Elan has filed a lawsuit against King Pharmaceuticals in the New York Supreme Court to force the Tennessee-based group to complete the $850 million (€800 million) purchase of the rights to two of its drugs.

In a statement yesterday, Elan president and chief executive officer Mr Kelly Martin said he believed the company had met all of the conditions required under the purchase agreement.

The final requirement was for the deal to be approved by Elan shareholders at an extraordinary general meeting in Dublin today.

"King Pharmaceuticals has made a number of public statements that call into question its willingness to honour its obligation to complete the transaction in accordance with its agreement.

"Any refusal by King to close the transaction in accordance with its agreement has no basis and is unjustified," Mr Martin said.

The $850 million deal is a crucial component of Elan's recovery plan.

Mr Martin stressed yesterday that it was a necessary step for the protection of its shareholders and the company.

Speculation that King would not complete the deal at the end of this month triggered a 32 per cent drop in Elan's share price in New York on Friday last.

This followed news that the US Federal Trade Commission (FTC) would launch an inquiry into whether Elan had unfairly blocked generic competition regarding one of the drugs, Skelaxin. - (Reuters)