Biogen Idec Inc. (NASDAQ:BIIB) has agreed to make an upfront payment of $3.2 billion and later pay royalties to acquire sole ownership of the multiple sclerosis drug Tysabri from its Irish partner Elan Corp. PLC (NYSE:ELN), which owns 50 percent of the world's second-biggest MS drug.

Tysabri, which many doctors and patients view as one of the most effective therapies now on the market in treating MS, brought in $1.1 billion in sales for Biogen last year. That’s second only to its lead MS drug Avonex, which generated revenue of $2.9 billion in 2012, according to company filings.

Biogen said it will use its existing cash reserves to make the $3.25 billion payment. Future contingent payments will equal 12 percent of global net sales of Tysabri for the first 12 months. After that, Biogen will continue to make contingent payments of 18 percent on annual global net sales of Tysabri up to $2 billion and 25 percent on annual global net sales that exceed $2 billion.

Biogen expects the deal to add between 20 cents to 30 cents to its per-share earnings for the year, and 50 cents to 60 cents to its adjusted per-share earnings.

American depositary receipts of Elan -- which trade on both the New York and Irish stock exchanges -- rose 1.82 percent to $10.65 in Wednesday’s premarket trading. Shares of Biogen rose 5.28 percent to $165.67.