Ireland's Elan Corp has linked up with Proteostasis Therapeutics in a move that will see the firm take a 24% stake in the US biotech.

The "strategic business relationship" will try to advance Proeostasis platform for the discovery and development of disease-modifying, small molecule drugs and diagnostics for neurodegenerative disorders such as Parkinson's, Huntington's, multiple sclerosis and amyotrophic lateral sclerosis. It will also focus on "a broad array of dementia-related diseases including Alzheimer's".

Under the terms of the agreement, Elan is investing $20 million, thus bagging the aforementioned 24%  holding, and will have an opportunity to provide an additional $30 million in collaboration funding over five years. If all goes well, the pact may be extended for another five years after that.

The Dublin-headquartered group has also obtained "a right of first negotiation" to exclusively license compounds emerging from the initiative and will have the right to a seat on the Proteostasis board as well as its scientific advisory board. Chief executive Kelly Martin said the deal "provides a multitude of opportunities for Elan to advance its position as a world leader in the broad field of neuroscience".

He added that "importantly, and given the construct of the deal as a capital investment, this transaction is being consummated in a manner that will have a minimal near-term financial impact on our income statement". It will  enable shareholders to "realise the benefits of the operating leverage, embedded into our business, that combines expected double-digit revenue growth with a stable and well defined overall cost structure," Mr Martin concluded.