Astellas Pharma has entered into a confidentiality agreement with OSI Pharmaceuticals, whereby OSI will provide certain non-public information that will provide Astellas with firmer ground from which to launch a fresh takeover bid.

The agreement came after Japan’s Astellas agreed to not pursue any further OSI shares until 15 May, creating a standstill period of six weeks as opposed to the two years OSI had originally wanted.

This confidentiality agreement is expected to keep alive Astellas’ bid for the US company as it will allow more time to accurately estimate OSI’s value and make a fresh offer in as soon as six weeks.

The standstill also allows OSI more time to find a buyer willing to improve Astella’s $52-a-share offer.

Barclay Capital analyst Phosphide Yoga said the key date during the standstill period is 18 April. That is when the US Food and Drug Administration (FDA) decides whether to allow OSI’s Tarceva cancer drug as a first-line maintenance therapy for advanced lung cancer.

“Halting negotiations until after April 18 could be a wise strategy,” as an FDA decision could change OSI’s value, Yoga said in a research note to clients.

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