Astellas Pharma Inc, a global pharmaceutical company, and OSI Pharmaceuticals, Inc, a biotechnology company primarily focused on the discovery, development and commercialization of molecular targeted therapies addressing medical needs in oncology, diabetes and obesity, have entered into a definitive merger agreement under which Astellas will acquire OSI.

Under the terms of the merger agreement, Astellas will increase its offer price to US$ 57.50 per share, which represents a premium of 55 per cent to the closing price for OSI's shares of US$ 37.02 on February 26, 2010, the last trading day before the announcement by Astellas of its tender offer. The boards of directors of both companies have unanimously approved the combination. The all-cash transaction is valued at US$ 4.0 billion on a fully diluted basis.

The combined company creates a world-class oncology platform supporting Astellas' stated growth strategy of becoming a Global Category Leader in Oncology, a high-priority therapeutic area for Astellas. OSI commercializes Tarceva (erlotinib), a leading cancer medication. OSI's total annual revenues for 2009, as reported in its Form 10-K for the year ended December 31, 2009, were US$ 428 million and operating income was US$ 153 million.

Masafumi Nogimori, president and chief executive officer of Astellas, said, "The merger with OSI provides Astellas with a top-tier oncology platform in the US and an expanded product portfolio and pipelines. In addition to Tarceva, we are pleased to add its oncology infrastructure, discovery platform, expanded pipelines and talent base to our existing businesses. We look forward to working together with our OSI colleagues to grow the combined business and realize our shared goal of improving the health of the people around the world every day."

Colin Goddard, chief executive officer of OSI Pharmaceuticals, said, "We believe this announcement recognizes the significant value we have built for our stockholders while providing the merged companies the opportunity to forge a stronger collective path forward in a shared mission to provide innovative new medicines to patients around the world."

This is an all-cash transaction with no financing conditions to close. The transaction is subject to other customary closing conditions, including the tender of a majority of OSI's shares of common stock on a fully diluted basis. The HSR waiting period applicable to the acquisition of OSI by Astellas expired on March 19, 2010.

Astellas' all-cash tender offer for US$ 57.50 per share for all of the currently outstanding shares of common stock (including the associated stock purchase rights) of OSI Pharmaceuticals, Inc will expire no later than 10 business days after the amendment to the Schedule TO is filed (which is expected to be filed on or before May 21st), unless extended.

Astellas Pharma is a pharmaceutical company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceuticals.