Astellas Pharma Inc launched a $3.5 billion hostile bid for OSI Pharmaceuticals to gain access to the blockbuster Tarceva cancer drug, in the latest move by a Japanese drugmaker to make inroads in the United States.

OSI, whose shares surged 52.9 percent to well above Astellas' $52-per-share offer as analysts expected a higher price, said it would review the bid and advised shareholders to take no action at this time. Astellas' offer represents a 40 percent premium to the biotech company's Friday closing price.

Swiss drugmaker Roche Holding AG , OSI's partner on Tarceva, loomed as a potential white knight, should the biotech company resist Astellas.

OrbiMed Advisors, the seventh-largest OSI shareholder according to Thomson Reuters data, would absolutely not tender shares at the $52-per-share price, said Sven Borho, general partner of OrbiMed.

OrbiMed would look for something above $55 and has valued OSI at around $60, Borho said.

It has to be closer to our sum-of-parts valuation, said Borho, who said OrbiMed holds about 1.6 million OSI shares. We are supportive of a deal.

Astellas said it was taking its offer directly to OSI shareholders after the company rejected the bid last month.

This offer follows our attempts over the past 13 months to engage OSI in meaningful discussions, Astellas' Chief Executive Masafumi Nogimori said in a statement.

OSI confirmed it received an oral proposal from Astellas last month at $52 per share, which it said very significantly undervalues it. OSI said it offered to provide Astellas with non-public information critical to its valuation, and that Astellas responded with the unsolicited proposal

Astellas said it was open to having discussions with OSI's management to effect a negotiated transaction. The Japanese company said it had cash and cash equivalents on hand to complete the deal, and planned to nominate directors at OSI's upcoming annual meeting.

Astellas, which is being advised by Citigroup , said it will begin a tender offer on Tuesday.

Japan's No. 2 drugmaker is scrambling to develop next-generation drugs as patents on its mainstay products expire. In November, Astellas cut its outlook below market expectations, in part because of generic competition to its Prograf transplant drug.

It said it expected the OSI deal to support its effort to become a global leader in oncology.

OSI's Tarceva, which totaled $1.2 billion in sales last year, is approved as a second-line treatment for patients whose lung cancer has gotten worse following at least one round of chemotherapy.

OSI receives royalties on sales of the blockbuster drug, which is also approved for pancreatic cancer. The Melville, New York-based company reported $358.7 million in Tarceva-related revenue last year -- more than 80 percent of its total revenue -- and net income of $75.9 million.

Roche is the obvious candidate to snatch OSI away from Astellas, JPMorgan analyst Geoff Meacham said in a research note.

We think that it is feasible that Roche could step in with a competitive offer, but we note that Roche is historically valuation sensitive and their rights to Tarceva are unchanged with a new owner, Meacham said in a research note.

Roche declined to comment.

Astellas may be trying to acquire OSI before the U.S. Food and Drug Administration decides whether to approve Tarceva as a first-line maintenance therapy for lung cancer.

Such an approval could lead to a significant expansion of the drug's use because Tarceva could be taken earlier in the progression of the disease and possibly for several more months than under its current label. The FDA is due to decide on the label expansion by April 18.

Astellas is no stranger to making hostile offers. Last year it bid $1 billion for heart drug specialist CV Therapeutics, but lost out to Gilead Sciences .

Its bid marks the latest effort by Japanese drugmakers to buy U.S. companies and make gains in the world's largest pharmaceutical market.

In recent years, Takeda Pharmaceutical Co Ltd <4502.T> has acquired biotech Millennium Pharmaceuticals for $8.9 billion, and Eisai Co Ltd <4523.T> bought MGI Pharma for $3.9 billion, in two other deals to acquire oncology specialists.

Astellas' offer for OSI also comes as German pharmaceutical company Merck KGaA said on Sunday that it would buy U.S. life sciences tools maker Millipore for $7.2 billion.

OSI shares were up 52.9 percent at $56.60 in Nasdaq trading on Monday.

(Reporting by Lewis Krauskopf and Bill Berkrot in New York, Esha Dey in Bangalore and Katie Reid in Zurich; Editing by Lisa Von Ahn and Gunna Dickson)