    
    
    
    2,454
    
    
    
    2,512Ending liability
    
    $
    2,233
    
    
    $
    2,569
    
    
    $
    2,233
    
    
    $
    2,569
 Employee Post-retirement Plan and Other
 Employee Post-retirement Plan
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Interest costs on accumulated post-retirement
benefits obligation
    
    $
    34
    
    
    $
    44
    
    
    $
    68
    
    
    $
    88Amortization of loss
    
    
    (8
    )
    
    
    
    
    
    
    (16
    )
    
    
    Net post-retirement benefit cost
    
    $
    26
    
    
    $
    44
    
    
    $
    52
    
    
    $
    88
 Sabbatical Leave Accrual
  22




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  Nonqualified Deferred Compensation Plan
  Income Taxes
   23




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 Convertible Debt
     June 30, 2009
    
    December 31, 2008Net Carrying
    
    
    
    
    
    
    
    
    
    Net CarryingLong-term
    
    Principal
    
    Discount
    
    Value
    
    Principal
    
    Discount
    
    Value2023 Notes  3.25%
    
    $
    99,950
    
    
    $
    
    
    
    $
    99,950
    
    
    $
    99,950
    
    
    $
    
    
    
    $
    99,9502025 Notes  2.00%
    
    
    115,000
    
    
    
    11,643
    
    
    
    103,357
    
    
    
    115,000
    
    
    
    15,181
    
    
    
    99,8192038 Notes  3.00%
    
    
    200,000
    
    
    
    27,316
    
    
    
    172,684
    
    
    
    200,000
    
    
    
    30,674
    
    
    
    169,326$
    414,950
    
    
    $
    38,959
    
    
    $
    375,991
    
    
    $
    414,950
    
    
    $
    45,855
    
    
    $
    369,095
  24




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
 Change in Accounting Principle
    Three MonthsEnded June
    
    As Adjusted30, 2008 as
    
    andOriginally
    
    Currently
    
    Effect ofReported
    
    Reported
    
    ChangeRevenues
    
    $
    95,654
    
    
    $
    95,654
    
    
    $
    Operating expenses
    
    
    56,295
    
    
    
    56,295
    
    
    
    Operating income from continuing operations
    
    
    39,359
    
    
    
    39,359
    
    
    
    Interest expense
    
    
    (3,015
    )
    
    
    (6,189
    )
    
    
    (3,174
    )Investment income & other expense
    
    
    1,831
    
    
    
    1,954
    
    
    
    123Income from continuing operations before
income taxes
    
    
    38,175
    
    
    
    35,124
    
    
    
    (3,051
    )Income tax provision
    
    
    958
    
    
    
    958
    
    
    
    Net income from continuing operations
    
    
    37,217
    
    
    
    34,166
    
    
    
    (3,051
    )Loss from discontinued operations
    
    
    (11,919
    )
    
    
    (11,919
    )
    
    
    Net income
    
    $
    25,298
    
    
    $
    22,247
    
    
    $
    (3,051
    )
 25




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  Three MonthsEnded June
    
    As Adjusted30, 2008 as
    
    andOriginally
    
    Currently
    
    Effect ofReported
    
    Reported
    
    ChangeNet income from continuing operations  basic
    
    $
    37,217
    
    
    $
    34,166
    
    
    $
    (3,051
    )Add: Interest and issuance costs related to
convertible debt  net of tax
    
    
    1,943
    
    
    
    1,186
    
    
    
    (757
    )Net income from continuing operations  diluted
    
    $
    39,160
    
    
    $
    35,352
    
    
    $
    (3,808
    )Weighted average common shares outstanding  basic
    
    
    57,083
    
    
    
    57,083
    
    
    
    Dilutive effect of options and restricted stock
    
    
    554
    
    
    
    554
    
    
    
    Dilutive effect of 2023 Notes
    
    
    2,295
    
    
    
    2,295
    
    
    
    Dilutive effect of 2025 Notes
    
    
    3,908
    
    
    
    
    
    
    
    (3,908
    )Dilutive effect of 2038 Notes
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares and dilutive
potential common shares  diluted
    
    
    63,840
    
    
    
    59,932
    
    
    
    (3,908
    )Net income per share from continuing operations:Basic
    
    $
    0.65
    
    
    $
    0.60
    
    
    $
    (0.05
    )Diluted
    
    $
    0.61
    
    
    $
    0.59
    
    
    $
    (0.02
    )The impact of retrospectively adopting FSP APB 14-1 on our statement of operations for
the six months ended June 30, 2008 was as follows (in thousands):
 Six MonthsEnded June
    
