Royalty Pharma has revised its bid for Irish pharmaceutical company Elan, with an all-cash offer of $12.50 per share compared to the $11.25 offered previously.

Elan’s board, which rejected Royalty Pharma’s initial bid on 22 April, said it would assess the revised offer “in line with its obligations under Irish Takeover law”.

The company has taken a number of steps to resist Royalty Pharma’s approach in recent weeks, including a share buy-back scheme and the announcement of a number of investments.

Elan today announced it had agreed to buy Austrian rare drug specialist AOP Orphan for €263.5m and would pay $40m for a 48% stake in Dubai-based sales and marketing firm Newbridge pharmaceuticals.

That followed a $1 billion royalties deal just a week ago, which saw Elan agree to buy 21% of the royalties that US company Theravance receives from GlaxoSmithKline for its respiratory drugs.

Elan chief executive Kelly Martin said the company would still have $1.2 billion of cash left to spend if shareholders approve its first package of acquisitions and it planned to announce more deals in the second half of the year.

However Royalty Pharma said its revised offer is contingent on shareholders rejecting the Theravance deal, which it said Elan had “dramatically overpaid” for.

Royalty Pharma said it was also assessing the latest investments announced by Elan.

Elan investments will continue - CEO

"This isn't the end of the journey, it's the middle phase. We will have north of $1 billion remaining on our balance sheet for additional investments in the next 6-12 months," Kelly Martin told Reuters, describing the Royalty bid as "a bit of nuisance".

"We will announce further things in the second half of the year. We will look at anything at all. Royalties are almost 100% profit with our tax structures, so we will look at assets or royalties or both,'' he added.

Mr Martin described the AOP Orphan acquisition, which will hand Elan a number of mainly haematology and oncology-focused drugs and late stage experimental treatments, as a "critical" piece of the new Elan.

AOP, 100% owned by founder and former Glaxo-Wellcome executive Rudolf Widman, marks Elan's first step into the rare drug market, a niche area that does not produce the high volumes that blockbuster drugs can manage but often sustains higher pricing.

Together with the stake in Newbridge, run by ex-Wyeth Inc Middle East chief Joe Henein, the deals will also move Elan's focus to eastern Europe, Africa and the Middle East, where both companies produce and sell drugs.

"These are parts of the world that are not necessarily on everyone's radar screens. It's not China, it's not Brazil, it's not Germany, France and the US, but when you add them up, it's just shy of a quarter of the world's population with healthcare demand growing dramatically," Martin said.

"We believe there are significant opportunities around the world, with certain other geographic areas that we think are as interesting as AOP and Newbridge, but there are only so many things we can do at once," the Elan CEO added.

Elan sold its 50% interest in Tysabri to US partner Biogen Idec in February for $3.25 billion plus royalties of up to 25%, and soon after rewarded investors with a $1 billion share buyback and slice of the Tysabri rights.

It further sweetened its appeal to shareholders today, saying it would repurchase another $200m of shares. It also plans to issue $800m of debt to fund future deals.

Elan added that it would spin off its remaining experimental drug, Alzheimer's treatment ELND-005, into a private company to eliminate operating expenses but it will keep an 18%stake by committing $70m to the new entity.

The share buyback and package of deals, including last week's purchase of 21% of the royalties that US company Theravance receives from GlaxoSmithKline, must be approved at a special shareholder meeting on June 17.