* OSI gains wider approval for Tarceva cancer drug
* Astellas has launched hostile bid for OSI
* OSI shares rise 0.7 pct; Astellas falls 2.2 pct (Adds OSI shares, analyst comment)
TOKYO, April 19 (Reuters) - Astellas Pharma 4503.T, Japan's No. 2 drugmaker, said on Monday it has no plan to lift its bid for OSI Pharmaceuticals OSIP.O despite U.S. regulators approving wider use of OSI's cancer pill Tarceva.
“We will not raise our offer based on the approval, though we still may change the offer based on the outcome of our ongoing due diligence under our confidential agreement with OSI,” Astellas spokesman Ryuji Samukawa said.
Astellas will likely take until the May 15 deadline set in the confidential agreement, which allows it to review OSI’s non-public information, to complete the due diligence process, Samukawa said.
The U.S. Food and Drug Administration cleared the blockbuster lung cancer pill Tarceva for use by patients with lung cancer that remains stable after chemotherapy. Tarceva is already used for treating lung cancer that worsens after chemotherapy. [ID:nN16168556]
OSI and its business partner Roche Holding AG ROG.VX co-market Tarceva, which logged $1.2 billion in sales last year.
Astellas launched a hostile takeover bid for OSI last month. It recently extended to April 23 the deadline for the $52 per share tender offer, which would total $3.5 billion.
OSI, whose shares rose 0.7 percent to $59.92 in Nasdaq trading, has rejected Astellas’ offer as too low. Its shares have consistently traded above Astellas’ offer as analysts expect either a higher offer or a rival bidder.
The wider Tarceva approval should add about $100 million to Tarceva sales by 2016, Canaccord Adams analyst George Farmer said.
“We do not expect Tarceva sales to gain significant traction as a result of this decision and would be sellers of OSIP shares on strength,” Farmer said in a research note.
Astellas shares tumbled 2.2 percent to 3,380 yen, underperforming the broader local drug sector which shed 1.8 percent, on Monday in Tokyo. (Reporting by Yumiko Nishitani, additional reporting by Lewis Krauskopf in New York; Editing by Hugh Lawson, Dave Zimmerman)
Our Standards: The Thomson Reuters Trust Principles.