Elan will return $1 billion (€756 million) to shareholders through share buybacks following the closure of its Tysabri deal.

The Irish biotechnology group agreed to sell its interest in the multiple sclerosis drug to Biogen for an upfront payment of $3.25 billion, after co-marketing the drug for 12 years.

Money from the deal will also be reinvested into business and used to refinance its outstanding debt.

The group will continue to receive royalty payments of 12 per cent of global sales for the first year.

After that a tiered royalty system will come into effect and Elan will receive 18 per cent on the first $2 billion of global net sales and 25 per cent on any further sales.

Elan chief executive officer Kelly Martin said “By unlocking a portion of the Tysabri asset value while retaining a significant earnings upside, we have a unique opportunity to reward shareholders, diversify our business and create a highly distinctive business platform upon which to advance to the benefit of shareholders and patients around the world.”