Elan shares rose in morning trading, fuelling speculation that a bid for the troubled group might be in the offing.
And market speculation pointed to back-in-favour Shire Pharmaceuticals PLC as a likely bidder.
At 10 a.m., Elan shares in Dublin were up €2 at 18, while in London, Shire was up 27 at 783, the highest gainer in the FTSE 100, after an upgrade and positive note from UBS Warburg earlier this morning.
A Shire spokeswoman declined to comment on what she described as "market speculation".
Analysts said that, while they were unconvinced about the fit of any merger between Shire and Elan, Shire chief executive Mr Rolf Stahel has a track record of unpredictability.
"I personally can't see the corporate benefits to Shire of a merger with Elan," said one analyst who asked not to be named. "But you can't deny that, after the events of this week, Elan is looking very cheap."
In the past week, Elan shares have lost more than half their value. Concerns about the way the company accounts for its in-licensing deals and development joint ventures were followed up on Monday by a profits warning. At current prices, Elan has a market value of about $4.3 billion, while Shire is worth about $5 billion.
AFP