US-listed pharmatechnology company Biogen has agreed to pay 3.25bn dollars for Irish drugmaker Elan Corporation's Multiple Sclerosis drug Tysabri.

A statement published on Elan's website on Wednesday reported that Elan had agreed to restructure the Tysabri collaboration with Biogen Idec.

Under the terms of the agreement, it stated that Elan would move from its current 50:50 business collaboration to an upfront payment of $3.25bn and a double digit tiered royalty structure for the complete asset.

Highlights of the transaction upon closing included an upfront cash paymeny of 3.25bn dollars to Elan and a royalty of 12% of Tysabari global net sales for the first 12 months.

The group reported that after 12 months there would be a tiered royalty structure.

Kelly Martin, Chief Executive Officer of Elan, said: "This transaction enables Elan and its shareholders to realize, upon close, a meaningful percentage of the current value of Tysabri while maintaining long-term cash flow realisation through the multi-tiered royalty structure of the complete asset."

Martin added: "The restructuring of this business collaboration provides Elan with significant strategic flexibility. future actions will be guided by our consistent and multi-year approach od dynamic risk./reward assessment of business opportunities."

According to the Multiple Sclerosis society, around 100,000 people in the UK alone have the neurological condition.

The immune systems of sufferers mistakes myelin, a substance which protects nerve fibres in the central nervous system, for foreign bodies and attacks them. This damages the myelin and disrupts the messages travelling along nerve fibres.

MF

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