CV Therapeutics has rejected a $1 billion hostile takeover bid from Japan's Astellas Pharma, saying that the offer “significantly undervalues” the US biotechnology company.

A month ago, Astellas made public a $16 per share bid it had privately submitted in November. That offer had been rejected but the CVT board had agreed to look at it again.

Now, chief executive Louis Lange has written to his counterpart at Astellas, Masafumi Nogimori, saying that the board, “with the assistance of its financial and legal advisors, has carefully considered” the proposal. They have concluded that it “significantly undervalues CVT and its potential growth opportunities and we decline to accept it”.

He added that the company’s directors have “a strategic plan in place” to carry on independently but they are not closing the door on Astellas. Dr Lange stressed that “we have always been, and remain, receptive to opportunities to further enhance shareholder value”.

This morning Astellas responded to CVT's rejection with disappointment, noting that the proposal represents a premium of 41% to the latter's’ closing price on January 26. The Japanese firm said it regretted the fact that the CVT board "did not engage us in any discussions as part of their review".

Astellas continued by saying that its bid provides "excellent immediate value that exceeds what the company could reasonably expect to deliver through their standalone strategy". It added that "while our desire continues to be to work together to negotiate a mutually agreeable transaction, we are considering all the options that are available to us to move our offer forward.”

Meantime, CVT has unveiled its financials for the fourth quarter which show that net loss was up $2.9 million to $37 million, while revenues climbed from $22.4 million in the like, year-earlier period to $41.9 million. The vast majority of that figure came from sales of the anti-angina drug Ranexa (extended-release ranolazine) which recently received the thumbs-up in the USA for a new first line indication (chronic angina). Revenues from the drug rose 51% to $31.5 million.

Dr Lange said that "2008 was an exceptional year” for CVT as it received “three major regulatory approvals, retired more than $100 million in debt, completed two major strategic transactions bringing in more than $250 million…and saw our share price outperform the Nasdaq by more than 40%. He added that with the company's solid cash position ($263.4 million at the end of the year), the full promotional launch of the improved US Ranexa labelling and the imminent introduction of the drug in Europe, “we expect 2009 to be another outstanding year”.