**Exhibit 99.1**     The following risk factors relating to the business of EyetechPharmaceuticals, Inc. were previously filed by OSI Pharmaceuticals,Inc. on October 6, 2005 at pages 25-37 of Amendment No. 1 toRegistration Statement on Form S-4 (file no. 333-128446).**Risks Relating To Eyetech**     *The following paragraphs describe certain risks relating toEyetech and its business. These risks should be read inconjunction with the risks relating to OSI’s business, manyof which will have applicability to the Eyetech business unit ofOSI following the merger.****Eyetech depends heavily on the success of its one product,Macugen, which it began selling in the United States inJanuary 2005.***     Macugen is Eyetech’s only commercial product. Macugen isapproved by the FDA for use in the treatment of neovascular AMD.Eyetech began selling Macugen in the United States in January2005. Its ability to continue generating product revenue in theforeseeable future will depend solely on Macugen sales. Thecommercial success of Macugen depends on several factors,including the following: •     continued acceptance of Macugen in the medical community, by    patients receiving therapy and by third party payors;  •     supplying sufficient quantities of Macugen to meet market demand;  •     successfully building and sustaining manufacturing capacity to    meet future demand;  •     the competitive landscape for approved and developing therapies    that will compete with Macugen;  •     Macugen’s efficacy and safety profile as demonstrated in a    broad patient population continuing to be consistent with that    shown in clinical trials;  •     receipt of marketing approvals from non-U.S. regulatory    authorities;  •     Eyetech’s ability to expand the indications for which    Eyetech can market Macugen;  •     continued positive data from Eyetech’s clinical trials;  •     implementation of Eyetech’s post-approval commitments to    the FDA in a timely fashion; and  •     the ability and willingness of clinicians and patients to    maintain continuous therapy at intervals every six weeks.***Eyetech depends heavily on its collaboration with PfizerInc., which involves a complex sharing of control overdecisions, responsibilities and costs and benefits. Any loss ofPfizer as a collaborator, or adverse development in thecollaboration, would materially harm Eyetech’sbusiness.***     In December 2002, Eyetech entered into its collaboration withPfizer to develop and commercialize Macugen for the preventionand treatment of diseases of the eye. The collaboration involvesa complex sharing of control over decisions, responsibilitiesand costs and benefits. For example, with respect to the sharingof costs and benefits, Pfizer co-promotes Macugen withEyetech in the United States and shares with it in profits andlosses. Outside the United States, Pfizer will commercializeMacugen pursuant to an exclusive license and pay Eyetech aroyalty on net sales. In addition, Pfizer generally is requiredto fund a majority of ongoing development costs incurredpursuant to an agreed upon development plan. Eyetech’scollaboration is governed by a joint operating committee,consisting of an equal number of representatives of Pfizer andEyetech who control decisions and responsibilities. There arealso subcommittees with equal representation from both partiesthat have responsibility over development, regulatory,manufacturing and commercialization matters.     Ultimate decision-making authority is vested in Eyetech as tosome matters and in Pfizer as to other matters. A third categoryof decisions requires the approval of both Pfizer and Eyetech.Outside the United States, ultimate decision-makingauthority as to most matters is vested in Pfizer. Pfizer mayterminate the collaboration relationship without cause upon sixto 12 months’ prior notice, depending on when suchnotice is given. Any loss of Pfizer as a collaborator in thedevelopment or commercialization of Macugen,
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dispute over the terms of, or decisions regarding, thecollaboration or other adverse development in Eyetech’srelationship with Pfizer would materially harm its business.     To continue commercial success of Macugen, Eyetech’s salesand marketing organization must continue to work with Pfizer toimplement its sales and marketing efforts. If they do not worktogether to implement their joint sales and marketing effortstheir business will materially suffer.***Eyetech faces substantial competition with respect tosales of Macugen and expects competition with respect to otherdrugs that it may develop or commercialize. Such competition mayresult in others discovering, developing or commercializingcompeting products before or more successfully than itdoes.***     The commercialization and development of new drugs is highlycompetitive. Eyetech faces competition with respect to Macugenand expects competition with respect to any products it maycommercialize or develop in the future from major pharmaceuticalcompanies, specialty pharmaceutical companies and biotechnologycompanies worldwide. Eyetech’s competitors may developproducts or other novel technologies that are more effective,safer or less costly than any that Eyetech is developing.Eyetech’s competitors may also obtain FDA or otherregulatory approval for their products more rapidly than Eyetechmay obtain approval for its products.     Macugen currently competes against two therapies for thetreatment of neovascular AMD: photodynamic therapy withverteporfin, which was developed by QLT, Inc. and is marketed byNovartis AG, and thermal laser treatment. PDT has also beencombined with off-label steroid treatment administered viaintravitreal injection. In the United States, PDT isFDA-approved only for the predominantly classic subtype ofneovascular AMD, which Eyetech estimates to represent up to 25%of the market for subfoveal neovascular AMD. In the EuropeanUnion, the only approved therapy is PDT, which is approved onlyfor the predominantly classic and occult subtypes. In the UnitedStates, however, the Centers for Medicare & MedicaidServices, or CMS, implemented a decision in April 2004 toprovide coverage for PDT to patients with neovascular AMD whohave occult and minimally classic lesions that are four discareas or less in size and show evidence of recent diseaseprogression, even though the FDA has not approved PDT for suchtreatment. The current therapies for the treatment of DME arethermal laser treatment and steroid treatment administered viaintravitreal injection, by physicians on an off-label basis.Unless additional therapies are approved, these existingtherapies would represent the principal competition for Macugenin neovascular AMD and, if Macugen is approved for DME.     