IHS Global Insight Perspective | |
Significance | In its bid to acquire the U.S. biotech CV Therapeutics, Astellas has taken two steps at the same time, namely the tender offer for acquiring all outstanding shares of CV Therapeutics and a lawsuit against the U.S. company for preventing the acquisition. |
Implications | Astellas is keen on including CV Therapeutics' cardiovascular drug Ranexa (ranolazine) into its portfolio through the acquisition. However, the U.S. biotech's directors have asked its shareholders to hold on from tendering into Astellas's offer. |
Outlook | With CV Therapeutics' board's determination against the acquisition, Astellas may find the process more difficult and lengthy than expected. |
Astellas announced that its indirect subsidiary Sturgeon Acquisition has launched a tender offer for the acquisition of all outstanding shares of CV Therapeutics (U.S.) to push ahead Astellas's hostile bid of acquiring the U.S. biotech company. The tender offer, at the price of US$16 per share, will be valid for a month until 27 March 2009 unless a further extension is given. Astellas has also filed a lawsuit in the United States against CV Therapeutics and its directors for preventing the acquisition.
Astellas Launches Unsolicited US$1-bil. Cash Bid
Astellas first proposed the acquisition to CV Therapeutics on 14 November 2008 with an all-cash payment offer of about US$1 billon. One week later, CV Therapeutics declined the offer with the reason that "it is not in the best interests of CV Therapeutics and its stockholders". In January 2009, Astellas publicly disclosed its proposal and re-stressed its determination in the pursuit of realising the acquisition deal, despite rejections from the CV Therapeutics' directors (see United States - Japan: 28 January 2009: Astellas Launches Unsolicited US$1-bil. Cash Bid to Acquire CV Therapeutics).
Astellas noted in its latest statement that they are taking the offer directly to CV Therapeutics' shareholders because the U.S. company's board of directors refused to discuss with Astellas about the proposal. On the other hand, CV Therapeutics has issued a statement advising its stakeholders not to take actions in response to Astellas's tender offer.
Lawsuit to Remove the Stumbling Block for Acquisition
Astellas today also announced that it has filed a lawsuit in the Delaware Chancery Court against CV Therapeutics and its directors for some actions preventing the acquisition. The lawsuit primarily looks at two claims by Astellas that the U.S. biotech and its directors "(i) prevent CV Therapeutics from applying its recently amended stockholders rights plan in a way that would prevent CV Therapeutics’ stockholders from tendering their shares into the tender offer announced by Astellas today and (ii) preclude CV Therapeutics from claiming that a 2000 agreement between Astellas and CV Therapeutics has been violated by the Astellas tender offer." There has been no response available from CV Therapeutics' side towards the lawsuit.
Outlook and Implications
By taking the two aforementioned actions at the same time, Astellas is taking its hostile acquisition bid into a more aggressive stage. Astellas, as many other innovative drug majors, is keenly seeking opportunities in the expansion of its product portfolio and overseas markets in the face of patent expiry threat of its star drugs. In the U.S. market, Astellas's immunosuppressant Prograf's (tacrolimus) patent expired in April 2008.
One of the main attractions in CV Therapeutics' portfolio is the cardiovascular drug Ranexa, which is expected to see future sales boost with new indications for first-line angina treatment and diabetes treatment. It still remains to be seen what further actions CV Therapeutics will take, but their determination against the acquisition deal may mean a more difficult and lengthy process for Astellas than expected.