Shares in Elan firmed yesterday as the market digested news of the firm's latest successful drug approval.

Elan said on Tuesday night that its severe pain treatment, Prialt, had been approved for use in the US by the Food and Drug Administration.

Prialt is designed for patients who need to have their pain medication delivered directly into the fluid surrounding their spinal cord and who do not gain relief from other treatments.

It is the first such medication to be approved in more than two decades. Conditions which may merit use of the drug include Cancer and AIDS.

Prialt is also expected to achieve approval from European regulatory authorities over the next few months. It received a positive recommendation from the European Committee for Medicinal Products for Human Use in November.

Elan has not released revenue projections for Prialt but it is expected to generate sales of at least $250 million (€184 million) at its peak.

Mr Jack Gorman, analyst with Elan's broker, Davy, is expecting revenues of $20 million from Prialt in its first year.

The drug is expected to come on the market in January. Mr Gorman notes however that Elan's valuation is based more on the outlook for Tysabri (formerly Antegren), Elan's multiple sclerosis drug.

Meanwhile, Elan said yesterday that one of its non-executive directors, Mr John Groom, had spent $3.8 million on the purchase of 266,720 Elan shares on December 22nd.

The deal follows a number of Elan director sales over the past month.

Shares in Elan closed 78 cents, or 4 per cent higher €19.78 in Dublin, having gained almost 5 per cent overnight on Tuesday in New York.