Irish biotech company Elan (ELN) sweetened its dividend plan on Monday in an effort to entice shareholders to stand by its side amid a hostile takeover attempt Royalty Pharma.

Elan is now offering investors a semi-annual cash dividend linked directly to sales of Tysabri, which it says will give shareholders “unlimited participation in the upside” of those drug sales.

The first dividend, to be paid in the fourth quarter of this year, is expected to be 20% of the total royalty payment from Tysabri sales. There is no cap to the cash payments, which will be calculated as a percentage of the royalty paid to Elan from Biogen. 

“The restructuring of the Tysabri collaboration with Biogen Idec enables us, upon close, to unlock value to the direct benefit of our public shareholders,” said Elan CEO Kelly Martin.

The move comes a week after investment firm Royalty Pharma offered to buy Elan for $6.6 billion ahead of the closing of Elan’s planned sale of blockbuster drug Tysabri to U.S. partner Biogen Idec (BIIB) for $3.25 billion.

Criticism continues to mount over Elan’s decision to sell Tysabri, a multiple sclerosis drug and its primary source of revenue. Elan has said it plans to revitalize sales by using most of the proceeds to fund future acquisitions, however it has not given further details into those M&A plans outside of just saying that its board and executives have been working on a “number of strategic transactions.”

Elan will receive 12% royalties on in-market sales of the drug in the first year. That will bump up to 18% after close on sales up to $2.0 billion, and 25% on sales exceeding $2.0 billion. Last year, in-market sales of Tysabri reached $1.6 billion.  

The new dividend plan is subject to the closing of the Tysabri sale.

Follow Jennifer Booton on Twitter at @Jbooton