OSI Pharmaceuticals has announced that its board of directors has unanimously rejected an unsolicited $3.5bn conditional tender offer from Astellas US Holding, a subsidiary of Japans Astellas Pharma.

On 2 March Astellas Pharma launched an unsolicited, conditional tender offer to acquire all outstanding shares of OSI common stock for $52 per share in cash.

OSI chairman of the board of directors Robert A Ingram said that after careful consideration, the offer does not fully reflect OSI’s fundamental intrinsic value.

“We believe that OSI is a unique asset – the only profitable mid-cap biotech company with a growing, high-quality and fully integrated oncology franchise and a strong diabetes and obesity franchise, which also has a proven track record of success,” Ingram said.

The chairman also revealed that the board of directors has instructed OSI management, with the assistance of the company’s financial advisors, to contact appropriate third parties to explore the availability of another transaction that reflects the full intrinsic value of the company.

OSI recorded revenue growth of 13% in 2009, based largely on the sales of the blockbuster oncology drug Tarceva and other significant DPIV patent royalties.