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Cephalon Inc.'s (CEPH) board rejected Valeant Pharmaceuticals International Inc.'s (VRX, VRX.T) $5.7 billion takeover offer, saying the proposal "significantly undervalues" the biopharmaceutical company.

Canadian-based Valeant last week offered to pay $73-per-share in cash, a bid that represented a 29% premium over Cephalon's 30-day trading average at the time. Valeant, which specializes in neurology and dermatology medicines, said it had made several private approaches to Cephalon's management and board, but said the company had been unwilling to engage in timely discussions.

Meanwhile, Valeant Chairman and Chief Executive J. Michael Pearson said the offer was "full and fair" based on available information.

But Cephalon countered the offer is opportunistic, with the 30-day share price that Valeant used to base the proposal coming close to the stock's 52-week low. Cephalon added the proposal represents "virtually no premium to Cephalon's 52-week high."

Excluding the share's jump after the deal was announced, the high mark Cephalon's stock achieved over the past year was over $68, set in April 2010.

Additionally, Cephalon said the offer didn't reflect the value of the company's pipeline, which includes 10 late-stage product candidates targeted at novel and "best-in-class" therapeutics. That includes six indications with blockbuster potential which are projected to begin launching in the next three years, Cephalon said.

A Valeant representative wasn't immediately available to comment on Cephalon's statements.

The bid comes as Cephalon faces significant business challenges. The company is dealing with a leadership transition, caused by the death of its founder and long-time chief executive in December. It is also in the middle of a long-term plan to replace sales of its top-selling product with a similar follow-up drug.

Cephalon's shares were down 0.3%, to $77.10 in after-hours trading, before being halted ahead of the news. Valeant's shares closed Tuesday at $53.96 and the stock wasn't active after the news.