February 23, 2009 / 10:24 AM / 11 years ago

UPDATE 1-Astellas chases CV Therapeutics after snubbed bid

(Recasts with details, share price)

TOKYO, Feb 23 (Reuters) - Astellas Pharma Inc (4503.T), Japan’s second-largest drugmaker, said on Monday it would continue to pursue U.S. biotech firm CV Therapeutics CVTX.O, which has rejected its $1 billion buyout offer.

“While our desire continues to be to work together to negotiate a mutually agreeable transaction, we are considering all the options that are available to us to move our offer forwards,” Astellas said in a statement.

A spokesman at Astellas, whose patents on key drugs are set to expire in the U.S., declined to say whether the drugmaker planned to sweeten its $16 per share offer.

Astellas’s cash offer was at a 41 percent premium to CV’s closing price on Jan 26, the last day of trading before the proposal was made public. CV’s shares closed at $15.52 on Friday.

Analysts say buying CV would help Astellas’s efforts to fill a hole in its earnings caused by the patent expiries, but would not strengthen its new drug pipeline — the real problem.

“A deal would be similar to a product acquisition rather than a corporate acquisition (given that CV’s value depends more on existing products than pipeline). It would not strengthen Astellas’s pipeline, which is what it needs now,” said Deutsche Securities analyst Kenji Masuzoe.

Astellas can take advantage of the strong yen and can recover a 100 billion yen ($1.1 billion) investment in about five years, he said.

“But a price of 150 billion yen or higher would make me wonder about the value of the purchase,” he said.

CV Therapeutics said on Friday it had sent a letter to Astellas saying the buyout proposal undervalued CV and its growth potential. [ID:nBNG435146]

CV Therapeutics turned down a similar offer by Astellas in November.

Astellas’s mainstay Prograf transplant drug lost its exclusivity in the United States in April, and its Flomax urination disorder drug will lose its patent protection in the world’s largest drug market in October.

Shares at Astellas closed up 1.2 percent at 3,310 yen, against a 0.5 percent fall in the benchmark Nikkei average .N225. ($1=93.00 Yen) (Reporting by Yumiko Nishitani in Tokyo and Ajay Kamalakaran in Bangalore, writing by Mayumi Negishi; Editing by Michael Watson)

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