It looks as though Elan Corp has beaten off the advances of Royalty Pharma after the Irish drugmaker's previously-announced buyback saw shareholders tender stock at a lower price than the US would-be acquirer had advised.

At the beginning of the week, Royalty made a firm offer, rather than "an indicative proposal" and upped its original $11 per share bid, which had valued Elan at about $6.50. However, that offer ranged from $11.25 to $12.00 depending on the pricing of Elan's previously-announced $1 billion share buyback.

Royalty chief executive Pablo Legorreta had urged Elan shareholders to tender their shares at the upper range "in order to obtain the full amount of our offer in cash in the shortest timeframe" and put pressure on the Dublin-based group's board to engage in talks. However, that stance appears to have backfired.

Elan has revealed that just 4.3% of stockholders tendered at $11.75 or $12.00, and that it bought back its target of $1 billion in stock at the bottom of the range. It noted that more than 73% of shares had not been tendered, while Johnson & Johnson accounted for 92.3% of all shares purchased, selling at $11.25.

The healthcare major has reduced its stake in Elan from 18.4% to 4.9% and noted that the transaction will result in an after-tax gain of $213 million. J&J paid $1 billion (with $115 million going to Elan's partner Biogen Idec) for its holding in September 2009 in a deal that gave it a 25% share in the investigational Alzheimer's drug bapineuzumab.

After all that, it looks as though shareholders are happy with Elan's current management which earlier this year sold its stake in the multiple sclerosis blockbuster Tysabri (natalizumab) to partner Biogen for $3.25 billion, plus royalties. The company said it planned to use some of the cash to pursue "strategic transactions" but Royalty questioned present management's ability to run a company the latter says "consists of cash and a royalty on Tysabri".

The likelihood of a raised bid appears to have disappeared. The company, which controls rights to several drugs, including AbbVie's Humira (adalimumab) and J&J/Merck & Co's Remicade (infliximab), promptly lowered its offer to $11.25.