Astellas buys OSI for $4B

After months of wrangling, OSI Pharmaceuticals (NASDAQ: OSIP) has agreed to be acquired by Japan's Astellas for $57.50 per share, or $4 billion. That's a premium of 55 percent to the closing price for OSI's shares on Feb. 26, when Astellas made its original $3.5 billion, $52-per-share offer. Astellas launched a hostile takeover attempt after OSI's board rejected that bid.

The successful deal is a victory for Astellas CEO Masafumi Nogimori, who last year was unable to execute a buyout of CV Therapeutics. Gilead ended up purchasing the drugmaker. "Investors were worried that Astellas might fail to buy a foreign firm again. That they have managed to clinch the deal will probably wipe out investor anxiety about Astellas' management," analyst Atsushi Seki tells Reuters.

Astellas is most interested in OSI's cancer pipeline, including the blockbuster lung cancer drug Tarceva. OSI is pursuing an expanded indication for the drug, which could boost annual sales over $1.2 billion. Astellas hopes sales from OSI holdings will offset the loss of patents on its blockbuster drugs Flomax and Prograf. "In addition to Tarceva, we are pleased to add its oncology infrastructure, discovery platform, expanded pipelines and talent base to our existing businesses," says Nogimori in a release.

- here's OSI's release on the deal
- read the Reuters report for more