ELAN Corporation and a newly formed pharmaceutical company, Axogen, have raised $83 million (£50 million) in a public offering of shares in New York, to develop Axogen's therapeutic products for neurological disorders.

This fund raising was first revealed three weeks ago and yesterday's announcement simply provides the financial details of the share issue, which - as with most of Elan's fundraisings - is a complex transaction.

The 4.6 million units being offered to investors at $18 each are made up of one Axogen ordinary share and one five year warrant to acquire one Elan share.

Underwriters Merrill Lynch have been given a 30 day over allotment option to buy an additional 650,000 units at a total cost of $11.7 million (£7 million).

Elan will have no shares in Axogen but will have the right to acquire the company in five years time at a fixed but undisclosed premium over the $18 per share offer price. The holders of the Elan warrants will be able to subscribe for Elan shares between January 1999 and December 2001 at a price of $37.54.

Elan shares are currently trading at around $29 and if all the warrant holders exercise their rights, they will end up with about five per cent of the enlarged share capital.

Axogen was formed three months ago.