    As Adjusted30, 2008 as
    
    andOriginally
    
    Currently
    
    Effect ofReported
    
    Reported
    
    ChangeRevenues
    
    $
    186,389
    
    
    $
    186,389
    
    
    $
    Operating expenses
    
    
    114,147
    
    
    
    114,147
    
    
    
    Operating income from continuing operations
    
    
    72,242
    
    
    
    72,242
    
    
    
    Interest expense
    
    
    (6,146
    )
    
    
    (12,494
    )
    
    
    (6,348
    )Investment income & other expense
    
    
    4,558
    
    
    
    4,788
    
    
    
    230Income from continuing operations before
income taxes
    
    
    70,654
    
    
    
    64,536
    
    
    
    (6,118
    )Income tax provision
    
    
    1,774
    
    
    
    1,774
    
    
    
    Net income from continuing operations
    
    
    68,880
    
    
    
    62,762
    
    
    
    (6,118
    )Loss from discontinued operations
    
    
    (14,345
    )
    
    
    (14,345
    )
    
    
    Net income
    
    $
    54,535
    
    
    $
    48,417
    
    
    $
    (6,118
    )
 26




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  Six MonthsEnded June
    
    As Adjusted30, 2008 as
    
    andOriginally
    
    Currently
    
    Effect ofReported
    
    Reported
    
    ChangeNet income from continuing operations  basic
    
    $
    68,880
    
    
    $
    62,762
    
    
    $
    (6,118
    )Add: Interest and issuance costs related to
convertible debt  net of tax
    
    
    4,162
    
    
    
    2,647
    
    
    
    (1,515
    )Net income from continuing operations  diluted
    
    $
    73,042
    
    
    $
    65,409
    
    
    $
    (7,633
    )Weighted average common shares outstanding  basic
    
    
    57,107
    
    
    
    57,107
    
    
    
    Dilutive effect of options and restricted stock
    
    
    618
    
    
    
    618
    
    
    
    Dilutive effect of 2023 Notes
    
    
    2,615
    
    
    
    2,615
    
    
    
    Dilutive effect of 2025 Notes
    
    
    3,908
    
    
    
    
    
    
    
    (3,908
    )Dilutive effect of 2038 Notes
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares and dilutive
potential common shares  diluted
    
    
    64,248
    
    
    
    60,340
    
    
    
    (3,908
    )Net income per share from continuing operations:Basic
    
    $
    1.21
    
    
    $
    1.10
    
    
    $
    (0.11
    )Diluted
    
    $
    1.14
    
    
    $
    1.08
    
    
    $
    (0.06
    )
  As AdjustedDecember 31,
    
    and2008 As
    
    Currently
    
    Effect ofReported
    
    Reported
    
    ChangeCurrent assets
    
    $
    690,381
    
    
    $
    690,381
    
    
    $
    Deferred tax assets  net
    
    
    291,205
    
    
    
    273,797
    
    
    
    (17,408
    )Debt issuance costs  net
    
    
    7,080
    
    
    
    5,632
    
    
    
    (1,448
    )Other Assets  non current
    
    
    104,393
    
    
    
    104,393
    
    
    
    Total assets
    
    $
    1,093,059
    
    
    $
    1,074,203
    
    
    $
    (18,856
    )Current liabilities
    
    $
    61,121
    
    
    $
    61,121
    
    
    $
    Non-current liabilities
    
    
    45,442
    
    
    
    45,442
    
    
    
    Convertible senior subordinated notes  non-
current
    
    
    414,950
    
    
    
    369,095
    
    
    
    (45,855
    )Total liabilities
    
    
    521,513
    
    
    
    475,658
    
    
    
    (45,855
    )Common and preferred stock, net of treasury
stock
    
    
    (101,608
    )
    
    
    (101,608
    )
    
    
    Additional paid-in-capital
    
    
    1,693,263
    
    
    
    1,761,179
    
    
    
    67,916Accumulated deficit
    
    
    (1,016,201
    )
    
    
    (1,057,118
    )
    
    
    (40,917
    )Accumulated other comprehensive income
    
    
    (3,908
    )
    
    
    (3,908
    )
    
    
    Total stockholders equity
    
    
    571,546
    
    
    
    598,545
    
    
    
    26,999Total liabilities and stockholders equity
    
    $
    1,093,059
    
    
    $
    1,074,203
    
    
    $
    (18,856
    )
 Eyetech Discontinued Operations
  27




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OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Net revenue
    
    $
    362
    
    
    $
    6,789
    
    
    $
    670
    
    
    $
    12,618Pretax income (loss)
    
    $
    36
    
    
    $
    (12,228
    )
    
    $
    (133
    )
    
