Irish bio-tech company Elan looks set to be sold, with management sensationally announcing yesterday that it has authorised a formal sale process to commence.

As much as $2bn (€1.5bn) could be wiped off Elan’s market value if its shareholders reject US firm, Royalty Pharma’s takeover advances next week, brokers have claimed.

Elan agreed to pay $1bn (€770m) for a share of the royalties on new drugs from Theravance as it tries to persuade shareholders to spurn a takeover offer by Royalty Pharma.

Elan Corp considered buying New York investment firm Royalty Pharma last year, about six months before Royalty Pharma turned around with an acquisition proposal for Elan that’s now valued at about $5.7bn (€4.33bn).