Elan Corp. agreed to pay $1 billion for a share of the royalties on new drugs from Theravance Inc. as the Irish drugmaker tries to persuade shareholders to spurn a takeover offer by Royalty Pharma.

Elan will receive 21 percent of the royalties earned by Theravance from GlaxoSmithKline Plc on the four respiratory medicines, and 20 percent of that income stream will be paid to Elan shareholders as a dividend, the Dublin-based company said in a statement today. The transaction is subject to shareholder approval, it said. Theravance shares rose the most in almost a month.

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