Will Elan and Lundbeck tie up?

Remember back in January, when Elan hired Citigroup to do a "strategic review" of its fund-raising options? Well, some rumors of a full-on buyout swirled around the company soon after, but quickly melted away as Big Pharma went Big Merger-happy.

They're back. Elan shares leapt yesterday on rumors that the Danish pharma Lundbeck was ready to bid about $10.65 per share for the company. The stock jumped 15 percent yesterday, bringing its increase since Tuesday of this week to 41 percent. Luncbeck shares also rose, but only by 1.5 percent.

Both companies declined comment on market speculation. But analysts and others close to Elan told the Financial Times that the Irish company would prefer to attract a strategic partner who'd sink some bucks into the company. Not to mention the fact that Lundbeck just bought Ovation Pharmaceuticals for $900 million last month.

Might Lundbeck be looking at acquiring a minority stake in Elan? Perhaps. Elan has claimed that it was close to a deal for 19.25 percent of the firm, but that deal never came to fruition. In any case, Citigroup's review is due to wrap up soon.

- see the Financial Times article