Additional treatments for AMD and DME are in various stages ofpreclinical or clinical testing. If approved, these treatmentswould also compete with Macugen. Potential treatments in latestage clinical trials include drugs sponsored by a collaborationof Genentech and Novartis, Alcon, Inc., Allergan, Inc. throughits acquisition of Oculex Pharmaceuticals, Inc., Eli Lilly andCompany, Bausch & Lomb Incorporated, RegeneronPharmaceuticals, Inc., Miravant Medical Technologies, andGenaera Corporation. Some of the sponsors of these potentialproducts have announced favorable results from advanced clinicaltrials.     The Genentech/ Novartis collaboration is developing an anti-VEGFhumanized antibody fragment known asLucentistmfor intravitreal injection for which “fast track”designation from the FDA was denied. This product candidate maybe viewed as particularly competitive with Macugen because ofthe similarity of its mechanism of action and recently announcedresults from two clinical studies. Genentech announced thatresults from a Phase III clinical study ofLucentistmfor the treatment of minimally classic and occult subtypes ofneovascular AMD met its primary efficacy endpoint of maintainingvision in patients and showed, on average, improvement in visionfor treated patients over patients receiving a control regimenof a sham injection. Also, Genentech announced that preliminaryresults from a Phase I/II study ofLucentistmin combination with PDT for the treatment of predominantlyclassic subtype of neovascular AMD met its primary endpoint ofmaintaining vision and had, on average, a significantimprovement in visual acuity from baseline to 12 months.Additional results from clinical studies for this productcandidate are likely to be released later this year.     In addition, an anecdotal case series with off-label use ofGenentech’s product Avastin was recently reported. Avastinis the full-length antibody from which theLucentistmproduct candidate is derived. Off-label
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systemic and intravitreal administration of Avastin are beingexplored by clinicians for the treatment of patients withneovascular AMD. However, these physicians are not conductingformal randomized controlled trials.     In addition, in May 2005, Alcon announced that it received anapprovable letter from the FDA for its NDA for anecortaveacetate, an angiostatic compound, for the treatment ofpredominantly classic neovascular AMD patients. Alcon previouslyreceived fast track, Pilot 1 program designation for thiscompound and recently announced that it was working with the FDAto determine the steps required for approval. This compoundfeatures a less invasive injectable delivery and requires lessfrequent administration (every six months). Further, Alcon isenrolling patients in two additional Phase III clinicaltrials, one in South America and one in Europe, comparing thesafety and efficacy of Alcon’s compound against placebo inpatients with all subtypes of neovascular AMD.     Bausch & Lomb recently received FDA approval for adevice surgically implanted inside the eye which slowly releasesa dose of corticosteroid for use in the treatment of chronicnon-infectious uveitis. This device is also being developed forthe treatment of DME and neovascular AMD.     Eli Lilly recently completed a Phase III clinical trial inwhich its investigational drug, ruboxistaurin mesylate (proposedbrand nameArxxanttm)reduced the occurrence of vision loss in patients with diabeticretinopathy. As a result, Eli Lilly believes it is appropriateto submit a new drug application to the FDA at the end of 2005for the treatment of diabetic retinopathy, the initialindication for ruboxistaurin. An ongoing clinical trial todetermine the effect of ruboxistaurin on DME progression inpatients with less severe diabetic retinopathy is expected to becomplete in 2010.     Other laser, surgical or pharmaceutical treatments for AMD andDME may also compete against Macugen in AMD and, if Macugen isapproved for DME, in DME. Competitive therapies may affectproduct pricing even if Macugen is otherwise viewed as apreferable therapy. Future competitive products may havesuperior efficacy, improved safety and convenience or reducedfrequency of administration compared to Macugen. Because Macugenis currently Eyetech’s only approved product, any productthat arises with superior efficacy, improved safety andconvenience or reduced frequency of administration compared toMacugen may have a material adverse affect on Eyetech’sbusiness. Even the expectation that a competitive product maygain marketing approval to compete with Macugen may have anegative effect on the trading price of Eyetech’s commonstock.     Many of Eyetech’s competitors have substantially greaterfinancial, technical and human resources than it has. Additionalmergers and acquisitions in the pharmaceutical and biotechnologyindustries may result in even more resources being concentratedby Eyetech’s competitors. Competition may increase furtheras a result of advances made in the commercial applicability oftechnologies and greater availability of capital for investmentin these fields.***Eyetech’s product revenues are substantiallydependent on a limited number of wholesale distributors to whichit sells Macugen. Product revenues may fluctuate from quarter toquarter based on the buying patterns of thesedistributors.***     Eyetech sells Macugen primarily to three national pharmaceuticalwholesale distributors located throughout the United States:McKesson Specialty, Priority Healthcare and Besse Medical.Eyetech’s reliance on this small number of wholesalerscould cause revenues to fluctuate from quarter to quarter basedon the buying patterns of these wholesalers. In addition, if anyof these wholesalers fail to pay Eyetech on a timely basis or atall, its financial position and results of operations could bematerially adversely affected.***Eyetech may not be successful in its efforts to expand itsportfolio of products.***     A key element of Eyetech’s strategy is to commercialize aportfolio of new drugs in addition to Macugen. Eyetech isseeking to do so through its internal research programs andthrough licensing or otherwise acquiring the rights to potentialnew drugs and drug targets for the treatment of ophthalmic andother diseases.
