UPDATE:Astellas Pharma Abandons Offer To Buy CV Therapeutics

Astellas Pharma Inc. (4503.TO) said Monday it has decided to withdraw its offer to buy U.S. biopharmaceutical company CV Therapeutics Inc. (CVTX), ending what had turned into a hostile takeover bid for the heart-drug maker which the Japanese firm saw as a new revenue source.

The decision follows last week's emergence of U.S. firm Gilead Sciences Inc. (GILD) as a white knight, proposing to buy CV Therapeutics for $20 per share - totaling $1.4 billion - compared with Astellas' offer of $16 per share.

In response, the Japanese pharmaceutical company could have either raised its bid above $20 - adding at least $300 million more to its original offer - or bow out.

It chose the latter, saying in a statement it "does not see value for Astellas shareholders in CV Therapeutics at the price level" proposed by Gilead.

Following the withdrawal, it will also pull out of a lawsuit in the Delaware Chancery Court against CV Therapeutics and its directors relating to the takeover bid.

Astellas had been seeking talks with CV Therapeutics for a friendly takeover for some time, but was repeatedly rejected. It finally launched its $16-a-share tender offer at the end of February, with a total value of $1.1 billion.

Astellas' surrender is the latest example of a Japanese company failing with an unsolicited bid for an overseas firm.

Last year, Massachusetts-based, semiconductor equipment maker Axcelis Technologies Inc. rejected a sweetened unsolicited takeover bid from Sumitomo Heavy Industries Ltd. for $6 a share, or about $613 million, saying the offer was too low. A prolonged battle ensued, ending with Sumitomo abandoning its bid in September.

At a time when domestic rivals including Takeda Pharmaceutical Co. (4502.TO) and Eisai Co. (4523.TO) were buying U.S. biopharmaceutical companies last year to acquire new cancer drug candidates, Astellas had hoped it would be able to generate several years' worth of revenue growth by acquiring CV Therapeutics. It was expecting that the deal would partly make up for expected declines in U.S. sales of drugs whose patents have already expired.

Astellas was primarily interested in drugs CV Therapeutics already markets - namely Ranexa for treating chronic angina and Lexiscan for detecting coronary artery disease.

-By Hiroyuki Kachi, Dow Jones Newswires; 813-5255-2929; [e-mail]