THE PHARMACEUTICAL FIRM Elan, which produces the MS drug Tysabri, has announced a new $960m (€665.5m) merger with Alkermes.

Under the deal, Elan’s Athlone business will be taken over by Alkermes, and the companies “will be combined under a new holding company incorporated in Ireland”.

Elan will receive $500m (€346m) in cash and 31.9m ordinary shares in Alkermes.

The CEO of Alkermes, Richard Pops, said “both companies have a proven track record as innovators” and said the merger would be profitable and provide a “strong foundation for growth” for the merged business.

Elan CEO Kelly Martin said the deal “aggressively advances a number of long-standing strategic and financial objectives for Elan” by helping it to reduce it debt and increase its “operating leverage”.

Four hundred and fifty people work at the Athlone plant and Martin told RTÉ that Alkermes is committed to maintaining that staff level.

The deal is subject to the approval of Alkermes’ shareholders and US authorities, but is expected to close in Q3 of 2011.

Alkermes produces drugs to combat alcohol and drug dependencies, as well as treatments for schizophrenia and bipolar disorder.