    $
    (14,721
    )Income (loss) from discontinued operations
    
    $
    23
    
    
    $
    (11,919
    )
    
    $
    (81
    )
    
    $
    (14,345
    )
   June 30,
    
    December 31,2009
    
    2008Assets:Accounts receivable
    
    $
    
    
    
    $
    917Assets related to discontinued operations
    
    $
    
    
    
    $
    917Liabilities:Accounts payable and accrued expenses
    
    $
    2,428
    
    
    $
    1,522Liabilities related to discontinued operations
    
    $
    2,428
    
    
    $
    1,522
 ®
 28




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##### Table of Contents



OSI PHARMACEUTICALS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
  (OSI) Eyetech
Divestiture  Severance Costs
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Opening liability, January 1
    
    $
    258
    
    
    $
    1,797
    
    
    $
    387
    
    
    $
    800Accrual for severance and retention bonuses
    
    
    
    
    
    
    278
    
    
    
    27
    
    
    
    1,365Cash paid for severance and retention bonuses
    
    
    (5
    )
    
    
    (94
    )
    
    
    (161
    )
    
    
    (184
    )Ending liability
    
    $
    253
    
    
    $
    1,981
    
    
    $
    253
    
    
    $
    1,981
 Subsequent Events
   29




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 Overview
    30




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1A
 31




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##### Table of Contents



Quarterly Update
     ®
  32




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##### Table of Contents



®
  Subsequent Events
   33




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##### Table of Contents



Critical Accounting Policies
  Revenues
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,In thousands
    
    2009
    
    2008
    
    $ Change
    
    2009
    
    2008
    
    $ ChangeTarceva-related revenues
    
    $
    85,323
    
    
    $
    87,940
    
    
    $
    (2,617
    )
    
    $
    169,179
    
    
    $
    170,298
    
    
    $
    (1,119
    )Other revenues
    
    
    13,743
    
    
    
    7,714
    
    
    
    6,029
    
    
    
    23,564
    
    
    
    16,091
    
    
    
    7,473Total revenues
    
    $
    99,066
    
    
    $
    95,654
    
    
    $
    3,412
    
    
    $
    192,743
    
    
    $
    186,389
    
    
    $
    6,354
 Tarceva-Related Revenues
  Net Revenue from Unconsolidated Joint Business
  34




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Tarceva-Related Royalties
  Tarceva-Related Milestones
  35




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Other Revenues
  ® ® ® ®
  36




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##### Table of Contents



Expenses
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,In thousands
    
    2009
    
    2008
    
    $ Change
    
    2009
    
    2008
    
    $ ChangeCost of goods sold
    
    $
    2,659
    
    
    $
    2,061
    
    
    $
    598
    
    
    $
    4,853
    
    
    $
    4,231
    
    
    $
    622Research and development
    
    
    37,147
    
    
    
    30,406
    
    
    
    6,741
    
    
    
    72,583
    
    
    
    60,955
    
    
    
    11,628Selling, general and administrative
    
    
    25,187
    
    
    
    23,192
    
    
    
    1,995
    
    
    
    49,388
    
    
    
    47,723
    
    
    
    1,665Amortization of intangibles
    
    
    236
    
    
    
    636
    
    
    
    (400
    )
    
    
    464
    
    
    
    1,238
    
    
    
    (774
    )$
    65,229
    
    
    $
    56,295
    
    
    $
    8,934
    
    
    $
    127,288
    
    
    $
    114,147
    
    
    $
    13,141
 Cost of Goods Sold
  Research and Development
    37




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##### Table of Contents



Selling, General and Administrative
  Other Income and Expense
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,In thousands
    
    2009
    
    2008
    
    $ Change
    
    2009
    
    2008
    
    $ ChangeInvestment income-net
    
    $
    1,957
    
    
    $
    2,960
    
    
    $
    (1,003
    )
    
    $
    4,171
    
    
    $
    6,694
    
    
    $
    (2,523
    )Interest expense
    
    
    (6,392
    )
    
    
    (6,189
    )
    
    
    (203
    )
    
    
    (12,785
    )
    
    
    (12,494
    )
    
    
    (291
    )Other income
(expense)  net
    
    
    (2,338
    )
    
    
    (1,006
    )
    
    
    (1,332
    )
    
    
    (2,722
    )
    
    
    (1,906
    )
    
    
    (816
    )Total other income (expense)
    
    $
    (6,773
    )
    
    $
    (4,235
    )
    
    $
    (2,538
    )
    
    $
    (11,336
    )
    
    $
    (7,706
    )
    
    $
    (3,630
    )
   38




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Income taxes
  Discontinued Operations
  Liquidity and Capital Resources
   39




