The last vestige on Long Island of OSI Pharmaceuticals, a...

The last vestige on Long Island of OSI Pharmaceuticals, a laboratory in the Broad Hollow Bioscience Park at Farmingdale State College, will be closed and most of the staff laid off, the company said. OSI moved most of its operation from its Melville location a year ago. (May 13, 2013) Credit: Steve Pfost

OSI Pharmaceuticals, once the bright hope in Long Island's struggle to build a bioscience industry, is shuttering its remaining facility in the region and laying off all 115 of its local employees.

The announcement Monday by OSI's parent company, Astellas Pharma Inc., that it was walking away from laboratories at the Broad Hollow Bioscience Park in Farmingdale was an unexpected setback for those betting on high-tech startups for the region's economic future.

OSI has long been considered Long Island's biggest homegrown biotech success. And even after it was bought in 2010 by Japan-based Astellas, officials hoped it would help anchor the effort to nurture fledgling science companies here.

"This puts us back a couple of years," said Mark Lesko, executive director of Accelerate Long Island, an organization promoting the growth of technology-based startups.

OSI, which developed the lung-cancer drug Tarceva, told workers Monday morning that it was closing the facility, located on the campus of Farmingdale State College.

Most employees were dismissed immediately; a handful will stay to close the labs over the next four months, Astellas spokeswoman Jenny Kite said. The workers will receive severances and continue to be paid for 90 days in accordance with state law, Kite said.

The closure is part of a global consolidation at Astellas, which is also shuttering facilities in Silicon Valley and suburban Chicago, cutting a total of 200 jobs.

Without OSI as an anchor tenant, Farmingdale State is postponing plans to add a third building to the 102,500-square-foot bioscience park, school officials said.

While they lamented the company's departure, Lesko and others said it will ease Long Island's laboratory shortage, making it easier for startups outgrowing space at Cold Spring Harbor Laboratory and elsewhere. "We do not think we will have difficulty finding tenants," said Farmingdale State College president W. Hubert Keen.

Monday's news appears to end the long effort to keep OSI on Long Island.

Founded three decades ago, in part with technology from Cold Spring Harbor, the company's growth exploded after Tarceva was approved in 2004 by the U.S. Food and Drug Administration. By 2008, OSI had $380 million in sales and employed nearly 500 people at facilities in Melville, Farmingdale, New Jersey, Colorado and England.

The following year, however, OSI became frustrated as plans to expand the Farmingdale labs were delayed amid concerns about animal testing. The company announced it was trading its headquarters on Pinelawn Road in Melville for a campus in Westchester.

Before OSI could move, it was acquired for $4 billion by Astellas, which agreed to keep 90 jobs in Farmingdale.

In exchange for staying and expanding, OSI has received roughly $676,000 in county sales tax breaks and state economic development aid, which officials plan to demand back.

With Lisa Du

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