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     A significant portion of the research that Eyetech is conductinginvolves new and unproven technologies. Research programs toidentify new disease targets and product candidates requiresubstantial technical, financial and human resources whether ornot Eyetech ultimately identifies any candidates. Eyetech’sresearch programs may initially show promise in identifyingpotential product candidates, yet fail to yield productcandidates for clinical development for a number of reasons,including: •     the research methodology used may not be successful in    identifying potential product candidates; or  •     potential product candidates may on further study be shown to    have harmful side effects or other characteristics that indicate    they are unlikely to be effective drugs.     Eyetech may be unable to license or acquire suitable productcandidates or products from third parties for a number ofreasons. In particular, the licensing and acquisition ofpharmaceutical products is a competitive area. A number of moreestablished companies are also pursuing strategies to license oracquire products in the ophthalmic and other fields. Theseestablished companies may have a competitive advantage overEyetech due to their size, cash resources and greater clinicaldevelopment and commercial capabilities. Other factors that mayprevent Eyetech from licensing or otherwise acquiring suitableproduct candidates include the following: •     Eyetech may be unable to license or acquire the relevant    technology on terms that would allow it to make an appropriate    return from the product;  •     companies that perceive Eyetech to be their competitors may be    unwilling to assign or license their product rights to Eyetech;    or  •     Eyetech may be unable to identify suitable products or product    candidates within its areas of expertise.     If Eyetech is unable to develop suitable potential productcandidates through internal research programs or by obtainingrights to novel therapeutics from third parties, its businesswill suffer.***Eyetech expects to depend on collaborations with thirdparties to develop and commercialize its products.***     Eyetech’s business strategy includes entering intocollaborations with corporate and academic collaborators for theresearch, development and commercialization of additionalproduct candidates, such as its collaborations with Pfizer andArchemix. These arrangements may not be scientifically orcommercially successful. The termination of these arrangementsmight adversely affect Eyetech’s ability to develop,commercialize and market its products.     The success of Eyetech’s collaboration arrangements willdepend heavily on the efforts and activities of itscollaborators. Eyetech’s collaborators will havesignificant discretion in determining the efforts and resourcesthat they will apply to these collaborations. The risks thatEyetech faces in connection with these collaborations, includingits collaboration with Pfizer, include the following: •     Eyetech’s collaboration agreements are, or are expected to    be, for fixed terms and subject to termination under various    circumstances, including, in many cases, on short notice without    cause;  •     Eyetech expects to be required in its collaboration agreements    not to conduct specified types of research and development in    the field that is the subject of the collaboration. These    agreements may have the effect of limiting the areas of research    and development that Eyetech may pursue, either alone or in    cooperation with third parties;  •     Eyetech’s collaborators may develop and commercialize,    either alone or with others, products and services that are    similar to or competitive with its products that are the subject    of the collaboration with it; and  •     Eyetech’s collaborators may change the focus of their    development and commercialization efforts. Pharmaceutical and    biotechnology companies historically have re-evaluated their    priorities following mergers and consolidations, which have been    common in recent years in these industries. The ability of
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     Eyetech’s products to reach their potential could be    limited if its collaborators decrease or fail to increase    spending relating to such products.     Collaborations with pharmaceutical companies and other thirdparties often are terminated or allowed to expire by the otherparty. Such terminations or expirations can adversely affectEyetech financially as well as harm its business reputation.***Eyetech may not be successful in establishing additionalcollaborations, which could adversely affect its ability todevelop and commercialize products and services.***     An important element of Eyetech’s business strategy isentering into collaborations for the development andcommercialization of products when it believes that doing sowill maximize product value. If Eyetech is unable to reachagreements with suitable collaborators, it may fail to meet itsbusiness objectives for the affected product or program. Eyetechfaces significant competition in seeking appropriatecollaborators. Moreover, these collaboration arrangements arecomplex to negotiate and time consuming to document. Eyetech maynot be successful in its efforts to establish additionalcollaborations or other alternative arrangements. The terms ofany additional collaborations or other arrangements that Eyetechestablishes may not be favorable to it. Moreover, thesecollaborations or other arrangements may not be successful.***Eyetech currently has no operational manufacturingfacilities for Macugen and a limited number of manufacturingpersonnel. Eyetech depends on third parties to manufactureMacugen. If these manufacturers fail to meet its requirements,Eyetech’s product development and commercialization effortsmay be materially harmed.***     Eyetech has a limited number of personnel with experience incommercial manufacturing, and it does not own or lease anyfacilities that currently manufacture Macugen or any componentof Macugen. In November 2004, Eyetech acquired a manufacturingfacility in Boulder, Colorado that it plans to develop to use asa second source of supply for the API of Macugen, but thatfacility is not currently operational for such purpose.Accordingly, unless or until Eyetech develops or acquiresmanufacturing capabilities, it will depend on third parties tomanufacture Macugen and any future products that it may develop.     Eyetech relies on separate single sources for the API used inMacugen, the fill and finish for the finished drug product andthe PEGylation reagent. There is no assurance that thesemanufacturers will continue to produce an uninterrupted supplyof material to meet Eyetech’s requirements. Other sourcesfor these products and services could be available to Eyetech,but may be available on terms less favorable to it and may delayits manufacturing activities.     Eyetech believes it will have sufficient capacity to supply theAPI and to manufacture Macugen to meet anticipated demandthrough the first quarter of 2007. In order to sustain Macugensupply at the quantities Eyetech believes it will be necessaryto meet anticipated future market demand, Eyetech and itscontract manufacturer will need to increase the manufacturingcapacity for the API of Macugen. Eyetech initially intends toincrease manufacturing capacity for the API of Macugen at itscontract manufacturing facility. Eyetech has also begun toinvest in its Boulder site to prepare the facility to become asecond source for commercial scale production of the API ofMacugen.     In addition, Eyetech is currently working to increase thecapacity for finished product manufacturing at the third partycontract manufacturer’s facility. Eyetech has alsocommitted to, and has begun to, modify its finished productmanufacturing and packaging operation in accordance with FDApost-approval requirements at its third party fill and finishcontractor’s facility. Some of these improvements requirethe use of newer technologies, and may increase the demand forAPI. If Eyetech is unable to increase its manufacturing capacityor is delayed in doing so, it may not be able to produce Macugenin a sufficient quantity of the product to meet anticipatedfuture demand. In addition, the cost of increasing manufacturingcapacity may be expensive. Eyetech’s revenues and grossmargins could be adversely affected by any inability to meetdemand and by the increased cost in increasing manufacturingcapacity.
