Royalty Pharma has finally abandoned its $8 billion bid for Elan Corp, leaving observers to wonder who will make an offer for the Irish drugmaker which put itself up for sale last week.

Royalty has withdrawn its appeal against a ruling by the Irish Takeover Panel which stated that the group could not submit another hostile bid for Elan for 12 months once its current offer lapses. Earlier this week, shareholders in the Dublin-headquartered group approved a share buyback plan, but voted against a royalties alliance with Theravance, the acquisition of Austria's AOP Orphan Pharmaceuticals and a plan to spin-off its early-stage Alzheimer’s drug ELND005.  

Support for just one of the proposals meant that Royalty's bid was over and ended a four-month battle for control of Elan which last week said that "in light of expressions of interests received to date", it was prepared to sell up. The question now is who may be interested.

In a research note, Jefferies analyst Corey Davis notes that Elan management have suggested that they were amenable to a sale in the $15-$20 per share and he believes a $19 takeout price, up from a previous estimate of $14, is realistic. Royalty's final bid was $13, plus a contingent value right that could have added another $2.50 per share depending on the performance of Tysabri (natalizumab), the multiple sclerosis drug Elan sold its stake in to partner Biogen Idec in return for $3.25 billion, plus royalties.

The broker has narrowed down the list of potential suitors to shortlist of seven names: Allergan, Regeneron, Vertex, Alexion, Mylan, Perrigo and, less obviously, Pfizer's animal health spin-off Zoetis. "We are sure there are more and this is not an exhaustive list, but we think it's a start," he concludes.