Astellas Pharma Inc, Japan's second-largest drugmaker, withdrew a $1-billion hostile bid for CV Therapeutics today after the US biotechnology firm agreed to a higher offer from Gilead Sciences Inc (See: Gilead Sciences to acquire CV Therapeutics for $1.4 billion)
Astellas ended its four-month pursuit of CV without sweetening its offer despite repeated rejections by CV and the Japanese firm's wish to make up for setbacks in its drug pipeline with products such as CV's cardiovascular drugs. Gilead Sciences, whose market capitalisation is nearly triple that of Astellas, won acceptance from CV last Thursday for an offer of $20 per share, topping Astellas's bid at $16 per share, due to expire on 27 March. (See: Japan's No.2 drugmaker Astellas makes $1-billion hostile bid for US firm CV Therapeutics)
''Astellas is a disciplined acquirer and does not see value for Astellas stockholders in CV Therapeutics at the price level of the sale announced on March 12,'' the Japanese drugmaker said in a statement.
Astellas had ruled out a hostile takeover but adopted an unprecedented hostile approach for a Japanese firm, filing a lawsuit against a reluctant CV and threatening to dismiss CV executives, before Gilead came along with a higher offer.
The Japanese drugmaker's shares rose on Friday, underscoring investor speculation that it would shy away from a costly bidding war over CV. They closed flat at 2,935 yen on Monday ahead of the announcement. Shares of CV, which closed up 1 per cent at $20.67 Friday, suggesting the market was expecting a counter bid, fell as much as 5 per cent to $19.68 Monday morning on NASDAQ.
Although investors may have preferred no deal to the risk of paying an excessive premium for CV, Astellas is left with a need for new income sources as it faces expiring patents on key drugs.
The bid's failure adds pressure on Astellas to stem an expected loss of revenue after last April's patent expiration in the US for the Prograf organ-transplant drug, which generated a fifth of the company's sales. CEO Masafumi Nogimori has also abandoned a three-year effort to sell a successor treatment after U.S. regulators asked for more data.
The next hit to Astellas's catalog will be October's US patent deadline for the Harnal incontinence treatment. Pfizer Inc.'s Lipitor cholesterol pill, which Astellas sells in Japan, loses patent protection in June 2011.
Nogimori also needs to fill a gap in Astellas's product pipeline. The company hasn't released a new homemade medicine expected to sell more than $1 billion annually since the bladder-control treatment Vesicare in 2004, and Astellas expects its next major seller, a urinary control known as YM178, to be at least two years away.
The company's recurring profit is set to drop amid competition from generic drugmakers in some areas, including transplant drugs, as early as its financial year starting in April, analysts say.