OSI resists Astellas and invites other offers
pharmafile | March 16, 2010 | News story | Sales and Marketing | Astellas, OSI, merger
A new takeover bid launched by Japanese pharma company Astellas for OSI Pharma has been rejected by the company’s board.
OSI’s executives say the $3.5 billion offer does not reflect the company’s ‘intrinsic value’, and has encouraged stockholders not to tender their shares.
OSI had already rejected several bids from Astellas stating that the Japanese company’s offers have undervalued its business.
Robert Ingram, chairman of the board of directors of OSI, commented: “After carefully analysing and considering Astellas’ offer, the board has unanimously concluded that the offer does not fully reflect OSI’s fundamental, intrinsic value. We believe that OSI is a unique asset – the only profitable, mid-cap biotech company with a growing, high quality and fully integrated oncology franchise and a strong diabetes and obesity franchise which also has a proven track-record of success.”
Aware that it may only be a matter of time before Astellas persuades its shareholders, OSI is now seeking bids from other potential buyers.
OSI specialises in treatments for diabetes and obesity, with oncology its largest disease area. Its biggest seller is cancer treatment Tarceva, which it markets in partnership with Roche. The drug earned $1.2 billion in sales in 2009, and OSI splits revenue of Tarceva equally with the Swiss pharma, as well as receiving royalties on sales outside the US.
Roche is the most obvious candidate to be a ‘white knight’ and buy OSI, although it is currently in the midst of reorganisation after completing its merger with Genentech, and may not value the company highly.
Astellas wants to acquire OSI to add to its oncology division and develop its pipeline portfolio, and will not want to lose out on a major acquisition for a second time. Last year it saw another company, CV Therapeutics, slip through its fingers after a $1.1billion takeover bid was foiled. CV Therapeutics resisted Astellas’ overtures, and was instead bought up by Gilead for $1.4 billion.
Astellas is Japan’s second-largest pharma company, but three of its most important products are due to lose patent protection over the next few years.
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