OSI Pharmaceuticals Inc. (Osip)

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Astellas agrees to buy OSI Pharma for $4 billion
dropping MOD position due to Buyout
TOKYO (Reuters) - Astellas Pharma (Tokyo:4503.T - News), Japan's No.2 drugmaker, agreed to buy U.S. biotech OSI Pharma (NasdaqGS:OSIP - News) for $4 billion in cash in a sweetened bid that allows it to add OSI's blockbuster cancer drug Tarceva to its line-up.

Astellas, known for its urinary and transplant drugs, wants OSI to boost its U.S. footprint and oncology presence as it faces generic competition for its own drugs.

Astellas said it would pay $57.50 per OSI share, up from a previously proposed $52. The new price represents a 55 percent premium to OSI's last closing price before Astellas launched its hostile bid for the biotech firm on March 1.

The boards of directors of both companies have unanimously approved the deal, Astellas said in a statement.

"The merger with OSI provides Astellas with a top-tier oncology platform in the U.S. and an expanded product portfolio and pipelines," Astellas President Masafumi Nogimori said in the statement.

The OSI bid is Astellas' second attempt to push into the U.S. market after it failed last year with a hostile bid for CV Therapeutics. Then, Astellas refused to raise its offer and lost to Gilead Sciences (NasdaqGS:GILD - News).

Astellas shares were down 1.8 percent at 3,090 yen, underperforming a 1.4 percent decline for the broader market (Osaka:^N225 - News).

(Reporting by Nobuhiro Kubo; Editing by Charlotte Cooper)