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     Reliance on third party manufacturers entails risks to whichEyetech would not be subject if it manufactured products itself,including: •     reliance on the third party manufacturers for regulatory    compliance and quality assurance;  •     the possible breach of the manufacturing agreement by the third    party because of factors beyond its control; and  •     the possibility of termination or non-renewal of the agreement    by the third party, based on its own business priorities, at a    time that is costly or inconvenient for Eyetech.***The manufacture and packaging of pharmaceutical productssuch as Macugen are subject to the requirements of the FDA andsimilar foreign regulatory bodies. If Eyetech or its third partymanufacturers fails to satisfy these requirements, its productdevelopment and commercialization efforts may be materiallyharmed.***     The manufacture and packaging of pharmaceutical products, suchas Macugen and Eyetech’s future product candidates, areregulated by the FDA and similar foreign regulatory bodies andmust be conducted in accordance with the FDA’s current goodmanufacturing practices and comparable requirements of foreignregulatory bodies. There are a limited number of manufacturersthat operate under these current good manufacturing practicesregulations who are both capable of manufacturing Macugen andwilling to do so. Failure by Eyetech (including in connectionwith the development of its Boulder manufacturing facility) orits third party manufacturers to comply with applicableregulations, requirements, or guidelines could result insanctions being imposed on it, including fines, injunctions,civil penalties, failure of regulatory authorities to grantmarketing approval of its products, delays, suspension orwithdrawal of approvals, license revocation, seizures or recallsof product, operating restrictions and criminal prosecutions,any of which could significantly and adversely affectEyetech’s business. For example, as part of the applicationfiled by Pfizer for the use of Macugen in the treatment ofneovascular AMD in Europe, the facilities used at each stage ofthe manufacturing process for Macugen were inspected andapproved by the European regulatory authorities.     Changes in the manufacturing process or procedure, including achange in the location where the product is manufactured or achange of a third party manufacturer, require prior FDA reviewand/or approval of the manufacturing process and procedures inaccordance with the FDA’s current good manufacturingpractices. This review may be costly and time consuming andcould delay or prevent the launch of a product or the use of afacility to manufacture a product. For example, if after thedevelopment of Eyetech’s Boulder manufacturing facility, itmoves the manufacturing of the API for Macugen to its facilityin Boulder and it cannot establish, to the satisfaction of theFDA, that the products manufactured at the new site arecomparable to those manufactured at the initial site, Eyetechmay not obtain or may be delayed in obtaining approval tomanufacture the API in Boulder. In addition, if it elects tomanufacture products at the facility of another third party,Eyetech would need to ensure that the new facility and themanufacturing process are in substantial compliance with currentgood manufacturing practices. Any such change in facility wouldbe subject to a pre-approval inspection by the FDA and the FDAwould again require Eyetech to demonstrate productcomparability. Foreign regulatory agencies have similarrequirements.     The FDA and similar foreign regulatory bodies may also implementnew standards, or change their interpretation and enforcement ofexisting standards and requirements, for manufacture, packagingor testing of products at any time. If it is unable to comply,it may be subject to regulatory, civil actions or penaltieswhich could significantly and adversely affect its business. Forexample, as a result of a post-approval commitment to the FDA toimprove the control and environment for Eyetech’s finisheddrug product, it may need to change the final presentation orpackaging for Macugen. Such a change may lead to an increase incost of goods.
