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DUBLIN (Reuters) - U.S. investment firm Royalty Pharma ROYPH.UL, which is considering a $6.6-billion bid for Irish drugmaker Elan ELN.I, must make a firm offer by May 10 or walk away, Ireland's Takeover Panel said on Wednesday.
Royalty made its indicative approach, worth $11 per Elan share, in February, hoping to add rights worth hundreds of millions of dollars for multiple sclerosis (MS) drug Tysabri to its royalty income.
Elan, which has rejected the proposal, welcomed the Takeover Panel's deadline, reiterating that the "highly conditional indication of interest" from Royalty was opportunistic in its timing.
The panel said it had set the deadline following representations made by Elan and correspondence with the advisers to both Royalty and Elan.
Royalty said it was disappointed that Elan's board continued to refuse to work with it to facilitate an offer being presented to shareholders and instead had sought to impose a deadline for an offer without the benefit of due diligence.
"The refusal of the board of Elan to engage with Royalty Pharma risks depriving Elan shareholders of the opportunity to decide on the merits of the possible offer," the New York-based company said in a statement.
The approach by Royalty Pharma put into question Elan's plans to return cash to investors and make acquisitions following the $3.25 billion sale of its 50 percent stake in Tysabri to partner Biogen Idec (BIIB.O).
Elan, left with only experimental drugs following the deal, will retain royalties of up to 25 percent on future sales of the MS treatment and announced last month it would give shareholders one fifth of that royalty share.
The Tysabri deal closed on Tuesday.
The Dublin-based company, in which U.S. group Johnson & Johnson (JNJ.N) is an 18 percent shareholder, will next seek approval from shareholders to start a share buy-back and hand back $1 billion to investors.
Royalty was due to meet with 10 to 15 of Elan's largest shareholders, including Johnson & Johnson, ahead of the April 12 shareholder meeting. Elan says most of its shareholders do not view Royalty's approach as worth consideration.
Reporting by Padraic Halpin; Editing by Louise Heavens and Mark Potter