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Astellas agrees on a 'sweeter' OSI buy
By Yumiko Nishitani |
May 18, 2010, Tuesday
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Print Edition
Print Edition
ASTELLAS Pharma, Japan's No. 2 drug maker, has agreed to buy United States biotech OSI Pharmaceuticals for US$4 billion in cash in a sweetened bid that will add OSI cancer drug Tarceva to its line-up.
Astellas, the third-biggest in Japan, has been chasing the deal as it seeks to bolster a nascent cancer drug business as a future earnings pillar amid falling earnings in its core, transplant and urinary therapeutic areas.
Astellas, known for its urinary drug Flomax and transplant drug Prograf, wants OSI to boost its American profile and oncology presence as it faces generic competition for these flagship drugs which recently lost patent protection in the US.
Astellas will pay US$57.50 per OSI share, 11 percent more than a previously proposed US$52. The new price represents a 55 percent premium to OSI's last closing price before Astellas launched its hostile bid on March 1.
"It's positive that it was cheaper than some market expectations of over US$60 a share, but it will take a while for Astellas to generate synergies from the acquisition," said Atsushi Seki, a drugs analyst at Barclays Capital.
OSI shares closed up 4.4 percent at US$59.80 last Friday in the US, leaving uncertainty over the response of some shareholders.
"As for how many shares we may obtain, we will carry out the tender offer, targeting at least 90 percent," said Astellas President and Chief Executive Officer Masafumi Nogimori.
Astellas, the third-biggest in Japan, has been chasing the deal as it seeks to bolster a nascent cancer drug business as a future earnings pillar amid falling earnings in its core, transplant and urinary therapeutic areas.
Astellas, known for its urinary drug Flomax and transplant drug Prograf, wants OSI to boost its American profile and oncology presence as it faces generic competition for these flagship drugs which recently lost patent protection in the US.
Astellas will pay US$57.50 per OSI share, 11 percent more than a previously proposed US$52. The new price represents a 55 percent premium to OSI's last closing price before Astellas launched its hostile bid on March 1.
"It's positive that it was cheaper than some market expectations of over US$60 a share, but it will take a while for Astellas to generate synergies from the acquisition," said Atsushi Seki, a drugs analyst at Barclays Capital.
OSI shares closed up 4.4 percent at US$59.80 last Friday in the US, leaving uncertainty over the response of some shareholders.
"As for how many shares we may obtain, we will carry out the tender offer, targeting at least 90 percent," said Astellas President and Chief Executive Officer Masafumi Nogimori.
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