Elan has invested $20m (€14m) for a 24pc stake in a small Massachusetts drug development firm Proteostasis Therapeutics.
The companies will develop Proteostasis' platform of drugs and diagnostic tools for the treatment of neurodegenerative disorders such as Parkinson's, Huntington's and multiple sclerosis.
Elan, which holds its annual general meeting in Dublin this morning, might invest up to an additional $30m in the US firm over the next five years. The agreement can also be extended for a further five years.
Under the deal, Elan has gained the first right of negotiation to exclusively license compounds that emerge from the partnership and will also have a right to a seat on the Proteostasis main board of directors, as well as its scientific advisory board.
Elan chief executive Kelly Martin said the agreement reinforced the company's commitment and "strategic business objective" of being a high-calibre, science-driven company.
In 2008, Proteostasis, which is based in Cambridge near Boston, raised $45m in funding from investors, including Fidelity Biosciences, Novartis Option Fund and Genzyme Ventures. It has a number of licence agreements with Harvard University.
Earlier this month, Elan announced the sale of its Athlone-based drug technology unit (EDT) for $1bn to US-based Alkermes.
Elan retained a 25pc stake in a new company, Alkermes plc, which will represent the combined business of Alkermes and EDT. That divestment, said Mr Kelly, would enable Elan to focus on the science end of its business. About $500m of those proceeds are being used to reduce Elan's debt pile.
Davy Stockbrokers analyst Jack Gorman said yesterday that the move by Elan to acquire a stake in Proteostasis was instructive as to the Irish company's broader strategy to strengthen its own discovery platform and to increase the potential flow of new compounds into clinical development. He said he wouldn't be surprised to see additional activity like this by Elan.
The Irish firm has one major revenue stream -- multiple sclerosis treatment Tysabri, which it owns in conjunction with US-based Biogen-Idec.
Johnson & Johnson (J&J), meanwhile, owns 18pc of Elan. A J&J subsidiary Janssen AI in which Elan has nearly a 50pc stake, is progressing an Alzheimer's disease treatment development programme.
Proteostasis regulators, which Elan's new partner is focused on developing, can also be used to treat Alzheimer's.
Shares in Elan were trading up over 4pc at $8.78 by lunchtime in New York yesterday.