UPDATE:Astellas Launches Unsolicited $3.5 Billion Bid For OSI Pharmaceutical

Astellas Pharma Inc. (ALPMY, 4503.TO) launched an unsolicited $3.5 billion bid to buy OSI Pharmaceuticals Inc.(OSIP) for $52 a share in cash, becoming the latest Japanese drug maker to go after a U.S. company.

OSI shares surged in premarket trading Monday, going above the offer price, suggesting that Wall Street speculated that a higher offer might be needed to close the deal.

Astellas, Japan's second-biggest pharmaceutical company by sales, said it has been attempting for 13 months "to engage OSI in meaningful discussions," although OSI has snubbed the takeover attempt as too low.

Officials from OSI weren't immediately available for comment.

The offer represents a 40% premium over Friday's closing price of $37.02. In response, OSI shares jumped 50% to $55.55 in premarket trading, 6.8% higher than Astellas' bid.

Astellas offer comes amid continued interest from Japanese pharmaceutical companies in the U.S., as they diversify their business amid expiring patents at home.

Deals include Dainippon Sumitomo Pharma Co.'s (4506.TO) $2.6 billion buy of Sepracor Inc., Takeda Pharmaceutical Co. Ltd.'s (4502.TO) $8.8 billion acquisition of Millennium Pharmaceuticals, and Eisai Co. Ltd. (4523.TO) paying $3.9 billion for MGI Pharma Inc.

But the effort hasn't always been successful. Astellas' offer for OSI comes almost a year after it dropped an attempt to buy U.S. biopharmaceutical company CV Therapeutics Inc. in a hostile takeover bid for the heart-drug maker.

In a similar situation to OSI, Astellas sought talks with CV until launching a $1.1 billion offer, but it was later outbid by Gilead Sciences Inc.'s (GILD) $1.4 billion offer.

OSI's sole marketed product is cancer drug Tarceva, which it sells with Swiss drug giant Roche Holding AG (RHHBY, ROG.VX). The pill, used to treat lung and pancreatic cancer, had worldwide sales of $1.2 billion in 2009

Astellas said that as recently as Feb. 12, it had tried to acquire OSI but was told its offer "very significantly undervalues" OSI. Astellas said it first raised interest in buying OSI in January 2009 and made its first written proposal in February of the same year.

"We believe there are significant benefits from OSI's acquisition by Astellas and believe that a combined entity would allow us to achieve the goal of discovering, developing and delivering novel medications for patients with unmet needs in the oncology space far better than each of our companies could do independently," Astellas President and Chief Executive Masafumi Nogimori wrote in a letter to OSI CEO Colin Goddard dated Monday.

-By Thomas Gryta, Dow Jones Newswires; 212-416-2169; [e-mail]

(Nathan Becker contributed to this story)