ARTICLE | Strategy

OSI's Last Stand

March 8, 2010 8:00 AM UTC

OSI Pharmaceuticals Inc. has made two strategic decisions in the last five years that investors didn't like. As a result, it would not be surprising if they refuse to back the company's independence following last week's hostile bid by Astellas Pharma Inc. to buy the company for $52 a share, or $3.5 billion.

The problem for OSI is that it has failed in its efforts to buy near-term revenues and it has no near-term drivers from its internal pipeline. Indeed, according to SEC documents released last week by Astellas, during talks between the two companies in 2009, OSI CEO Colin Goddard said "he believed OSI would realize its intrinsic value within two years."...