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##### Table of Contents



Commitments and Contingencies
  New Accounting Standards
 Recently Adopted Standards
     40




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##### Table of Contents



Recently Issued Standards (Not Yet Adopted)
   Forward Looking Statements
  41




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
       42




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##### Table of Contents



Item 4. Controls and Procedures
  Evaluation of Our Disclosure Controls and Procedures
 CEO/CFO Conclusions about the Effectiveness of the Disclosure Controls and Procedures
 Changes in Internal Control Over Financial Reporting.
 43




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
  We may incur risk in connection with the consolidation of our U.S. operations to Ardsley, New York.
  44




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  Votes For
    

Votes
WithheldRobert A. Ingram
    
    
    41,222,533
    
    
    
    7,066,261Colin Goddard, Ph.D.
    
    
    43,993,019
    
    
    
    4,295,775Santo J. Costa
    
    
    41,063,190
    
    
    
    7,225,604Joseph Klein, III
    
    
    42,937,429
    
    
    
    5,351,365Kenneth B. Lee, Jr.
    
    
    44,038,249
    
    
    
    4,250,545Viren Mehta
    
    
    34,174,019
    
    
    
    14,114,775David W. Niemiec
    
    
    44,022,511
    
    
    
    4,266,283Herbert M. Pinedo, M.D., Ph.D.
    
    
    41,919,113
    
    
    
    6,369,681Katharine B. Stevenson
    
    
    44,038,426
    
    
    
    4,250,368John P. White
    
    
    41,750,959
    
    
    
    6,537,835
  
 Item 5. Other Information
  
 Item 6. Exhibits
 3.1
    
    Restated Certificate of Incorporation of OSI Pharmaceuticals, Inc., filed by
the Company as an exhibit to the Form 10-K for the fiscal year ended September 30, 2001
(file no. 000-15190), and incorporated herein by reference.
 45




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##### Table of Contents



3.2
    
    Second Amended and Restated Bylaws of OSI Pharmaceuticals, Inc., filed by the
Company as an exhibit to the Form 10-K for the fiscal year ended December 31, 2008
(file no. 000-15190), and incorporated herein by reference.10.1
    
    Purchase and Sale Agreement, dated July 6, 2009, between OSI Pharmaceuticals,
Inc. and Millsaw Realty L.P. (Filed herewith)10.2*
    
    Consulting and Confidential Disclosure Agreement, dated June 30, 2009, between
OSI Pharmaceuticals, Inc. and Dr. Daryl Granner. (Filed herewith).10.3
    
    Agreement relating to Windrush Court, Oxford, dated May 29, 2009, between
Matrix Portfolio No. 1 Limited and Oxford Real Estate Owner No. 2 Limited. (Filed
herewith)31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or
15d-14(a). (Filed herewith)31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or
15d-14(a). (Filed herewith)32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350. (Filed
herewith)32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350. (Filed
herewith)
 
 *
    
    Indicates a management contract or compensatory plan, contract or arrangement in which
directors or executive officers participate. 46




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##### Table of Contents



SIGNATURES
  OSI PHARMACEUTICALS, INC.(Registrant)Date:  August 7, 2009
    /s/ Colin Goddard, Ph.D.Colin Goddard, Ph.D.Chief Executive OfficerDate:  August 7, 2009
    /s/ Pierre LegaultPierre LegaultExecutive Vice President, Chief 
Financial Officer and Treasurer
(Principal Financial Officer) 47




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit3.1
    
    Restated Certificate of Incorporation of OSI Pharmaceuticals, Inc., filed by
the Company as an exhibit to the Form 10-K for the fiscal year ended September 30, 2001
(file no. 000-15190), and incorporated herein by reference.3.2
    
    Second Amended and Restated Bylaws of OSI Pharmaceuticals, Inc., filed by the
Company as an exhibit to the Form 10-K for the fiscal year ended December 31, 2008
(file no. 000-15190), and incorporated herein by reference.10.1
    
    Purchase and Sale Agreement, dated July 6, 2009, between OSI Pharmaceuticals,
Inc. and Millsaw Realty L.P. (Filed herewith)10.2
    *
    Consulting and Confidential Disclosure Agreement, dated June 30, 2009, between
OSI Pharmaceuticals, Inc. and Dr. Daryl Granner. (Filed herewith).10.3
    
    Agreement relating to Windrush Court, Oxford, dated May 29, 2009, between
Matrix Portfolio No. 1 Limited and Oxford Real Estate Owner No. 2 Limited. (Filed
herewith)31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or
15d-14(a). (Filed herewith)31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or
15d-14(a). (Filed herewith)32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350. (Filed
herewith)32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350. (Filed
herewith)
 48