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***Macugen and Eyetech’s other potential products maynot be commercially viable if Eyetech fails to obtain anadequate level of reimbursement for these products by Medicareand other third party payors. The markets for Eyetech’sproducts may also be limited by the indications for which theiruse may be reimbursed or the frequency in which they may beadministered.***     The availability and levels of reimbursement by governmental andother third party payors affect the market for products such asMacugen and others that Eyetech may develop. These third partypayors continually attempt to contain or reduce the costs ofhealthcare by challenging the prices charged for medicalproducts and services. In some foreign countries, particularlyCanada and the countries of the European Union, the pricingof prescription pharmaceuticals is subject to governmentalcontrol. In these countries, pricing negotiations withgovernmental authorities can take six to twelve months or longerafter the receipt of regulatory marketing approval for aproduct. To obtain reimbursement or pricing approval in somecountries, Eyetech may be required to conduct a clinical trialthat compares the cost-effectiveness of its products, includingMacugen, to other available therapies. If reimbursement for itsproducts is unavailable or limited in scope or amount or ifpricing is set at unsatisfactory levels, Eyetech’s businesscould be materially harmed.     Because most persons suffering from neovascular AMD are elderly,Eyetech expects that coverage for Macugen in the United Stateswill be primarily through the Medicare program. Although drugsthat are not usually self-administered are ordinarily covered byMedicare, the Medicare program has taken the position that itcan decide not to cover particular drugs if it determines thatthey are not “reasonable and necessary” for Medicarebeneficiaries. Limitations on coverage could also be imposed atthe local Medicare carrier level or by fiscal intermediaries. InFebruary 2005, CMS determined that, effective January 1,2005, Macugen’s Medicare reimbursement will be averagesales price plus six percent. By February 28, 2005,Medicare carriers of all 50 states confirmed Macugenreimbursement, according to the FDA label, without restrictions.However, Eyetech’s business could be materially adverselyaffected if the Medicare program, local Medicare carriers orfiscal intermediaries were to subsequently make a determinationto deny or limit the reimbursement of Macugen. Eyetech’sbusiness also could be adversely affected if physicians are notreimbursed by Medicare for the cost of the procedure in whichthey administer Macugen on a basis satisfactory to theadministering physicians. Also, if the local contractors thatadminister the Medicare program are slow to reimburse physiciansfor Macugen, the demand for Macugen may decrease andEyetech’s business could be adversely affected.     Eyetech also will need to obtain approvals for reimbursement ofMacugen from private insurers, including managed careorganizations. Eyetech expects that private insurers willconsider the efficacy, cost-effectiveness and safety of Macugenin determining whether and at what level to approvereimbursement for Macugen therapy. Obtaining these approvals canbe a time consuming and expensive process. Eyetech’sbusiness would be materially adversely affected if it did notreceive approval for reimbursement of Macugen from privateinsurers on a satisfactory basis.     Eyetech’s business could also be adversely affected if theMedicare program or other reimbursing bodies or payors limit theindications for which Macugen will be reimbursed to a smallerset than it believes is effective in treating or establish alimitation on the frequency with which Macugen may beadministered that is less often than Eyetech believes would beeffective.     Eyetech expects to experience pricing pressures in connectionwith the sale of Macugen and its future products due to thetrend toward programs aimed at reducing healthcare costs, theincreasing influence of health maintenance organizations andadditional legislative proposals.***The 2003 Medicare prescription drug coverage legislation,The Medicare Prescription Drug Improvement and ModernizationAct, or the MMA, and future legislative or regulatory reform ofthe healthcare system may affect Eyetech’s ability to sellits products profitably.***     In both the United States and some non-U.S. jurisdictions,there have been a number of legislative and regulatory proposalsto change the healthcare system in ways that could affectEyetech’s ability to sell its products profitably. In theUnited States, new legislation may be proposed at the federaland state levels that would result in significant changes to thehealthcare system, either nationally or at the state level.Effective
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January 2004, the MMA changed the methodology used to calculatereimbursement for drugs such as Macugen that are administered inphysicians’ offices in a manner intended to reduce theamount that is subject to reimbursement. In addition, beginningin January 2006, the legislation directs the Secretary of HHS tocontract with procurement organizations to purchasephysician-administered drugs from the manufacturers and providesphysicians with the option to obtain drugs through theseorganizations as an alternative to purchasing from themanufacturers, which some physicians may find advantageous.These changes may also cause private insurers to reduce theamounts that they will pay for physician-administered drugs. Inaddition, CMS, the agency within HHS that administers Medicareand is responsible for reimbursement of the cost of Macugen, hasasserted the authority of Medicare not to cover particular drugsif it determines that they are not “reasonable andnecessary” for Medicare beneficiaries or to cover them at alesser rate, comparable to that for drugs already reimbursedthat CMS considers to be therapeutically comparable. Furtherfederal and state proposals and healthcare reforms are likely.Eyetech’s results of operations could be materiallyadversely affected by the Medicare prescription drug coveragelegislation, by the possible effect of this legislation onamounts that private insurers will pay and by other healthcarereforms that may be enacted or adopted in the future.***Eyetech faces the risk of product liability claims and maynot have adequate insurance coverage.***     Eyetech’s business exposes it to the risk of productliability claims that is inherent in the manufacturing, testingand marketing of drugs and related products. Claims that one ormore of Eyetech’s products harms people, regardless of themerits, could be costly, divert its management’s attentionand adversely affect its reputation and demand for its products.     Eyetech currently has product liability insurance that coversliability arising from its clinical trials and product sold upto a $20 million annual aggregate limit. Insurance coverageis increasingly expensive. Eyetech may not have and it may notbe able to maintain adequate protection against potentialliabilities. If Eyetech is unable to maintain insurance atacceptable cost or otherwise protect against potential productliability claims, it will be exposed to significant liabilities,which may materially and adversely affect its business andfinancial position. These liabilities could prevent or interferewith its product development and commercialization efforts.***Eyetech depends on third parties in the conduct of itsclinical trials for Macugen and any failure of those parties tofulfill their obligations could adversely affect Eyetech’sdevelopment and commercialization plans.***     Eyetech depends on independent clinical investigators, contractresearch organizations and other third party service providersin the conduct of its ongoing clinical trials for Macugen andexpects to do so with respect to other product candidates.Eyetech relies heavily on these parties for successful executionof its clinical trials, but does not control many aspects oftheir activities. For example, the clinical investigators arenot Eyetech employees. However, Eyetech is responsible forensuring that each of its clinical trials is conducted inaccordance with the general investigational plan, protocols andregulatory standards for good clinical practice for the trial.Third parties may not complete activities on schedule, or maynot conduct Eyetech’s clinical trials in accordance withregulatory requirements or its stated protocols. The failure ofthese third parties to carry out their obligations could delayor prevent the development and commercialization of additionalindications for Macugen and future product candidates.***If Eyetech’s clinical trials generate data that arenot as favorable as historical data, Eyetech’s clinicaltrials are viewed as unsuccessful, or if Eyetech experiencessignificant delays in these trials, its ability to furthercommercialize Macugen and its future product candidates will beimpaired.***     Eyetech must provide the FDA and similar foreign regulatoryauthorities with preclinical and clinical data that demonstratethat its product candidates are safe and effective for eachtarget indication before they can be approved for commercialdistribution. The preclinical testing and clinical trials of anyproduct candidates that Eyetech develops must comply withregulations by numerous federal, state and local governmentauthorities in the United States, principally the FDA, and bysimilar agencies in other countries.
