Astellas Pharma Wants OSI Pharmaceuticals


Astellas Pharma Inc., Japan’s second largest pharmaceutical company in sales, will make a tender offer to acquire all outstanding shares of common stock of OSI Pharmaceuticals for $52 per share in cash. Astellas Pharma has been wooing OSI for more than a year. What are the advantages of such a union?

Astellas Pharma’s bid is the latest in a series of deals and interest from Japanese pharmaceutical companies in US drug companies as the former try to diversity their product lines as they face expiring patents of their own. Recent acquisitions have included Dainippon Sumitomo Pharma Co.’s purchase of Sepracor Inc., Eisai Co. Ltd’s purchase of MGI Pharma Inc., and Takeda Pharmaceutical Co. Ltd’s acquisition of Millennium Pharmaceuticals.

In the past, Astellas was unsuccessful in acquiring CV Therapeutics Inc., which has a place in the cardiovascular drug market. CV Therapeutics was purchased by Gilead Sciences.


Although OSI’s only product currently on the market is the cancer drug Tarceva, which is used to treat lung and pancreatic cancer, it also has several other drugs in the pipeline. One is OSI-906, a potential first-in-class oral drug currently in Phase III clinical trials for treatment of adrenocortical carcinoma and in Phase I/II clinical trials for ovarian cancer.

OSI Prosidion is developing safer, more effective products for the treatment of type 2 diabetes and obesity in several pre-clinical and clinical programs. Prosidion Limited is OSI’s wholly-owned UK subsidiary.

In a letter dated March 1, 2010, Masafumi Nogimori, CEO of Astellas Pharma, addressed his counterpart at OSI, Colin Goddard. Nogimori stated that “We believe there are significant benefits from OSI’s acquisition by Astellas and believe that a combined entity would allow us to achieve the goal of discovering, developing and delivering novel medications for patients with unmet needs in the oncology space far better than each of our companies could do independently.”

Acquisition of OSI Pharmaceuticals by Astellas Pharma would fill an oncology slot in its therapeutic product line, which now includes cardiology, dermatology, immunology, infectious diseases, neuroscience, and urology. Some of Astellas Pharma’s products now marketed in the United States include Adenoscan® (adenosine), Flomax® (tamsulosin) and Protopic® (tacrolimus).

Astellas Pharma news release, March 1, 2010
OSI Pharmaceuticals