Astellas Pharma has made a hostile bid worth about $3.5 billion to acquire OSI Pharmaceuticals which, if successful, would give it access to the US firm’s considerable royalties from the cancer blockbuster.

Under the terms of the unsolicited bid, Astellas is offering $52.00 per share in cash, which represents a premium of over 40% on OSI’s closing price of $37.02 on February 26 and a 53% hike to its three-month average price. The main attraction of the Melville, New York-based firm is that it manufactures and co-markets (with Roche) the lung and pancreatic cancer drug Tarceva (erlotinib) and it also has “several prospective new oncology medications in its R&D pipeline”, the Japanese drugmaker says.

Astellas has taken the hostile route because it has made “numerous attempts to engage in substantive discussions to acquire OSI”, the first approach being made 13 months ago. During that time there have been “several face-to-face meetings, including a meeting between the two CEOs on February 12,” where OSI’s chief executive Colin Goddard noted that the $52.00 offer “very significantly undervalues” his firm.

In his latest letter to Mr Goddard, Astellas chief executive Masafumi Nogimori said that “because your response indicates that you have no intention to engage in substantive discussions, our board has authorised me to take our offer directly to OSI’s stockholders” He added that “we continue to be excited about the possibility of bringing our two organisations together and we hope that you and your board will reconsider your position”.

The response from OSI has been fairly cordial, though the board advised stockholders to take no action at this time. However, in a letter to Mr Nogimori, Mr Goddard said it is not interested in undertaking a sale at that price, but “I can confirm that we are prepared to provide you with certain non-public information…which is fundamental to our view of the value of OSI”. He added that “we have handled our discussions in an appropriately confidential manner and trust you will do the same”.

Analysts believe that while Roche may come in with a bid for its partner, Astellas should win through. Eric Schmidt at Cowen & Co issued a research note saying that the Tokyo-based firm “will eventually be successful” and that “the likely acquisition price will be modestly higher than $52”. After the bid was announced, OSI shares shot up 52% to close at $56.20.

The offer for OSI is Astellas’ second attempt to expand in the USA after it failed last year with a hostile bid for CV Therapeutics, losing out to Gilead Sciences.