Irish neuroscience-based biotechnology company, Elan Corporation, plc is in advanced talks to sell a minority stake to Bristol-Myers Squibb, which could lead to the US pharmaceutical major acquiring the Irish firm in a multi billion pound deal in the future.

New York City-based Bristol-Myers, with net sales of $20.6 billion in 2008, is one of two serious contenders for a minority stake in Athlone, Ireland-based Elan, which could see the drug giant also acquiring a seat on Elan's board, according to The Wall Street Journal, citing a source familiar with the talks.

Last year, Bristol-Myers Squibb had lost out to Eli Lilly in its bid to acquire US-based biotechnology company ImClone Systems, when Eli Lilly outbid Bristol-Myers Squibb revised sweetened offer of $62 a share or $4.7 billion to that of Eli Lily's $6.5 billion. (See: Eli Lilly to acquire ImClone for $6.5 billion)

The Journal said that the deal could be finalised early this week or the talks could also break down since there is another company willing to buy a stake in Elan with an eye to acquire the entire company in the future.

Elan, whose current market value is approximately $3.3 billion, had reported in its most recent quarterly earnings report that it had increased its revenue by 14 per cent to $245.1 million but incurred a net loss of $102.6 million.

In January, the company, which was founded by American entrepreneur Don Panoz in 1969, had hired Citigroup to conduct a strategic review since it had piled up debts of over £874 million, scheduled for refinancing by 2011.

With the company burning through cash and its shares plunging by 67 per cent in the past 12 months, chief executive Kelly Martin, who had been facing the wrath of his shareholders, had said in January that the company was looking to sell a minority stake to a large pharmaceutical company in order to develop and market its new drugs as well as give a thrust to its global sales of existing drugs.

Elan Corporation, plc is a neuroscience-based biotechnology company that focuses on discovering, developing, manufacturing and marketing advanced therapies multiple sclerosis, Alzheimer's disease and Parkinson's disease.

In 2006, Elan had teamed up with US-based Biogen Idec to market TYSABRI, a drug used in the treatment for relapsing forms of multiple sclerosis.

Elan, along with Wyeth is developing a drug in immunotherapy called bapineuzumab for Alzheimer's, which targets the clearance of beta-amyloid, the peptide responsible for the build-up of amyloid plaques in the brain.

Pfizer, the world's biggest drugs company after it acquired its rival Wyeth in January 2009 for $68 billion, (See: Pfizer-Wyeth create $68-billion blockbuster deal)  was also keen on acquiring a stake in Elan, but it was tied up in raising $13.5-billion to part finance Wyeth acquisition. (See: Pfizer raises $13.5-billion debt to part finance Wyeth acquisition)

With 2007 revenue of €1.47 billion, the Danish-based international pharmaceutical firm, H Lundbeck, was also keen on a deal with Elan, but had backed out since it felt that it would be difficult to raise funds for the deal in the current tight credit market.

Some of the shareholders of Elan are against any bargain since the company's value has eroded and it may not be able to secure a profitable deal in the current global economic meltdown.

But Bristol-Myers Squibb, whose market value is approximately $40 billion and is likely to ink the deal with Elan, is rumoured that it may merge with rival Paris-based French pharmaceutical giant Sanofi-Aventis.