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Clinical development is a long, expensive and uncertain processand is subject to delays. Eyetech may encounter delays orrejections based on its inability to enroll or keep enrolledenough patients to complete its clinical trials, especially asnew competitors are approved to enter into the market. Patientenrollment depends on many factors, including the size of thepatient population, the nature of the trial protocol, theproximity of patients to clinical sites and the eligibilitycriteria for the study.     Although Eyetech has not to date experienced any significantdelays in enrolling clinical trial patients for its ongoingclinical trials, delays in patient enrollment for future trialsmay result in increased costs and delays, which could have aharmful effect on its ability to develop products. For example,Eyetech is enrolling patients in a Phase II clinical trialfor the use of Macugen in the treatment of RVO, a Phase IVcombination trial with Macugen and Visudyne versus Macugen aloneand a Phase II/ III pivotal trial with Macugen in thetreatment of DME. Eyetech may also commence additional clinicaltrials.     It may take several years to complete the testing of a product,and failure can occur at any stage of testing. For example: •     interim results of preclinical or clinical studies are not    necessarily predictive of their final results, and acceptable    results in early studies might not be seen in later studies, in    large part because earlier phases of studies are often conducted    on smaller groups of patients than later studies, and without    the same trial design features, such as randomized controls and    long-term patient follow-up and analysis;  •     potential products that appear promising at early stages of    development may ultimately fail for a number of reasons,    including the possibility that the products may be ineffective,    less effective than products of Eyetech’s competitors or    cause harmful side effects;  •     any preclinical or clinical test may fail to produce results    satisfactory to the FDA or foreign regulatory authorities;  •     preclinical and clinical data can be interpreted in different    ways, which could delay, limit or prevent regulatory approval;  •     negative or inconclusive results from a preclinical study or    clinical trial or adverse medical events during a clinical trial    could cause a preclinical study or clinical trial to be repeated    or a program to be terminated, even if other studies or trials    relating to the program are successful;  •     the FDA can place a hold on a clinical trial if, among other    reasons, it finds that patients enrolled in the trial are or    would be exposed to an unreasonable and significant risk of    illness or injury;  •     Eyetech may encounter delays or rejections based on changes in    regulatory agency policies during the period in which it    develops a drug or the period required for review of any    application for regulatory agency approval;  •     Eyetech’s clinical trials may not demonstrate the safety    and efficacy needed for its products to receive regulatory    approval; and  •     Eyetech’s FDA-required post-marketing safety trials may    identify new, more frequent, or more serious adverse events than    those previously characterized, which may limit product    acceptance.     In addition, as part of the drug approval process, Eyetech mustconduct a comprehensive assessment of the carcinogenic, orcancer causing, potential of its product candidates.Eyetech’s testing of Macugen to date indicates that theproduct’s carcinogenic potential is low. As part ofEyetech’s approval process with the FDA for the use ofMacugen in the treatment of neovascular AMD, Eyetech was notrequired to conduct further carcinogenicity testing of Macugen.Eyetech does not currently anticipate that it will be requiredto conduct additional carcinogenicity testing of Macugen priorto any approval of Macugen’s use in the treatment of DME.     If Eyetech is required to conduct additional clinical trials orother studies of Macugen for use in the treatment of DME or RVObeyond those that it currently contemplates, if it is unable tosuccessfully complete its clinical trials or other studies or ifthe results of these trials or studies are not positive or areonly modestly
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positive, Eyetech may be delayed in obtaining marketing approvalfor Macugen for such indications, Eyetech may not be able toobtain marketing approval for such indications or it may obtainapproval that is not as broad as intended. Eyetech’sproduct development costs will also increase if it experiencesdelays in testing or approvals. Significant clinical trialdelays could allow its competitors to bring products to marketbefore it does and impair its ability to commercialize itsproducts or potential products. If any of this occurs,Eyetech’s business will be materially harmed.     Furthermore, Eyetech’s future products may not beeffective, may be only moderately effective or may prove to haveundesirable or unintended side effects, toxicities or othercharacteristics that may preclude Eyetech’s obtainingregulatory approval or prevent or limit commercial use, whichcould have a material adverse effect on Eyetech’s business.The FDA and other regulatory authorities may not approve anyfuture product that Eyetech may develop. The FDA may not approveMacugen for any additional indications.***The “fast track” designation for development ofMacugen in DME may not actually lead to a faster development orregulatory review or approval process.***     If a drug candidate is intended for the treatment of a seriousor life-threatening condition and the drug candidatedemonstrates the potential to address unmet medical needs forthis condition, the drug candidate sponsor may apply for FDA“fast track” designation. The fast trackclassification does not apply to the candidate alone, butapplies to the combination of the candidate and the specificindication or indications for which it is being studied. TheFDA’s fast track programs are designed to facilitate theclinical development and evaluation of the drug candidate’ssafety and efficacy for the fast track indication orindications. Marketing applications filed by sponsors ofproducts in fast track development may qualify for expeditedreview under policies or procedures offered by the FDA, but thefast track designation does not assure such qualification.     