Royalty Pharma in $6.6bn bid for Elan Royalty Pharma, an investment group that buys the rights to patented drugs, has made a bid to acquire Elan, the Dublin-based pharmaceutical business, in a deal valuing the company's equity at $6.6bn. The $11-a-share move marks an effort by Royalty to gain access to future income from Tysabri, the multiple sclerosis drug jointly developed by Elan that it this month sold to its US partner Biogen Idec for $3.25bn in cash but with continuing royalties. The offer also marks an escalation of Royalty's normal approach of buying out royalty streams from pharmaceutical companies" portfolios of existing drugs, such as Abbott's blockbuster Humira, and instead proposing to acquire Elan outright to take control of its single significant product. In an unusual twist, Royalty said it was "surprised" that its proposal - initially made to Elan on February 18 - had not been mentioned when the Irish drugmaker announced plans last Friday to instead launch new acquisitions with part of its Biogen Idec cash. However, under Irish Takeover Panel rules a company is not required to disclose that it has received an offer from a third party unless rumour or speculation leads to an "anomalous movement" in its share price. Royalty said the takeover offered Elan investors a way of avoiding annual operating costs of up to $170m and lack of certainty over the company's acquisitions and associated costs. "The risks and lack of earnings visibility associated with Elan's acquisition and in-licensing strategy are substantial," it said. The current senior management team of Elan has not made any significant acquisitions or in-licensed any significant late stage products for Elan and thus does not have a track record of generating attractive returns from acquisitions or in-licensed products for Elan. Royalty said the deal represented a 12.6 per cent premium to Elan's enterprise value of $3.5bn as of Friday's close in New York. The Irish group has $3bn in net cash. Royalty, created in 1996 and owned by its partners, controls rights to 37 drugs including Johnson & Johnson's Remicade, Merck's Januvia and Gilead's Atripla. It reported unaudited earnings before interest, tax and depreciation for 2012 of $1.35bn on sales of $1.39bn. Its lead adviser on the Elan deal is JPMorgan.