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May 17, 2010

OSI Accepts Astellas' Increased $4B Cash Takeover Offer

OSI Accepts Astellas' Increased $4B Cash Takeover Offer

Firm had previously rejected Astellas’ unsolicited bid of roughly $3.5 billion. [© Yuri Arcurs - Fotolia.com]

  • Astellas Pharma is buying OSI Pharmaceuticals in an all-cash transaction valued at some $4 billion on a fully diluted basis. Astellas will pay $57.5 per OSI share, a premium of 55% on the closing price of the latter’s stock on February 26.

    The accepted bid comes within a couple of months of OSI throwing out Astellas’ original and unsolicited $52 per share offer and within a month of both FDA and European authorities green-lighting a new non-small-cell lung cancer (NSCLC) maintenance therapy indication for OSI’s flagship drug, Tarceva®.

    Japanese company Astellas says the acquisition of OSI will give it fully integrated oncology capabilities in the U.S., including discovery, development, and commercialization expertise. The deal will also expand its clinical-stage oncology pipeline and give it access to a small molecule discovery platform.

    Tarceva has been approved in the U.S. since 2004 and in the EU since 2005 for the treatment of locally advanced or metastatic NSCLC with or without EGFR-activating mutations after failure of at least one prior chemotherapy regimen. Tarceva is now marketed in some 109 countries in this indication, according to OSI. The therapy is also sanctioned in the U.S. and Europe in combination with gemcitabine for the first-line treatment of patients with locally advanced, unresectable or metastatic pancreatic cancer.

    The drug achieved worldwide sales of some $1.2 billion in 2009, which brought OSI Tarceva-related revenues of $359 million. This included Tarceva-related royalties of $146 million from partner, Roche.

    OSI also has a clinical pipeline of oncology and diabetes/obesity products to complement this billion-dollar product. OSI-906 is a potential first-in-class selective small molecule dual kinase inhibitor of insulin-like growth factor-1 receptor and insulin receptor. In December 2009, the firm started a Phase III trial evaluating the molecule in patients with locally advanced or metastatic adrenocortical carcinoma  and a second, Phase I/II study evaluating OSI-906 in combination with Taxol primarily in patients with recurrent epithelial ovarian cancer. OSI says that it also plans to initiate clinical trials evaluating OSI-906 in combination with Tarceva in NSCLC during 2010.

    OSI-027 is a Phase I next-generation mammalian target of rapamycin (mTOR) kinase inhibitor that the firm claims inhibits the kinase activity associated with both the TORC1 and TORC2 complexes of mTOR. OSI-930 is an orally active inhibitor of c-Kit and the vascular endothelial growth factor receptor-2 (VEGFR-2). This drug has completed Phase I dose-escalation studies in healthy volunteers, and Phase I trials in cancer patients are ongoing.

    In the field of diabetes and obesity, OSI’s PSN821 is an agonist of the GPCR target, GPR119, which is expressed in the gut and pancreatic islet cells. The drug is currently undergoing Phase II trials. Also in Phase II development is PSN010, an oral glucokinase activator being tested for the treatment of type 2 diabetes.


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