Eyetech obtained, and received marketing approval from the FDAafter, a fast track designation from the FDA for Macugen in thetreatment of neovascular AMD. Eyetech also has a fast trackdesignation from the FDA for Macugen in the treatment of DME.However, Eyetech’s fast track designation with respect toDME may be withdrawn by the FDA if it believes that thedesignation is no longer supported by data from Eyetech’sclinical development program. Further, Eyetech may notexperience a faster development process, review or approval withrespect to any application it may file with respect to the useof Macugen in the treatment of DME compared to conventional FDAprocedures.***Eyetech may not be able to obtain marketing approval forany other product resulting from its development efforts.Failure to obtain additional approvals could materially harm itsbusiness.***     The use of Macugen for the treatment of indications other thanneovascular AMD and other products that Eyetech is developing ormay develop in the future will require additional research anddevelopment and regulatory approval prior to commercial launch.The research and development work that Eyetech must perform willinclude extensive preclinical studies and clinical trials.Eyetech will be required to obtain an investigational new drugapplication, or IND, prior to initiating human clinical trialsin the United States and must obtain regulatory approval priorto any commercial distribution. This process is expensive,uncertain and lengthy, often taking a number of years until aproduct is approved for commercial distribution. While Eyetechhas received regulatory approval to market Macugen in the UnitedStates for use in the treatment of neovascular AMD, failure toobtain required regulatory approvals for other uses of Macugenor for other products could materially harm its business.     Eyetech may need to successfully address a number oftechnological challenges in order to complete the development ofMacugen for other indications or any of its future products,such as manufacturing process validation and productspecification testing.     In addition, administration of a drug via intravitreal injectionis a new method for the potentially long-term treatment ofchronic eye disease. As a result, as Eyetech experienced withthe FDA prior to the approval of Macugen in the United States,regulatory agencies may apply new standards for safety,manufacturing, packaging and distribution of drugs using thismode of administration. It may be time consuming or expensive
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for Eyetech to comply with these standards.Non-U.S. regulatory authorities may also apply newstandards, which may preclude Macugen from being approved inother jurisdictions. This could also increase Eyetech’scommercialization costs, possibly materially.     Furthermore, Eyetech’s future products may not beeffective, may be only moderately effective or may prove to haveundesirable or unintended side effects, toxicities or othercharacteristics that may preclude Eyetech’s obtainingregulatory approval or prevent or limit commercial use, whichcould have a material adverse effect on its business. The FDAand other regulatory authorities may not approve any productthat Eyetech develops.***Macugen and any future products could be subject torestrictions or withdrawal from the market and Eyetech may besubject to penalties if it fails to comply with regulatoryrequirements, or if it experiences unanticipated problems withits products after approval.***     Macugen, or any other product for which Eyetech obtainsmarketing approval, along with the manufacturing processes,post-approval clinical data, advertising and promotionalactivities for such product, will be subject to continuingrequirements, review and periodic inspections by the FDA andother regulatory bodies. Even if regulatory approval of aproduct is granted, such as the FDA’s approval of Macugenin December 2004 for the treatment of neovascular AMD, theapproval may be subject to limitations on the indicated uses forwhich the product may be marketed or to the conditions ofapproval, or contain requirements for costly post-marketingtesting and surveillance to monitor the safety or efficacy ofthe product. For example, as part of the FDA’s approval ofMacugen for use in the treatment of neovascular AMD, the FDAasked Eyetech to: •     provide subsequent information on the potential degenerative    effects on the neurosensory retina based on a study of at least    two years and adverse effects on the corneal endothelium based    on a study of at least one year;  •     provide safety and efficacy data from a clinical study of at    least two years of at least two additional doses of Macugen    below the approved dose of 0.3 mg for neovascular    AMD; and  •     strengthen controls relative to the Macugen packaging components    and operations.     Furthermore, new information may arise from Eyetech’songoing or new clinical trials or continuing analysis of thedata from Eyetech’s clinical trials that may be viewed asless favorable than previous data.     Later discovery of previously unknown problems withEyetech’s products, manufacturer or manufacturingprocesses, or failure to comply with regulatory requirements,such as the post-approval commitments outlined above, may resultin: •     restrictions on such products or manufacturing processes;  •     withdrawal of the products from the market;  •     voluntary or mandatory recall;  •     fines;  •     suspension of regulatory approvals;  •     requests from the FDA or other agencies for additional    information from Eyetech or data from additional clinical trials;  •     product seizure; and  •     injunctions or the imposition of civil or criminal penalties.     Eyetech may be slow to adapt, or it may never adapt, to changesin existing regulatory requirements or adoption of newregulatory requirements or policies.
