OSI Pharmaceuticals, Inc. (NASDAQ:OSIP) and AVEO Pharmaceuticals, Inc. today announced that they have expanded the drug discovery and translational research collaboration announced in October of 2007. The alliance is anchored around developing molecular targeted therapies to target the underlying mechanisms of epithelial-mesenchymal transition (EMT) in cancer and to develop proprietary datasets of associated patient selection biomarkers to support OSI’s targeted medicine pipeline. EMT is a process of emerging significance in tumor development and disease progression and the focal point of OSI’s proprietary oncology research efforts. The companies are expanding their efforts to validate cancer targets and to deploy key elements of AVEO’s proprietary translational research platform in support of OSI’s clinical development programs.

Under the terms of the expanded discovery and research agreement, OSI will pay AVEO a total of $20 million at closing, $5 million of which is an upfront cash payment and $15 million of which is the purchase of additional equity in AVEO. OSI will also provide AVEO research funding over the next two years to support the collaboration, and the potential to achieve additional royalties and milestones. In return, OSI will immediately receive rights beyond the original collaboration including rights to additional EMT targets (including up to 4 antibody targets) and increased access to AVEO technology (i.e. tumor models, archives and biomarkers). OSI is also acquiring non-exclusive access to AVEO’s proprietary bioinformatics platform. In addition, OSI will have the option to internalize key elements of AVEO’s proprietary technology platform including the Human Response Platform (HRP™) for the identification of novel EMT agents and proprietary patient selection biomarkers in support of OSI’s clinical development programs.

“Our initial collaboration with AVEO has convinced us that these platforms represent a valuable and integral component in our ongoing efforts to maintain our leadership position in exploiting the biology of EMT,” stated Colin Goddard, Ph.D., Chief Executive Officer of OSI Pharmaceuticals. “Expanding the collaboration fits squarely within our strategic plan to deliver a differentiated and powerful approach to the discovery, development and commercialization of novel new medicines for the treatment of cancer.”

“We are very pleased to expand our collaboration with OSI Pharmaceuticals, a clear leader in the development of oncotherapeutics,” stated Tuan Ha-Ngoc, president and chief executive officer of AVEO Pharmaceuticals. “This agreement demonstrates the unique insights and value AVEO’s novel cancer biology platform brings to cancer drug development.