The battle for control of the pharmacetical company Elan is stepping up after the American company trying to buy the MS drug developer increased its bid. Royalty Pharma said it a statement today that it would pay US$12 a share for Elan (about €9.17), a 23% increase on its last bid.

Since selling its best-selling multiple sclerosis treatment Tysabri, Elan has been sitting on billions of euro in cash and will receive a share of the drug's future sales. Elan management said they plan to use the money to invest in new drugs and also hand back some of the money to investors.

Pablo Legorreta, chief executive of Royalty Pharma the said the new bid was a "full and fair offer to Elan's shareholders".

"We remain hopeful that the board of Elan will consider our offer and recommend it to its shareholders. In order to obtain the full amount of our offer in cash in the shortest time frame, Elan's shareholders should encourage Elan's board to engage immediately with Royalty Pharma," he said.

The American company specliases in buying royalty cash streams from drug companys.

The increased offer from Royalty comes ahead of an Irish Takeover Panel imposed deadline to make a full takeover bid for Elan. Shares in Elan rose about 2% to €9.19 on the back of the higher bid.

Elan have not commented on the increased offer.