Biogen is to take full ownership of blockbuster multiple sclerosis drug Tysabri after agreeing to pay Irish partner Elan $3.25 billion plus future royalties on sales of the drug.

The deal gives Elan strategic flexibility to buy new assets but leaves unclear the future direction of the company, since Tysabri was by far its most important product.

Sales of Tysabri, which provides Elan with almost all of its revenue, rose 8% to $1.6 billion last year. A filing last month for approval to sell the drug as a first-line treatment for could boost sales further.

The Irish drugmaker has co-marketed the drug with the larger U.S. company for 12 years and said it would receive a royalty of 12% of Tysabri global net sales for the first 12 months after the deal is completed.

A tiered royalty structure will kick in after that, with Elan receiving 18% on up to $2 billion of global net sales and 25% on any sales over that amount.

Elan Chief Executive Kelly Martin said the situation of relying on one asset and a single collaborator had not been ideal and the restructuring of the Tysabri alliance would allow the group to diversify into other areas.

"The restructuring of this business collaboration provides Elan with significant strategic flexibility," he said.

"We are enthusiastic about the market opportunities around the globe and remain flexible and creative about the manner in which we would participate in those opportunities."

Right opportunity

Martin told Reuters he had already had discussions with several companies about a number of different assets in anticipation of the sale of Tysabri and could move very quickly to take advantage of the right opportunity.

The deal boosts Biogen's MS business at a crucial time for the U.S. biotech company, which hopes to win approval soon for a new pill to treat the debilitating neurological disease.

Its oral drug BG-12, to be sold under the brand name Tecfidera, is expected to become a leading treatment for MS after its planned second quarter introduction.

Biogen will be able to offer BG-12 alongside Tysabri and another MS treatment called Avonex, both of which are given by injection, providing a range of treatment options for patients.

Rival providers of MS treatments include Novartis, Teva, Merck KGaA and Bayer.

There had been speculation in 2012 that Biogen might try to acquire Elan outright, following the failure of the Irish company's experimental Alzheimer's drug bapineuzumab, which it was working on with Johnson & Johnson and Pfizer .

That setback for bapineuzumab left Elan heavily reliant on Tysabri.

As part of earlier plans to refocus its operations, Elan said last August it was spinning off its Neotope drug discovery business. It had sold its drug delivery business to U.S. firm Alkermes for $960 million in 2011.