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Biogen Idec, the US biotechnology company, said on Wednesday that it would pay $3.25bn in cash to acquire Elan Corp’s stake in its blockbuster multiple sclerosis drug.

The deal gives Biogen full control of the drug, Tysabri, which it developed in conjunction with Elan. Tysabri generated about $1.6bn in sales last year and Biogen will continue to make contingency payments to Elan based on its revenues.

For Elan, which is based in Dublin, the deal heralds a restructuring that will probably see the company acquire another company.

“This is a natural next step for Biogen Idec and Tysabri, and it underscores our deep, long-term commitment to improving the lives of MS patients around the world,” said George Scangos, Biogen’s chief executive.

Analysts predict that Tysabri sales could reach $3bn by 2016. Multiple sclerosis, which is a disease that attacks the central nervous system, affects 2m people around the world.

The deal represents a fresh start for Elan, which was dealt a blow last summer when a late stage trial for its promising Alzheimer’s drug failed, triggering the cancellation of partnership programmes with Pfizer and Johnson & Johnson.

Last year Elan announced plans to spin off its experimental sciences arm, raising speculation that it could be a takeover target.

“The restructuring of this business collaboration provides Elan with significant strategic flexibility,” said Kelly Martin, Elan’s chief executive, on Wednesday. “We are enthusiastic about the market opportunities around the globe and remain flexible and creative about the manner in which we would participate in those opportunities.”

Shares of Biogen rose 2.84 per cent to $161.83 in midday trading. Elan’s stock price fell 8.5 per cent to $9.57 in New York.

Copyright The Financial Times Limited 2017. All rights reserved.

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