Elan said yesterday it would spend $182.3 million (£140 million) to buy the remaining shares of Axogen Ltd, a company which develops therapeutic products to treat pain and neurological disorders.

Elan is paying $34.56 per share in cash and is exercising an option which was granted when Axogen was formed three years ago. The deal is expected to be completed by December 31st. Elan established Axogen in 1996 to undertake part of its research and development programme on a contract basis. The move was undertaken by the company to fast-track its research and development projects.

Axogen was initially funded through a public offering of units comprising one warrant to purchase two Elan American Depository shares and one Axogen common share. The warrants will continue to trade on the New York Stock Exchange until the end of 2001.