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***Failure to obtain regulatory approval in foreignjurisdictions would prevent Eyetech from marketing its productsabroad.***     Eyetech intends to have its products marketed outside the UnitedStates. In order to market its products in the European Unionand many other non-U.S. jurisdictions, Eyetech must obtainseparate regulatory approvals and comply with numerous andvarying regulatory requirements. In the case of Macugen, Pfizerhas responsibility to obtain regulatory approvals outside theUnited States, and Eyetech depends on Pfizer to obtain theseapprovals. Pfizer has filed new drug applications for Macugenwith the EMEA, which covers 25 countries. Applications are alsocurrently pending in an additional eight countries. The approvalprocedure varies among countries and can involve additionaltesting. The time required to obtain approval may differ fromthat required to obtain FDA approval. The foreign regulatoryapproval process may include all of the risks associated withobtaining FDA approval. Eyetech may not obtain foreignregulatory approvals on a timely basis, if at all. Approval bythe FDA does not ensure approval by regulatory authorities inother countries, and approval by one foreign regulatoryauthority does not ensure approval by regulatory authorities inother foreign countries or by the FDA. Eyetech and itscollaborators may not be able to file for regulatory approvalsand may not receive necessary approvals to commercialize itsproducts in any market. The failure to obtain these approvalscould materially adversely affect Eyetech’s business,financial condition and results of operations.***If Eyetech is unable to obtain and maintain protection forthe intellectual property incorporated into its products, thevalue of Eyetech’s technology and products will beadversely affected.***     Eyetech’s success will depend in large part on its abilityor the ability of its licensors to obtain and maintainprotection in the United States and other countries for theintellectual property incorporated into its products. The patentsituation in the field of biotechnology and pharmaceuticalsgenerally is highly uncertain and involves complex legal andscientific questions. Neither Eyetech nor its licensors may beable to obtain additional issued patents relating to itstechnology. Even if issued, patents may be challenged, narrowed,invalidated, or circumvented, which could limit Eyetech’sability to stop competitors from marketing similar products orlimit the length of term of patent protection Eyetech may havefor its products. In addition, Eyetech’s patents and itslicensors’ patents also may not afford Eyetech protectionagainst competitors with similar technology. Because patentapplications in the United States and many foreign jurisdictionsare typically not published until 18 months after filing,or in some cases not at all, and because publications ofdiscoveries in the scientific literature often lag behind actualdiscoveries, neither Eyetech nor its licensors can be certainthat Eyetech or they were the first to make the inventionsclaimed in issued patents or pending patent applications, orthat Eyetech or they were the first to file for protection ofthe inventions set forth in these patent applications.***If Eyetech fails to comply with its obligations in theagreements under which it licenses development orcommercialization rights to products or technology from thirdparties, Eyetech could lose license rights that are important toits business.***     Eyetech is a party to a number of technology licenses that areimportant to its business and expect to enter into additionallicenses in the future. For example, Eyetech holds licenses fromGilead Sciences, Nektar Therapeutics and IsisPharmaceuticals under patents relating to Macugen. Theselicenses impose various commercialization, milestone payment,royalty, insurance and other obligations on Eyetech. If Eyetechfails to comply with these obligations, the licensor may havethe right to terminate the license, in which event Eyetech wouldnot be able to market products, such as Macugen, that may becovered by the license.***If Eyetech is unable to protect the confidentiality of itsproprietary information and know-how, the value of itstechnology and products could be adversely affected.***     In addition to patented technology, Eyetech relies uponunpatented proprietary technology, processes, and know-how.Eyetech seeks to protect this information in part byconfidentiality agreements with its employees, consultants andthird parties. These agreements may be breached, and Eyetech maynot have
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adequate remedies for any such breach. In addition,Eyetech’s trade secrets may otherwise become known or beindependently developed by competitors.***Third parties may own or control patents or patentapplications that could be determined to be infringed byEyetech’s technologies, drug targets or potential products.This could cause Eyetech to become involved in expensive patentlitigation or other proceedings, which could result in Eyetechincurring substantial costs and expenses and liability fordamages. This could also require Eyetech to seek licenses, whichcould increase its development and commercialization costs. Ineither case, this could require Eyetech to stop some of itsdevelopment and commercialization efforts.***     Eyetech may not have rights under some patents or patentapplications that could be determined to be infringed bytechnologies that it uses in its research, drug targets thatEyetech selects or product candidates that it seeks to developand commercialize. Third parties may own or control thesepatents and patent applications in the United States and abroad.These third parties could bring claims against Eyetech or itscollaborators that would cause Eyetech to incur substantialexpenses and, if successful against Eyetech, could cause it topay substantial damages. Further, if a patent infringement suitwere brought against Eyetech or its collaborators, Eyetech orthey could be forced to stop or delay research, development,manufacturing or sales of the product or product candidate thatis the subject of the suit.     As a result of patent infringement claims, or in order to avoidpotential claims, Eyetech or its collaborators may choose toseek, or be required to seek, a license from the third party andwould most likely be required to pay license fees or royaltiesor both. These licenses may not be available on acceptableterms, or at all. Even if Eyetech or its collaborators were ableto obtain a license, the rights may be nonexclusive, which wouldgive Eyetech’s competitors access to the same intellectualproperty. Ultimately, Eyetech could be prevented fromcommercializing a product, or be forced to cease some aspect ofits business operations if, as a result of actual or threatenedpatent infringement claims, Eyetech or its collaborators areunable to enter into licenses on acceptable terms. This couldharm Eyetech’s business significantly.     There has been substantial litigation and other proceedingsregarding the patent and other intellectual property rights inthe pharmaceutical and biotechnology industries. In addition tothe possibility of infringement claims against it, Eyetech maybecome a party to other patent litigation and other proceedings,including interference proceedings declared by the U.S. Patentand Trademark Office and opposition proceedings in the EuropeanPatent Office, regarding intellectual property rights withrespect to its products and technology. The cost to Eyetech ofany patent litigation or other proceeding, even if resolved inits favor, could be substantial. Some of Eyetech’scompetitors may be able to sustain the costs of such litigationor proceedings more effectively than Eyetech can because oftheir substantially greater financial resources. Uncertaintiesresulting from the initiation and continuation of patentlitigation or other proceedings could have a material adverseeffect on Eyetech’s ability to compete in the marketplace.Patent litigation and other proceedings may also absorbsignificant management time.
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