OSI Pharma Acquired by Astellas for $4 Billion

Astellas Pharma Inc., Japan’s No.2 drugmaker, said on Sunday that it had agreed to buy U.S. biotech OSI Pharma (OSIP) for $4 billion in cash.

Under the terms of the merger agreement, Astellas will add OSI’s blockbuster cancer drug Tarceva to its line-up and will increase its offer price to $57.50 per share, up from a previously proposed $52, which represents a premium of 55% to the closing price for OSI’s shares of $37.02 on February 26, 2010, the last trading day before Tokyo-based Astellas launched its hostile bid for the biotech firm on March 1.

The boards of directors of both companies have unanimously approved the combination, Astellas said in a statement.

“The merger with OSI provides Astellas with a top-tier oncology platform in the U.S. and an expanded product portfolio and pipelines. In addition to Tarceva®, we are pleased to add its oncology infrastructure, discovery platform, expanded pipelines and talent base to our existing businesses,” Astellas President Masafumi Nogimori said in the statement.

The deal marks a successful effort by Astellas to acquire an American biotech company, following its failed attempt to buy CV Therapeutics in early 2009. During last year’s takeover battle, Astellas’s $1 billion bid lost out to Foster City, California – based Gilead Sciences’s (GILD) $1.4-billion offer.

Astellas said Citigroup (C) is acting as exclusive financial advisor to the company while Centerview Partners LLC is acting as lead financial advisor to OSI. Lazard (LAZ) also was retained as a financial advisor to OSI.

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