Biogen Idec, a global leader in innovative therapies today said that it would take full ownership of blockbuster multiple sclerosis (MS) drug Tysabri by paying Irish drug maker Elan Corp $3.25 billion plus future royalties on sales of the drug.

Dublin-based Elan, which has co-marketed the drug with Biogen for 12 years, will receive a royalty of 12 per cent of Tysabri's global net sales for the first 12 months after the deal closes, and then receive 18 per cent on up to $2 billion of global net sales and 25 per cent on any sales over that amount.

Elan's CEO, Kelly Martin, said, ''This transaction enables Elan and its shareholders to realise, 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."

The restructuring of this business collaboration provides Elan with significant strategic flexibility.

Martin said, "Future actions will be guided by our consistent and multi-year approach of dynamic risk / reward assessment of business opportunities. 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.

''Upon closing, this highly unique platform provides us with the financial resources to create an enterprise that will diversify its assets, generate future income, maintain specific science and clinical translational capabilities, and leverage the financial and business structure from being a 40-year Irish plc.''

Tysabri, a once-monthly infusion for relapsing forms multiple sclerosis, is approved in more than 65 countries, including the US.

In the European Union, it is approved for highly active relapsing-remitting MS (RRMS) in adult patients who have failed to respond to beta interferon or have rapidly evolving, severe RRMS.

The drug, which was first approved in 2004 by the US Food and Drug Administration (FDA), was pulled off the market in 2005 after it was linked to a rare brain infection called progressive multi-focal leukoencephalopathy (PML), an often-fatal brain infection caused by activation of the JC virus in patients who are immune-suppressed.

The FDA issued a rare second approval in 2006, along with a strict risk-management plan.

In 2009, European regulators also raised concerns after 23 cases were reported of patients who developed potentially fatal brain infections after taking Tysabri. (See: EU watchdog places Biogen's Tysabri under scanner)

Biogen was forced to change the wording on Tysabri's label to reflect an increased risk with patients taking the drug for a prolonged period of time.

In early 2012, the FDA gave clearance to Biogen to modify the label on Tysabri, which would help doctors identify patients with the highest and lowest risks of developing deadly brain infections linked to the drug.

The added safety information is likely to double the drugs worldwide sales, which generated revenues of $1.6 billion last year. Elan had earlier said that Tysabri sales may reach $2.5 billion to $3 billion by 2016.