Elan Corp says that an offer from Royalty Pharma to acquire the Irish company for $6.5 billion is “highly opportunistic” and “heavily conditional”, but has not dismissed it out of hand.

Observers were taken by surprise when Royalty, a private fund which acquires royalty interests and rights on drugs, offered to buy Elan for $11 per share. The bid comes days after the Dublin-based drugmaker unveiled plans to return $1 billion to stockholders and explore acquisitions of its own, following the sale of its stake in the multiple sclerosis blockbuster Tysabri (natalizumab) to partner Biogen Idec for $3.25 billion, plus royalties.

Royalty said its offer represents a cash premium of 6.3% to the closing price of Elan's shares on February 15 on the New York Stock Exchange. The bid was actually made on February 18 and the fund says it was surprised Elan did not mention its proposal when the firm spoke about what it will do with the Tysabri windfall last week.

Royalty, which was established in 1996, controls rights to 37 drugs, including AbbVie's Humira (adalimumab) and Johnson & Johnson/Merck & Co's Remicade (infliximab). It claims that while Elan has "demonstrated its ability to execute several significant disposals" (including the sale of some or all of the Alzheimer's drug bapineuzumab, the Elan Drug Technologies unit and Tysabri), management "has not made any significant acquisitions or in-licensed any significant late-stage products".

In response, to what it called "an indicative, conditional, proposal", Elan  said it notes "the highly opportunistic timing of the announcement by Royalty…before the company’s shareholders have had the opportunity to assess and realise the full benefit of the Tysabri transaction and the partial unlocking of its value".

Elan went on to mention "the heavily conditional nature of this indication of interest", adding that "any credible proposal which may be made by Royalty or any other party will of course be considered…alongside the strategic transactions and unique investment thesis" it presented last week.