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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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May 20, 2010

Astellas and OSI: Nothing like MLNM/Takeda?

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Posted by Derek

Well, here's an advantage of writing a blog: I can go with items like these. A source I have no reason to doubt has heard that high-level people at OSI are saying that the Astellas deal is not exactly going like the Takeda/Millennium deal, at least so far. In Takeda's case, they came in with assurances that they wanted to keep Millennium, that there would be retention bonuses for its people, and so on. Nothing like this has been brought up by Astellas.

In fact, the impression that I'm getting is that no one knows what's going to happen at all. Nothing seems to be known about the fate of OSI's site or its staff - and given that Astellas spent some time pursuing them, you'd think that they'd be more prepared (one way or another) to say what's going on.

This isn't to say that the worst is going to happen - I don't know that at all. It's just that in the absence of any concrete information from the acquiring company, people who have just been acquired are free to assume all kinds of things, which doesn't make for much of a constructive work environment, does it? If and when anyone hears differently, please let me know, and I'll be glad to update things. But for now, I'm sticking with what I've heard: that no one has heard a thing, including some people who really think that they should have by now.

Comments (13) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. RB Woodweird on May 20, 2010 6:48 AM writes...

So Astellas had no post-victory plan? Any Bush administration veterans on the board? Maybe they plan to just march into OSI to the cheers of the gratefully liberated.

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2. RandChemist on May 20, 2010 6:59 AM writes...

Perhaps given the way the process went they were not counting on making a successful acquisition so they had no plan? Seems like a reach.

One thing I've learned is that in the absence of concrete information people will substitute their own. The rumor mill runs rampant and the leadership on either side does nothing to stop it. Very troubling environment.

Astellas just broke ground on a new facility in the Chicago area for their US base. It's going to be ready in two years.

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3. petros on May 20, 2010 7:24 AM writes...

What's been the score in the other Japanese takeovers of smaller US companies?

Eisai- MGI, Dainippon- Sepracor etc

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4. partial agonist on May 20, 2010 7:59 AM writes...

What they say and what they do has little connection.

I remember my first close-up merger. 1995 or so, Hoechst bought Marion Merrell Dow. Hoechst said all the right things- we love the people, we love the research site, we will keep things the same, we will preserve the company culture having had no layoffs in well over 100 years.

Boom. Somebody in Frankfort left a fax on a fax machine too long, detailing the minutes of an executive meeting where it was described how sites would be closed and people would be laid off. The purloined fax was copied and circulated around the world by fax (e-mail was new then), showing up in the hands of the worker bees on the day before Thanksgiving.

About two long months later, Hoechst confirmed that everything in the fax was true.

So it doesn't matter if they pat you on the back or not. It is all an illusion, so be ready.

Permalink to Comment

5. Evorich on May 20, 2010 8:01 AM writes...

Wekk OSI already had plans to consolidate their US operations in the US all to Ardsley, NY.

The Astellas presentation does give credence, somewhat, to the idea that Astellas is still interested in OSI working on their early stage oncology compounds and that this was the prime motivation for the take-over:

http://www.astellas.com/en/ir/library/pdf/OSI20100517_en.pdf

As far as I know, OSI does it's diabetes research in the UK and that set of assets is mentioned a lot less. I would have thought therefore that the UK site people must/should be the most worried.

Permalink to Comment

6. Evorich on May 20, 2010 8:05 AM writes...

*Wekk = Well!!

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7. okemist on May 20, 2010 10:20 AM writes...

Being a chemist is a very rewarding career and being a chemist in pharmaceuticals used to be the best possibility. In the past 8 years this has changed, and there is very little job security now, and much less if you company is reorganizing or merging. Good luck to all.

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8. CMCguy on May 20, 2010 10:24 AM writes...

Based on direct experience and conversations with others the silence/lack of info is all to common in mergers/buy outs. Both RandDchemist and partial agonist make excellent points about this situation: rumors tend to fill the vacuum which is disruptive and often certain decisions are made (premerger) at execute levels but do not get implemented immediately in spite of any public statements (typically based on "stock price impact" perceptions). While occasionally it will work out most pharma mergers my sense most go sideways or even backwards in terms of actually contributing to new or better drugs and those at the "worker levels" generally pay a price.

Permalink to Comment

9. Hap on May 20, 2010 10:55 AM writes...

Much as I'd like to assume the lack of a plan, it makes no real financial or business sense for Astellas to have not had a plan - thus I would figure they have one, and if they're not saying anything, well, that probably means that it isn't going to be good for any of the employees (other than the few at the top of Astellas).

Of course, if they were making comforting noises, as above, well, it wouldn't mean anything, either. The only way that comforting words would mean anything would be if the plan which backed them made sense financially - if keeping people makes them more successful, then it makes no sense to lay people off. Since Astellas wasn't planning to pay no much for OSI, the money has to come from somewhere, no matter what the people running the show say.

I get tired of hearing the endless cries of employees and investors led to the (fiscal) slaughter, and that the words of the people running the companies in question have no expectation of being honest to anyone but themselves. I guess, in that light, I ought to be thankful for Astellas's silence.

Permalink to Comment

10. Ec_50 on May 20, 2010 12:49 PM writes...

This has been a hostile takeover up untill quite recently. Any communication will have been through legal and finance representatives. It's not common practice as far as I'm aware to share a business plan with the subject of a hostile bid until the nature of the relationship has improved. As the board of OSI have now recommended the deal it's probably wise to assume that Astellas are sharing their business plan with them.

Permalink to Comment

11. anon on May 20, 2010 9:40 PM writes...

Astellas is a weird company. They run fake job postings for non-existent jobs constantly (just like Astrazeneca and "Genentech"). Must be an HR policy of some sort. My guess is that this will NOT be a good outcome.

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12. Anonymous on May 21, 2010 2:01 PM writes...

Pfizer regularly run fake advertisements for recruitment drives. It's give their large HR function something to do, to justify their existence.

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13. noname on May 21, 2010 3:27 PM writes...

Fake job postings are often used in green card applications, to prove that no US worker is capable of filling the position occupied by the foreign worker, usually an H1-B holder. I know alot of you guys don't want to hear this, but I've gone through piles and piles of applications, finding nitpicky reasons to reject them all, for the purpose of helping a valued colleague get a green card.

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