OSI Pharmaceuticals Inc.'s (OSIP) board has rejected Japan
drugmaker Astellas Pharma Inc.'s (4503.TO, ALPMY) $3.5 billion
takeover bid, saying the $52-a-share price is too low.
Shares were up 1% at $58.25 premarket. Astellas' U.S.-traded
shares weren't active premarket after closing Friday at $36.76.
OSI had brushed aside overtures from Astellas for more than a
year, also calling them too low, before Japan's second-biggest
pharmaceutical company by sales made its hostile-takeover proposal
earlier this month.
OSI Chairman Robert A. Ingram said Monday the latest offer fails
to "fully reflect OSI's fundamental, intrinsic value." He said OSI
is the only profitable, mid-cap biotech company with a growing,
high quality and fully integrated oncology franchise and a strong
diabetes and obesity franchise, making it a unique asset.
He also said the board "takes its fiduciary duties seriously and
will continue to do what's right for OSI stockholders."
Astellas also filed a lawsuit against OSI and its directors when
it made its hostile tender offer, seeking to stop them from getting
in the offer's way. That included an effort to prevent the board
from applying OSI's shareholder rights plan, a so-called poison
pill, as Astellas argued that any such move would be "inconsistent
with the directors' fiduciary duties."
OSI's only marketed product is cancer drug Tarceva, which it
sells with Swiss drug giant Roche Holding AG (ROG.VX, RHHBY). The
drug generates more than $1 billion in annual sales. OSI evenly
splits U.S. profits from the drug with Roche, but receives
royalties on sales outside of the U.S.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com