For many years, one of the companies that Elan Corporation has been compared against is the US pharmaceutical group Alza.

Alza had many similarities to Elan, with both companies starting out as specialist drug delivery companies before expanding into broad-based pharmaceutical companies.

Now US pharmaceutical giant Johnson & Johnson has made an agreed $12 billion (€13.5 billion) bid for Alza, a move that will inevitably focus attention on Elan and the possibility that it also will be wooed by one of the drug giants. If that does happen then Elan will undoubtedly be the winner, judging by the sort of multiples that Johnson & Johnson is apparently willing to pay.

Analysts have estimated that Johnson & Johnson all-share bid values Alza at around 43 times this year's earnings. Compare that with the 28 times earnings Elan is trading at based on Davy forecasts and one gets an idea of the upside that exists if Elan was to get an approach.

Elan has a steady flow of products, it has bundles of cash and a proven drug delivery technology that could be leveraged by one of the global giants. At its level of around $53, Elan may not be trading all that much off its near $60 high of last year. But an earnings multiple of under 30 must make the Irish group a tempting target.

Elan has made it clear that it plans to stay independent. Still, if a big cheque is waved, who knows what might happen.